Florin Awards 2019: interview with Know Your Customer

Could you introduce your company to our readers? What types of services do you provide, what markets do you address and how did your company start in the industry?

At Know Your Customer we aim to bring client onboarding into the digital realm once and for all. We provide an end-to-end solution that helps organisations centralise and automate their know your customer (KYC) and anti-money laundering (AML) checks.

Our digital-first approach aims to make the whole experience more streamlined for the end customer – whether they are an individual or a corporate - and a lot more efficient for the organisation. By connecting to company registries from around the world and extracting the necessary compliance information through Artificial Intelligence, our solution helps reduce the time needed to onboard a new corporate client from an industry average of 26 days to just one day.

Due to the growing impact of AML & KYC regulations around the world, we now provide our solutions to organisations across 11 countries and 9 sectors, including payments, banking, FinTech, real estate, insurance, accountancy, just to name a few.

The idea for Know Your Customer came about when my two co-founders and I– who had all worked and lived in different parts of the world and always struggled with the manual and time-consuming nature of the KYC process – decided to build an innovative solution to address the existing gap in the market and make life easier for customers and compliance teams all over the world.

Congratulations on your recent Florin Award win. What, would you say, are the main elements that make your company stand out from other services?

Generally speaking, there are four pillars of client lifecycle management (document collection, data extraction, ongoing monitoring, and reporting & analysis). While the majority of solutions currently available only focus on one of these pillars and solve a subset of the challenges faced by financial institutions, we take a horizontal approach providing a truly end-to-end KYC solution that covers the whole process.

More specifically, some vendors will provide a workflow solution that guides compliance officers through the KYC process but does not automate it. Others only focus on the one – very important - step of ID verification. At Know Your Customer, we believe that the real efficiency gains lie in a more holistic approach, and we have built a solution that centralises all key KYC/AML compliance functions for both individual and corporate clients.

Additionally, we rely exclusively on official documentations retrieved directly from government sources in real time. Thanks to our global presence and experienced team, we have mapped the specific documents that are required by regulators in each jurisdiction, helping organisations of all sizes expand into new markets without compromising on compliance.

What are the key takeaways from attending 2019’s European Payments Summit?

The topics at the centre of this year’s European Payment Summit were without a doubt Open Banking, PSD2 and its Strong Customer Authentication (SCA) requirements.

More specifically, to comply with the new SCA requirement that are coming into force on 14 September 2019, payment transactions processed within the EU will need for the customer’s identity to be verified using a combination of at least two of the following factors: something the user KNOWS (e.g. password, pin), something the user HAS (e.g. ID card, mobile phone), and something the user IS (e.g. biometrics).

Because of their implications for the online payment experience, the SCA rules have rightly been described as the “last and most controversial piece of the PSD2 puzzle”. For instance, as many as 40% of transactions are expected to experience drop-outs in the immediate aftermath of two-factor authentication kicking in. By seamlessly integrating the set-up of SCA with standard KYC checks, organisations can better ensure that the impact of the new requirements is rectified after the initial transition period.

Secondly, the role of digital identity programmes and their impact on KYC compliance was another fascinating topic discussed at length during the event. Some European countries – eg Sweden and the Netherlands - have started experimenting with national digital identity schemes similar to what Singapore has done with MyInfo. Speakers agreed that the most effective way to drive adoption of such schemes is to integrate their onboarding with other online services essential to consumers (such as online banking). While such implementations become more popular on a national level, the question remains of how they could be scaled up and applied internationally.

What are the main trends that we should be on the lookout for 2020?

From a regulatory point of view, I think 2020 will be a key year to harmonise the sometimes seemingly contradictory regulations that had flooded Europe after the Financial Crisis. As the tide finally begins to settle, financial institutions will focus on reviewing their internal processes to find more efficient ways to remain compliant with different regulations.

In this process, the role of compliance will become even more strategic, as their knowledge of regulatory requirements will be sought after to ensure business processes and IT implementations are compliant and cost-effective.

Finally, increased user expectations and awareness from the general public will lead more and more payment providers to turn to automation for certain elements of the customer onboarding process. Automation’s strength is its ability to quickly and consistently scale the efforts needed to enforce compliance procedures across different organisations and geographies in a way that limits frictions in the user journey. This is a fundamental ingredient for commercial and operational success in the era of growing financial regulations and more demanding customer expectations.

About Claus Christensen

An experienced entrepreneur and executive, Claus Christensen has been active in the software industry for more than thirty years. Prior to co-founding and becoming CEO of Know Your Customer, Claus founded Servolutions GmbH, a company developing email server infrastructure products for more than 60,000 global customers, and served as Vice President of Electronics at Thielert Aircraft Engines.

About Know Your Customer

Know Your Customer provides end-to-end digital solutions that quickly and accurately identify companies and individuals during client on-boarding. Its platform offers ultimate Beneficial Owner identification, ID verification and automated anti-money laundering checks in multiple languages and across jurisdictions, automating 90% of compliance routine tasks.