How to optimize KYC conversion

In the digital age, customer expectations are soaring, particularly concerning the speed and efficiency of service delivery. For fintech and financial institutions, the Know Your Customer (KYC) process is a pivotal aspect of customer experience during onboarding. This article explores how optimizing KYC procedures can enhance customer conversion rates while balancing the essential requirements of compliance and customer satisfaction.

Optimizing your KYC journey to increase conversions

Customer expectations are higher than ever due to the decisive shift toward digital offerings. The accepted standard is now that businesses should move fast and deliver services almost instantaneously. And according to a PWC study, 73% of consumers say the customer experience is an important factor in their purchasing decision. In other words, businesses that nail the customer experience – by meeting or exceeding expectations – make sales.

For modern fintech businesses and financial institutions, Know Your Customer (KYC) procedures are central to the customer experience during the onboarding process. KYC consists of online verification of user identities, critical for granting access to digital financial services. 

KYC comes into play at a meeting point of two goals, which are sometimes difficult to reconcile: conversion and compliance. While the onboarding quality is essential to convert visitors to customers, identity security is also mission-critical. Effectively, KYC and sales conversions are inseparable because they’re both tied to the customer experience. 

Optimizing your KYC process is essential for creating an excellent customer experience and ensuring you don’t lose sales during onboarding.

Measuring conversion during onboarding 

Conversion rates are a critical KPI but one of the hardest to get right. KYC conversions vary based on the use case and the associated service, and the user’s commitment to a KYC process differs depending on if the identity verification process is mandatory. However, the end goal remains the same: keep as many users as possible engaged until the end of the process.

Despite the various challenges, establishing a benchmark for KYC conversion is essential for growth. Here are a few methods to remember when determining what works best for your unique use case.

• Product monitoring identifies improvements based on each step of the process. By understanding the time spent on steps and the level of failures and abandons on the journey, product monitoring assists in creating KPIs for each stage of the KYC process.
• User tests consist of carrying out user evaluations to gain qualitative feedback. With that information, you can build A/B tests.
• A/B tests make it possible to test several versions of the KYC journey to learn which yield higher conversion rates.

‍Maximizing compliance and conversions during KYC journeys

KYC procedures are a critical step in onboarding fintech customers. Secure KYC procedures are also mandatory due to current regulations. For example, LCB-FT requires fintech and financial services organizations to comply with identity verification regulations to prevent money laundering and financing terrorism.

Yes, identity verification is required, however, users should not perceive KYC as a barrier to entry. Secure KYC procedures must be balanced with thoughtful user experience design. Remember, compliance is not an excuse for an unpleasant customer journey.

As you think through the design, experience, and, ultimately, conversion of your KYC process, keep these considerations in mind. 

• Video-based KYC ensures a simple and fluid user experience. In fact, our video-streaming Identity Verification solution increases conversion by 25 - 30% compared to photo-based technologies. 
• Guiding the user in real-time is preferred by users over receiving asynchronous instructions. For example, artificial intelligence can send your user simple, colorful, and non-intrusive messages to guide them through the onboarding journey. 
• Whether or not your technology works with a user’s personal equipment significantly impacts the user experience. Build a universal onboarding journey that works with all types of hardware. Our 100% web-based technology makes it possible to accommodate all devices – avoiding unnecessary churn in the conversion funnel.

Don’t choose between compliance and high conversion rates. Our Identity Verification solution leverages a user-friendly video-based streaming technology while meeting the highest security standards. And we’re one of the  ID-proofing technology to be PVID certified by the ANSSI.

Start building your optimized KYC user experience. Learn more about our Identity Verification solution today. 

*Checkout.com’s Identity Verification solution was originally developed by ubble. 

To read more about Checkout.com’s acquisition of ubble, read here.