Most firms that offer digital asset services have know-your-customer (KYC) measures in place to verify a user’s identity. But solutions are needed to ensure that the process complies with local regulations while also making it as easy as possible for the user.
While innovative products have cropped up across crypto sectors, onboarding and retaining new users continues to be a struggle for companies eager to balance safety and security with decentralization and privacy.
Most firms that offer digital asset services adopt know-your-customer (KYC) measures to comply with Anti-Money Laundering (AML) regulations put in place to curb illegal activity. These standards, carried over from the traditional finance space, are used by crypto companies to verify a user’s identity before they can use a service. KYC can include things like verifying email, addresses, phone numbers, bank accounts, IDs and more.
However, KYC is often a challenge, both for the firms implementing it and for users who are interested in signing up for a service as easily as possible.
As regulators crack down and push for enhanced KYC disclosures, companies need to stay up-to-date on specific market requirements, which can be time-consuming and expensive. For users, KYC processes can be boring and invasive, creating a clunky signup flow that repels customers.
But KYC doesn’t have to be a pain. New services are coming out that offer complete KYC onboarding solutions that are easier, faster, and safer for users.
Speed bumps to crypto adoption
There are several reasons why the signup process can be slow and clumsy for both companies and customers:
- Lack of data and insights: Many organizations do not have enough behavioral data and don’t fully understand their target audience to create a custom onboarding experience.
- Too many fragmented solutions: Piecing together many fragmented KYC solutions can be time-consuming to set up and expensive to maintain for an organization.
- Outdated tech: By relying on old technologies, the signup process becomes slower, less secure, and harder to complete compared to using newer technologies like AI-driven personalization, biometrics, and ID document scanning.
- Global considerations: Regulation can vary according to geography, making expansion into new locations an added challenge.
These roadblocks can have a negative impact on both an organization and its potential users. From losing customers due to poor user experience to potential compliance breaches, there is a real need for better KYC solutions that take these issues into account. The race is on within the fintech, crypto and Web3 ecosystem to find a scalable solution to address these problems.
A number of solutions are devoted to solving KYC problems in the crypto space. Many offer specific tools that solve part of the onboarding process – like ID scanning software or face matching, though holistic solutions that treat different pain points in the signup process hold the key to long-term success.
When considering holistic KYC tools, the most important things to consider are:
- Personalized branding and UX: Each organization should have a signup flow that is customizable and tailored to its specific branding and interface.
- Compliance across locations: Tools should understand local regulations and allow organizations to be 100% compliant when they expand into new markets.
- Proven methods for higher conversions: The customer onboarding tech stack should have a proven track record of improving conversions and user experience at scale.
- Full integration support: Tools should do most of the heavy lifting, solving the entire KYC management from data collection to validation to the final verification, allowing for better launches in less time.
In an industry that demands both rigorous compliance and exceptional user experience, the need for advanced technology solutions is non-negotiable. Companies must prioritize security and privacy, features that crypto users particularly value. In addition, achieving high conversion across diverse markets is essential, demanding an optimized user experience that simplifies complex workflows. To meet these critical needs at scale, it’s imperative for crypto companies to partner with providers who bring both technological prowess and industry know-how to the table. Companies like Checkin.com serve as a case in point, offering the most comprehensive solution for easy KYC flows that are helping to set a new industry standard.
As the DeFi, crypto, and Web3 ecosystems continue to evolve, it’s important to consider safety, efficiency, and compliance every step of the way. Integrating holistic, easy-to-use KYC measures can help companies onboard new users and keep them engaged long-term. In the race to mass adoption, the winning formula is simple: create a signup process that is smart, fast, and safe while still remaining compliant.
If you would like to try the optimal KYC flow with your own branding adapted for any market you currently target – submit your website for an interactive demo of Checkin.com.