KYC verification and secure electronic signature: indispensable for compliance in the financial sector

A good KYC verification system for a proper digital onboarding together with an electronic signature platform with all the legal guarantees, are key for compliance in the financial sector. Regulatory compliance is essential in the financial sector to ensure the transparency and integrity of financial operations. And on the road to digitalization, this is one of the biggest challenges for banking institutions. One of the key aspects of this regulatory compliance is KYC identification and verification. That is, the process corresponding to the validation of the identity of customers known as "Know Your Customer". Here we explain the importance of a good KYC verification system and a secure electronic signature platform for financial institutions:

What is KYC verification and why is it important?

KYC (Know Your Customer) is the process of identifying and verifying identity when a new customer joins online, i.e., during what is known today as digital onboarding. This process is done through the collection of personal information such as full name, address, date of birth and ID number. And it asks questions about the user's background and current financial situation. Implementing an effective KYC verification system is important to prevent financial fraud, money laundering and other illegal activities. It also assures customers their financial transactions are safe and secure.  

Consequences of a vulnerable KYC system

Financial companies that do not implement adequate KYC processes can face severe penalties and fines. Let´s look at some cases: In 2022, banks and other financial institutions were fined about $5 billion for money laundering-related and sanctions violations and failures in their KYC systems. The United States was the most aggressive imposing fines. It racked up $37 billion in fines alone. Sanctioned companies must proceed with costly and exhausting remediation plans for management teams.

 

Why is it important to have a secure electronic signature platform?

The electronic signature is the mechanism that allows online operations with full legal validity. Financial institutions use it as a secure and efficient way to sign contracts and other documents. A secure electronic signature platform allows customers to sign documents electronically, ending the need to print, sign and scan physical documents. This translates into time and cost savings and a better customer experience. Electronic signature platforms use advanced encryption technologies to ensure documents are safe and secure. Additionally, they can be integrated with other business systems, helping document management and collaboration between teams.  

Technological tools for KYC verification and Compliance

At SigneBlock we are confident in the trust of the new world. As a technology company we develop solutions based on Blockchain for the digitalization on processes for banking and fintech entities providing access to all the advantages offered by this technology: a maximum level of security, traceability, and immutability. We do this through these solutions:

URUK: Electronic signature platform backed by a Trusted Service Provider

URUK is an electronic signature platform with Blockchain traceability. It helps to manage and streamline the processes of signing documents and contracts for financial products, with the possibility of accessing several types of signature and security mechanisms:

• Advanced Electronic Signature
• Handwritten signature
• Biometric signature
• Signature with digital certificate in the cloud
• Time stamp
• SMS and e-mail notifications

 Higher level of security with Blockchain

 Our electronic signature platform incorporates Blockchain to add a longer layer of security. Blockchain technology allows us to confirm records at once, increase the security of digital signatures and ensure data security due to the distributed nature of the blockchain. Each record is traceable and gives a greater amount of evidence about the act of signing.

QiD: Qualified Identity Digital

Additionally, financial agents can access the QiD, a Qualified Identity Digital, which consists of the fusion of the Digital Identity in Blockchain and the electronic signature, that enables the use of the advantages of the Blockchain with legal recognition.

Onboarding Digital

With URUK's electronic and biometric signature it is possible to perform the KYC verification process with full legal backing. Through facial biometric authentication the regulations are met offering a great user experience allowing to verify the identity of customers in seconds. You may also be interested in: the latest trends in identity verification in the financial sector.

 In a nutshell:

URUK and access to various signature types, security levels and identity verification allow financial institutions to conduct any type of electronic transaction between parties with absolute legal support. This not only  prevents fraud but also increases confidence in business processes. All this is possible because SigneBlock is backed by Grupo Signe as a Qualified Trust Service Provider, of which we are a part. This means that we are authorized to issue digital certificates and all our signatures are subject to the eIDAS regulation.  Signe is a leader with more than 40 years of experience in the design and printing of checks and banking security documents. Both with SigneBlock, we evolve to give confidence to the financial sector in the online world. We have been a great ally of the industry for all these years. Tell us now how we can help you.