Five Things to Check for During the Customer Onboarding Process For KYC and AML Compliance

The customer onboarding process involves greeting your customer, ensuring your customer knows how to use your product, platform, or service then continuing to support them while they use the product/service and ensuring they are satisfied and will continue to support your business. Usually, the term is prevalent in Software as a Service (SaaS) businesses like Financial Technology (Fintech) companies.

Customer onboarding is important for both your business and your customer. It must not be confused with user onboarding which is done mainly for employees and whose focus is solely on getting the user to know how to use your product or service.  Customer onboarding’s focus is on getting your customer to buy and ensure repeat business.

Benefits of Customer Onboarding

Increased Customer Loyalty

In an effective onboarding process, the customer’s problem is solved quickly and efficiently. Leading to a better understanding of your product or service which according to Harvard Business Review leads to increased customer loyalty. Apparently, customers just need to know how your product works and that it works well.

Better Feedback and Data Insights

Once you are KYC compliant, Know Your Customer compliance (KYC) provides a great opportunity to gain consumer data and have better insights into how your customer behaves. You can also use the onboarding process as an opportunity for feedback on your product/service.

Operational Efficiency

Automating your onboarding process can save your company time, overhead costs and service loads. Having automated KYC checks, email verification software and automated AML solutions with basic customer due to diligence can speed up the process and customers who understand your product/service will have fewer issues with adaptation and have fewer service issues.

Increased Revenue

Of course, once you increase loyalty and have better operational efficiency you are going to increase revenue.

Customer Onboarding Process For KYC and AML Compliance

KYC/KYB Compliance

Customer onboarding makes Know Your Customer and Know Your Business (KYB) compliance easier. During the onboarding process, you learn all about your prospect and their businesses especially, if they are a Business to Business (B2B) client.

The customer onboarding process is similar to that of the customer or hero’s journey. During the onboarding process, your potential customer passes through something akin to a sales funnel. They go from the awareness stage where they become aware of your product/service then you get the prospect to the discovery stage where they may test the product. From there, it evaluation when the potential customers can decide to become paying customers. Now, once they purchase your product/service, your goal is to build customer loyalty and encourage repeat business.

During this customer onboarding process, there are a few things that banks, corporations and small businesses should be aware of to have KYC and AML compliance while obeying Anti-Money Laundering (AML) Laws.

1. Customer Identity Verification

Knowing your customer is the foundation to proper customer onboarding. There must be a way to electronically verify your customer’s id and email thereby, validating the information they have provided.

Customer identity verification and validation is the first and most necessary step in the onboarding process. Age verification and Know Your Customer (KYC) can be done with global id verification using a global identity verification service with anti-money laundering technology or with an id verification partner to screen for basic customer due diligence.

Verification, which is done using IDMkyc, is needed to first identify the source of the documentation and check data records to verify that they were in fact issued by the governmental body the potential customer says they are from. Validation, which is done using IDMscan, is done using biometric facial recognition to confirm that this is indeed the owner of said documents. Validation is crucial to KYC compliance and can work seamlessly with IDMaml as your automated AML solution to reduce the risk of fraud.

During verification and validation, companies with anti-money laundering technology, global id verification and email verification software can identify Politically Exposed Persons (PEP) and Specially Designated Nationals (SDN) that can put your Fintech company, bank, corporation or small business at risk of being non-compliant with the Office of Foreign Assets Control (OFAC). PEPs need special consideration and risk management by banks and businesses while SDNs can put you at risk for hefty fines.

To protect your business or non-profit, you should use IDMkyc and IDMscan as your global identity verification service and id validation service and IDMkyb when onboarding business to business (B2B) clients.

2. Incomplete Basic Customer Due Diligence

If you can’t confirm the customer’s identity and you can’t verify their email using email verification software then they’re probably not who they say they are. Other signs of fraud include refusal to provide supporting documentation or documents from unreliable sources, source of funds inconclusive and credentials fake.

To combat the activities of your would-be fraudster, global id verification using a global identity verification service that has automated AML solutions with AML fraud detection and automated KYC checks. This ensures your fraudster is identified and kept out of your system.

Behavior monitoring should be done during and after the onboarding process to both customers and users to identify suspicious activity and the possibility of an imposter scam i.e. identity theft. In 2020, the Federal Trade Commission (FTC) reported consumers losing $3.3 billion dollars to fraud and almost 1.4 million reported cases of identity theft. These fraudsters used the stolen identities to get passports, government benefits and other government-issued documents.

For B2B companies, the best practice is to ensure that the company you are doing business with performs basic customer due diligence with global id verification and provides anti-money laundering solutions and services for their customers. They should also have full KYC and AML compliance and be compliant with the Corporate Transparency Act (CTA). Or you can use IDMkyb to get all the relevant data on your corporate client, that way, you are fully aware of company ownership and to whom your company’s money goes.

3. Non-Compliance with AML Policies

Yes, you are in the business to make money, but you don’t want money earned from fraudulent means. And if you don’t pay attention to who you are onboarding, you could be receiving money from drugs, human trafficking or stolen goods.

Under the Anti-Money Laundering Act of 2020, your company could be facing hefty fines if the Financial Action Task Force (FATF) or the Financial Intelligence Unit in your country discovers you are receiving money from suspicious sources.

To prevent being on the receiving end of those hefty fines or facing a shutdown, besides basic customer due diligence like address and global id verification, you’ll have to get an AML monitoring solution with anti-money laundering technology like AML fraud detection, AML monitoring screen software and use identity checks for money laundering. Working together with an experienced global identity verification service like IDMaml, to create an automated AML solution for faster AML fraud detection, verification and monitoring, you can be sure of your company’s KYC and AML compliance.

Since banks and Financial Technology companies are at a higher risk for money laundering activities, they usually face higher fines. So, there are usually more comprehensive AML solutions for banks and financial services. Banks and Fintech companies need to have their own additional in-house guidelines for KYC/KYB and money laundering.

4. Issues with Customer Onboarding Software

Even with strenuous testing and previous user onboarding, sometimes, problems show up mid-use that wasn’t planned for or even foreseen. This can affect your customer experience, onboarding process and even revenue.

Attempting to validate customer information without the proper id verification software, email verification software, AML screen monitoring software or using a trusted global identity verification service, AML monitoring solution or id validation service can cause problems when onboarding customers. Improper onboarding can lead to incorrect data, increases the risk of fraud and loss of revenue if your potential customer chooses to abandon the process.

No one wants to wait while you identify the problem and neither will they trust you with their data if your systems seem unstable. It also puts your product/service in a bad light as your potential customer can assume that it is faulty as well.

Opting to leave the onboarding process to the pros, is a better way of reducing the risk of your prospect abandoning the onboarding process and missing out on potential revenue. At IDMERIT, our cost-effective, GDPR compliant, global identity verification service has been tried and tested on Fortune 500 companies in over 100 countries for many years and we are committed to data protection and fighting fraud. Let us prove how we can give you the best and safest customer onboarding experience.

5. Opportunities to Make the Onboarding Process Easier

Besides having KYC and AML compliance and protecting your business and customers, other goals of customer onboarding are building trust and loyalty. At every stage of the onboarding process from sign-up to follow-up, you should be looking for opportunities to make the onboarding experience better.

Look out for ways to make it faster, safer and more user-friendly. You can ensure your onboarding process is mobile-friendly and can be done just as effectively on a smartphone as it is done on a computer. You can also have the onboarding process fully automated with automated KYC checks and automated AML solutions.

Constructive feedback and questions should be welcome at every stage of the onboarding process not just during walkthroughs, product setup or check-ins. Your potential customer should be able to interact with you from sign-up, during a data download and after purchase.

Seek ways to wow your potential sign-up by offering complementaries, freebies or swag packs as they go through the onboarding process to ensure they complete the process and encourage others to try your product/service. The incentive of early reward can result in free word-of-mouth advertising and a potential increase in revenue.

In your own company, we’re sure that there are many more opportunities you can find to reach out to your potential buyer and help them along the customer onboarding process. We at IDMERIT can be your automated AML solution assisting you with your customer onboarding process by providing AML fraud detection, anti-money laundering solution and service and id validation service to ensure you have to Know Your Customer compliance.


Paying attention to these five things during the customer onboarding process can make customer onboarding a seamless process for both the company and its clients.  Neither of you should have to worry about data protection, identity theft or fraud, having KYC and AML compliance or how long it takes. With IDMERIT’s skill in global identity verification services, they can verify, validate, reduce risk during the process and ensure B2B customers are also KYB compliant.

In the end, no matter how flawless your customer onboarding process is, you must provide value to your customers,  deliver on your customer service and continue to serve your customers long after they purchase. You can have a seamless onboarding process, but if you disappear when they have questions, you can end up with negative feedback and lose all the ground gained during the onboarding process.

However, IDMERIT can help you automate your entire customer onboarding process and monitor for any issues, protect your customer’s data and even make it mobile-friendly with automated KYC checks and automated AML solutions. IDMERIT’s trusted, cost-effective and comprehensive global identity verification service makes customer onboarding easier, faster and helps with KYC and AML compliance with global financial and security institutions. Let us prove we can do your customer onboarding process better. Talk to us today!

Tony Raval
Tony Raval

Tony Raval brings more than 15 years of leadership in data technology as the Founder and CEO of IDMERIT, headquartered in Carlsbad, California. He leads an executive team including top data tech veterans to execute on his passion of creating a global data universe generating true and trusted intelligence. IDMERIT’s competitive success has come from the company’s ability to perform cross-border transactions, for which Tony and his team have developed a meticulous process and progressive technology. The company was launched as the result of a highly effective engagement with a leading global financial institution, whereby the company was uniquely able to triangulate multiple elements to create a comprehensive, and yet, frictionless experience. Tony has provided data intelligence to companies such as Google, SalesForce, and HP as well as clients across financial, government and other sectors seeking a superior partner in compliance and mitigating risk. He holds a Master’s Degree in computer engineering and data sciences, is an active member of the Entrepreneurs Organization San Diego and dedicated mentor to new entrepreneurs in EO’s Accelerator Program, enjoys meditation and running, and he and his wife Sonal recently celebrated their three-year-old son's birthday.

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