It's no secret that open APIs are effecting the future for banks, payments, and other industries interested in innovative technologies that enable agility and scalability. One area that APIs are already having a substantial impact is in Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance. A legal necessity in many countries, AML/KYC requires banks and other FIs to ensure that they have properly verified their customers.
In general, APIs offer a quicker, easier and less costly path to deliver new services that meet consumer demands and expectations of today and tomorrow. Already, there are over 2,000 APIs in the financial category and many more to come as advancements in big data, AI, blockchain technology, machine-learning and other areas take off.
Improving regulatory compliance
While improving technologies are one reason for the growth of Open APIs, another key driver is the growth of regulatory compliance. Various new regulations around the world are coming into effect in the near future and financial institutions (FIs) require solutions to fulfill their legal obligations. In Europe, for example, the coming PSD2 changes will fundamentally alter aspects of payments that can best be accomplished by the use of APIs. Due to the speed and complexity of technical implementation, FIs that adopt a “wait and see” approach will find it increasingly difficult to keep pace and maintain market position, which is why APIs offer a viable option for FIs needing to satisfy compliance requirements while securing a competitive edge.
Traditionally, AML/KYC means that institutions physically check and record primary identification documents, such as drivers’ licenses and passports. For staff at FIs, manually verifying IDs is time-consuming, cumbersome and prone to human errors. It’s easy to see why — if staff is handling paperwork all day — errors work their way into the system. For the institutions, the cost of all those paper pushers is a burden on the bottom line; the average cost of meeting financial crime compliance requirements are over $11 million per FI and can range up to over $500 million per year.
Using APIs for AML/KYC compliance
There are numerous reasons to use APIs when considering your AML/KYC workflows:
- Provides a cost-effective solution
- Speeds implementation time as they can connect to existing infrastructure
- Integrates seamlessly with other applications
- Reduces the rate of clerical errors
- Improves staff efficiency by allowing them to focus on problem cases
- Improves staff morale by lessening the drudgery of manual paperwork
- Delivers better reporting and information flow
- Eases the burden of record-keeping, as the process is digitized from the beginning
- Systemizes procedures across units, divisions and operating companies
- Enables quicker entry into new markets
- Provides a smoother customer onboarding experience
- Speeds up customer onboarding, decreasing churn.
For all these reasons, Trulioo offers its Normalized API for GlobalGateway, the leading identity verification platform for KYC/AML compliance. Ranking first in the ID Verification Tool/Identity Checks category in the 2019 RegTech Performance Report (for the 4th year in a row), the API enables clients to scale their business faster, smoother, and more efficiently.
One API integration connects your system to all the identity data and services you need including electronic identity verification, ID document verification and business verification. The GlobalGateway API is country-agnostic, provides access to 400+ vetted data sources and enables the ability to verify over 5 billion people and 330 million businesses worldwide.
Built for scalability and flexibility, the Normalized API is a RESTful (Representational State Transfer) API, ensuring that it is ready to meet future needs as Trulioo continues to enhance GlobalGateway with dynamic new functionality, as well as additional countries and data sources. Another key feature of the API is that it reduces the number of field types to approximately 30 fields by using built-in intelligence and mapping of common fields.
Onboard customers faster and easier with robust API documentation, trusted and vetted data sources, normalized data fields, and an easy RESTful API integration. Find out why the GlobalGateway API is the leader in global online identity verification and AML/KYC compliance. Learn more about how easy it is to integrate Trulioo’s Normalized API for GlobalGateway.
This post was originally published on February 1, 2017 and updated to reflect the latest industry news, trends and insights.