How To Choose A KYC Provider In 2024 [+Comparison Table]

Recently, I was approached by one of our clients, who posed this query: “We would like to integrate a KYC solution provider. Which one would you recommend?”  I certainly knew the difference between authentication and verification. But I couldn’t have predicted how answering such a simple-sounding question would turn out to be more of a task than I imagined.

So, now let me walk you through my journey of discovery!

Know your customer software market

The global Know Your Customer Software market size is expected to reach $9.5 billion by 2028, rising at a market growth of 19.7% CAGR during the forecast period.

Image source: Grand View Research

The market’s growth is driven by the increasing significance of compliance management and the rising incidence of identity-related fraud in financial institutions. Additionally, stringent government regulations aimed at preventing financial fraud and anti money laundering (AML), particularly through the use of Know Your Customer (KYC) applications, are fueling this expansion. The adoption of advanced technologies such as machine learning, artificial intelligence (AI), and biometric face recognition further bolsters the KYC software market. Financial institutions globally are increasingly implementing KYC solutions to enhance customer verification processes.

Steps to take before choosing a KYC vendor

Answer Essential Questions

Once you’ve done your due diligence on Google and gained a general understanding of the KYC concept, procedures, and landscape plus compiled a list of KYC providers that look trustworthy, ask yourself a few simple questions before reaching out to their sales.

• What is the expected volume of onboardings per day?
• How big is the compliance department?
• What is the current automation-to-manual review ratio?

When you feel you’ve gained enough information here, embark on the second stage.

Prepare your requirements for KYC processes

Prior to your first call with KYC vendors, make sure you have the following list prepared:

• Requirements!
• Requirements!
• Requirements!

Do not talk to a prospective supplier without understanding your requirements. This is wasting time, for both sides.

Ultimately, I shortlisted the following names:

• Mitek
• Comply Advantage
• Trulioo
• Fenergo
• Ondato

Define key issues to handle via the KYC provider

Determine the particular criteria to help make your choice. How would you measure up and compare different solutions?

A potential KYC vendor should help resolve the following issues:

• Improve the customer onboarding experience
• Reduce onboarding and transactional fraud
• Ongoing monitoring
• Diminish manual applications review time 
• Decrease KYC costs
• Handle regulatory compliance

So, finding a KYC provider that strikes a perfect balance between customer satisfaction, risk management, and regulatory requirements isn’t the easiest task ever, right? 

Luckily, we can help.

Key features to look for in a KYC software for banks

The KYC landscape is fairly competitive. Now, as fraudsters become more and more sophisticated, KYC vendors are rushing to respond accordingly with safeguard solutions.

So, how to find out that a particular KYC provider among existing systems would be a perfect shield from fraudsters and bring you more customers — ultimately increasing the bottom line?

All KYC vendors are not made equal. Some have better coverage, for example, while others may have a better manual/automated review ratio.

But, bear in mind, if a vendor commits to coverage for a certain number of countries, it doesn’t automatically mean that they can process all types of available documents therein. So yes, the devil is again in the details.

Here are the key aspects to consider prior to making a decision:

• Security

It goes without saying that you must be certain security is provided in a proper and appropriate fashion.

• Perfect fit

Depending upon your verification process requirements, you may want to choose separate, individual components like ID verification process, document and biometric verifications, or, you may want a more comprehensive end-to-end solution covering KYC, AML, and fraud prevention. The key point is to choose the solution that has the features and functionality which would best fit the needs of your compliance processes.

• Easy integration

APIs are the veins of the FinTech (not solely, of course). Make sure your KYC technology vendor can offer hassle-free back-end and front-end integration which will reduce cost and time significantly, and ensure efficient verification process.

• Reference data connectivity

Check whether the vendor has their own database. Normally, big-market players offer both their own database as well as the option to integrate other resources (e.g., governmental databases, integrated premium data sources, customer-specific data lists).

• Technology used

ML, AI, and biometric  verification.

• Verification ability

A simple way to evaluate a vendor’s ability is by testing customers’ data. Test the legitimate IDs as well as fake ones, expired, older, or different versions of an ID.  Do not forget to test the speed of manual reviews and audit the results.

• Risk/conversion dilemma

Obviously, the key question all financial institutions face is how to make the onboarding easier, and for the institution itself to meet compliance requirements. Try to investigate whether your solution can optimally balance between those two. 

Ask your potential vendor how they would actually improve account and customer onboarding processes, and how it would reduce fraud and false positives.

Top KYC providers comparison table

The KYC vendors included in our sampling are chosen from the key parameters which represent the typical KYC process: onboarding, surveillance, and reporting.

In addition to these, leading AML and KYC solution providers, such as ComplyCube, can significantly improve business processes, making these services a 2-in-1 solution for compliance and growth. Utilizing cutting-edge artificial technology, client acquisition can be fully automated without compromising the reliability of the data extracted.

• Cost of user acquisition reduced by up to 73%
• Up to 98% of customers onboarded in seconds
• Enabling global expansion in 220+ countries and territories
• Maximized revenue with compliant user-centric KYC onboarding

These advanced capabilities demonstrate how modern KYC providers are not just about compliance but also act as strategic enablers for business growth.

*but no biometrics capabilities in-house
**available through the partners

Source: the data obtained directly from the sales representatives or taken from the corresponding websites. The frame is taken from the Quinlan & Associates Report

KYC tools for banking pricing

One of the critical aspects of benchmarking — and probably one carrying a large degree of weight in regard to your decision-making — is pricing, of course.

As you might guess, the price correlates with the volume and number of transactions/operations capability on offer. Prices can also, in some cases, be negotiable. You can compare pricing rates by contacting the above-mentioned “know your customer” service providers directly. 

API-first approach

Being a fintech vendor, we constantly emphasize the importance of an API-first approach — and metaphorically call it the new ‘electricity’. It is the only means by which to make a fast and cost-efficient integration, managing the solution from one instance.

APIs add flexibility to your product development, save tons of time and budget, and enable the creation of the most convenient applications for the end-users.

Every vendor displayed in the benchmarking sample can integrate front & back end as well as partners from adjoining fields like biometrics, online authentication, etc.

If you’re building a banking or payment product, SDK.finance offers a powerful transaction engine to cut down your development time and act as a foundation for further developments. Contact us to learn more about our fintech solutions.

Watch SDK.finance Platform’s demo video to explore how to manage your users, ensure KYC compliance, and prevent fraud with the robust system back office.

This video showcases real-life scenarios demonstrating the power of the Clients section: