If you’re doing research on open banking and KYC, you may be facing the following challenges:
You’re looking for an alternative, cheaper way to run KYC checks. Your current KYC checks take days, even weeks to complete, and you’re looking for a less time-consuming solution. You’re interested in using open banking as an alternative but want to make sure it’s a viable and secure approach.
KYC checks can cost around 3% of a UK bank’s total operating expenses (according to PWC). With open banking, companies and financial institutions can have a KYC process that is cheaper, faster and more secure than traditional methods.
Read on to learn how open banking can simplify your KYC checks, saving your team time and money.
In this article:
- What you need to know about KYC check
- How open banking can help with Anti-Money Laundering (AML) checks
- Why use Yapily for your open banking KYC checks?
Prefer to speak directly to an open banking expert? Book a call
How does open banking simplify KYC checks?
To understand how open banking supports KYC checks, you first have to know how open banking works.
In the simplest terms, open banking allows financial service providers to access customers’ bank data with their consent. Once the customer consents, their bank will issue an access and refresh token so companies can access their data for 180 days.
It can be as simple as getting basic personal data, like a user’s full name, date of birth and (in some cases) where they live. But it can also be as specific as verifying their source of wealth and collecting transactional data to support fraud analysis.
Here are two ways open banking can simplify and improve your KYC checks:
1. Instantly access financial data from thousands of banks for faster KYC checks
Open banking streamlines KYC checks with real-time customer and account details. For example, a lender can use open banking to access financial data from thousands of banks. This makes it simple to validate personal identity information for KYC checks and significantly improves credit assessment accuracy through open banking.
By connecting directly with banks, open banking saves companies time and money on every KYC check.
Because open banking was built with security in mind, customers will receive two-factor authentication during the onboarding process to prevent fraud.
2. Better assess risk with more detailed views of your customer’s behaviour
Open banking gives you a much clearer picture of your customer’s behaviour, providing access to more detailed data than ever before. You can review their full transaction history and spending patterns, which helps you create more accurate risk profiles. With this level of insight, you can easily spot potential red flags—such as unusual spending habits or income discrepancies—that could signal fraud or financial instability.
For example, say you’re a lender and a customer has regular income from multiple sources and then suddenly stops receiving payments from one. This could indicate a change in circumstances that might need further investigation. Having access to this kind of information helps you spot these issues early so you can act quickly and responsibly.
Open banking KYC checks help you make smarter, more informed decisions while protecting your business and customers.
How open banking can help with Anti-Money Laundering (AML) checks
It costs UK banks almost £30 billion to comply with anti-money laundering laws. Could open banking be a solution to this? Absolutely.
Right now, companies have limited account information about their customers, mostly from what they tell them (and what’s available from public sources). This makes it difficult for companies to fulfil their Anti-Money Laundering (AML) obligations, which include verifying their customers’ identities and monitoring transactions for potentially illegal activities.
One-off AML checks also don’t address long-term risks.
But with open banking, companies have access to a consistent and reliable transaction data source: the customer’s bank account. For lenders, open banking gives a better picture of a customer’s financial history so they can make informed decisions and assess their lending risk.
For example, imagine a customer suddenly getting a large deposit into their account without an obvious explanation and quickly transferring that money to several other accounts. That could be a sign of money laundering. With open banking, you can monitor unusual activities in real time and step in if something doesn’t look right.
Open banking gives you the tools to stay on top of AML regulations and protect your business from suspicious activity.
We can help you streamline your AML checks through open banking. Want to see how? Book a demo
Why use Yapily for your open banking KYC and AML checks?
We get it—navigating KYC and AML compliance can make customer onboarding a headache. That’s why you need a solution that makes the whole process easier and more efficient.
Yapily Validate streamlines and enhances your KYC (Know Your Customer) processes by verifying customer identities and financial information through open banking data.
It connects directly to customers’ bank accounts, providing real-time access to accurate financial data such as account ownership and analysis of spending and transaction patterns, all of which help you verify customer details more efficiently.
But why and when does it make sense to use a solution like Yapily? Here are three key reasons:
1. You’ll access wide coverage across 2,000 banks, giving you one of the best coverage across UK and Europe
One of the biggest challenges companies face is dealing with fragmented systems, where pulling data from multiple sources can slow down processes and increase operational costs. This happens when you work with an open banking provider that only connects with a few banks and financial institutions, and not all the ones you need to offer the best experience.
At Yapily, we help businesses streamline KYC and AML checks by connecting with over 2,000 banks across the UK and Europe. This broad reach allows you to access real-time, reliable customer data without the hassle of integrating with multiple banking systems.
Our coverage has over 80% success rates in key countries and jurisdictions like the UK, Netherlands, Germany, and France, ensuring smooth operations across borders.
By directly accessing user data through Yapily Validate, you can reduce the complexity of verifying identities and eliminate the need for costly manual checks.
Yapily supports multiple user authorisation flows, so you’re covered regardless of the bank’s consent methods. This flexibility ensures you can seamlessly integrate with any bank or financial institutions and improve your KYC processes without extra technical expertise.
2. Get full control over KYC branding for a better user experience and higher conversion rates
Ideally you want to be able to keep your branding consistent during identity verification. When you’re using third-party systems that feel disconnected from your own platform, it can break trust with customers and lead to drop-offs during onboarding.
With Yapily Validate you build and self-host the user-facing screens, giving you full control and ownership over the experience while our open banking API powers the data connection behind the scenes. Yapily Validate can be embedded directly into any application.
This allows you to maintain your branding throughout the process while benefiting from our secure and compliant identity verification. By having full control over the branding during identity verification, you can build trust and ensure a smooth and secure customer experience. Additionally, our autofill capabilities simplify data collection, speed up KYC checks, reduce manual errors, and help improve conversion rates.
3. Implement open banking quickly and securely with our enterprise-ready API and expert support
As an enterprise company, you’re likely dealing with large volumes of sensitive customer data and strict regulatory requirements. Your KYC checks are just taking too long, costing you time and money.
Yapily’s enterprise-ready API is specifically designed to handle high volumes of data, ensuring top-level security and seamless scalability as your business expands.
Our solution helps you streamline KYC processes, reducing manual work while staying compliant with evolving regulations.
We’re ISO certified, so you can trust that our security infrastructure is built to meet the demands of large enterprises managing complex KYC checks. We’ll also provide dedicated onboarding support and a responsive team of experts who can help you optimise your use of open banking data to enhance KYC performance and improve customer adoption.
Open banking and KYC: a better way to onboard new customer securely
Open banking helps companies see more customer information, which can help stop fraud. This information lets companies identify potentially risky new customers, make better-informed decisions, and save money on compliance.
Do you perform hundreds or even thousands of KYC checks every month?
Reach out to Yapily to talk about how open banking could speed up your user journey, accelerate product adoption, and build trust with your customers.
