How Crypto Wallets Can Manage Onboarding and AML Efficiently
By Leor Melamedov
Cryptocurrencies and crypto wallets are taking off. As of 2021, there are at least 144 million Bitcoin wallets, and that number is only growing. But as crypto wallets become more mainstream and less niche, they are starting to be held accountable to anti-money laundering (AML) regulations, just like ordinary financial services providers. Here, we’ll discuss how crypto wallets can continue to convert leads and hold onto customers — despite AML requirements.
Impact of AML on Crypto Wallets
When it comes to crypto wallets, regulation is by jurisdiction and changes regularly. But it certainly exists, and is becoming more stringent. FinCEN’s Final Rule in the USA and the Fifth Anti-money Laundering Directive (AMLD5) in Europe ensure that virtual currencies and exchange platforms are subject to AML regulations.
On the positive side, this increased oversight encourages crypto companies to be taken seriously and maintain legitimacy. But it doesn’t come without a cost. With greater regulations comes more costly onboarding, time-consuming paperwork, and headaches for customers and employees. Manual AML procedures threaten to reduce the appeal of cryptocurrencies, which are lauded for their accessibility and decentralized approach. Crypto currencies would be crushed by too much friction.
Therefore it’s important for crypto wallets to stay on top of the latest rules without sacrificing speed and efficiency. Crypto wallets must implement bulletproof KYC procedures to prevent bad actors from exploiting their services — without hurting the onboarding experience.
This means that crypto wallets will need to carefully choose the right onboarding software to compliantly convert leads into fully funded accounts, all while maintaining speed and efficiency.
How to Choose Onboarding Software for Crypto Wallets
There are plenty of digital onboarding options available to crypto wallet companies. As their core, they need to verify customer identity, collect new customer information, and open accounts.
Digital ID verification is a critical part of AML, but to maximize efficiency crypto wallets will also want to digitize document collection, forms, signatures, and more.
Some onboarding solutions harness AI to determine whether ID and documents are legitimate, facial recognition to compare a customer’s selfie with their photo ID, time-stamps and audit trails to ensure court-admissibility, and automated digital workflows to cut down on agent decision-making and manual work.
The process of evaluating customer onboarding software should include a review of key attributes. The software should encourage AML compliance without sacrificing convenience. To ensure this balance is met, watch out for the following attributes:
1. Compliance- and Security-Enhancing Features
Understandably, crypto wallets are anxious to stay compliant. Therefore, any onboarding software must meet or exceed the standards of paper-based regulatory paperwork. The software should:
Allow admins to easily update business rules, form fields, and document requirements in response to changing regulations.
Use a robust digital ID verification system that allows customers to instantly submit their photo ID and selfie for automatic verification.
Collect all documents and forms from a secure environment that uses technology such as single sign-on, one-time passwords, audit trails, and HTTPS encryption. The more layers of (seamless) security, the better.
2. Location-Independent Onboarding
Today’s crypto customers expect to be able to open a new account from anywhere, and from any device. Customers should:
Enjoy a consistent, intuitive onboarding experience whether they’re completing the process from a smartphone, tablet, desktop computer, or any other channel.
Be free to onboard from a call center, physical branch, drive through, or online.
Be free to onboard without the involvement of devices such as printers and scanners, which limit them to onboarding from specific locations.
Be able to complete the entire onboarding process from wherever they happen to be, without the need to switch channels or visit a branch at any stage.
3. Agent Augmentation
Client onboarding software isn’t meant to replace employees. It’s meant to augment them. Customers in the process of onboarding should still have access to over-the-phone agents who can walk them through the form-filling and KYC procedures, and answer any questions. Agents should:
Be able to view the customer’s onboarding application in real-time from their own consoles.
Know exactly which documents and forms are required from which customers based on customer type (e.g., business client, high-risk client). Business process automation can make requirements crystal clear.
Facilitate digital ID verification with limited to no manual effort.
Spend less time processing paperwork, and more time on higher-order activities such as offering guidance and relevant cross-selling.
4. Self-Onboarding Options
The best customer onboarding software can be used in flexible ways. Just as some customers want an agent to guide them through the digital onboarding process, other customers would rather go it alone. Self-onboarding should:
Be able to be entirely completed from within an email body or website.
Allow existing customers, whose information is already in the system, to apply for additional accounts without having to repeat information (via pre-populated forms).
Allow new customers to fill out application forms, upload stipulations, read and consent to T&Cs, and apply for credit cards.
Allow customers to get help if they decide they need it by embedding a live chat option and clearly displaying the call center number.
5. Easy Integration Into Existing Systems
Onboarding software shouldn’t and can’t be a standalone technology. It’s meant to integrate into existing systems, allowing crypto wallet companies to maximize their ROI from currently used tools. Onboarding software should include APIs that integrate with:
Third-party business applications
Agent call center toolbars
Stay Agile and Compliant With the Right Onboarding Software
The right onboarding system allows crypto wallet companies to satisfy regulatory requirements without sacrificing speed and efficiency. With advanced technology baked into the software, customers can onboard easily and from anywhere.
Here are some of the immediate benefits crypto wallets can get from the right digital onboarding software:
Higher completion rates: Crypto wallets no longer see customers abandoning the onboarding process due to lengthy application forms and excess friction.
Less chasing of customers: Customers are able to complete the entire onboarding process in one shot, from one channel. This eliminates the need for them to call again, or for agents to follow up.
Bulletproof AML: With automated onboarding workflows, agents know exactly which stipulations are required from which customers, preventing compliance lapses.
Improved customer experience: New customers feel they have received the “white glove” treatment even before they hold an active account, contributing to a positive experience early on in the customer lifecycle.
With the right software in place, there is zero contradiction between abiding by AML regulations, and maintaining onboarding momentum.
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