How 2020 Has Changed KYC Forever: A Yearly Recap

The latest industry news, interviews, technologies, and resources.
Nov 16, 2020
5 min read

Let’s just say that nobody is sad to see 2020 go. For a lack of a better word, the past 10 months have been...challenging. The world has changed, we have changed and businesses all around the globe have changed with us. 

The pandemic shifted the way we live our lives, the way we do business and the way we think about the future. In the case of KYC, Covid-19 might just have redefined an entire industry. 

Know Your Customer and client onboarding might not have shown symptoms of the weird virus that has dominated our newsfeed but its effects on an industry that was just hitting its digital stride, will echo for years to come. 

In today’s article, we will take a look at how 2020 has shaped the KYC industry. Let’s dive right in. 

Agile Client Onboarding

The term “agile” is closely related to software development. It refers to a very particular way of writing code, building products and working within a team that follows a very “fail fast, fail early, fail safe” mindset.  

Agile development usually includes early project delivery, and continual improvement, encouraging flexible responses to change. How does all of that relate to KYC? Let us explain. 

Covid-19 has made remote work the norm and onboarding clients had to follow suit. Marrying the idea of the agile methodology with client onboarding, what you get is risk-light implementation of digital KYC.

Digitising your client onboarding is no easy task. There is considerable cost, risk and resources associated with such a roll-out which is why not every company is diving head first into it. 

With agile client onboarding you will be essentially drawing expertise from different teams and departments such as UX/UI, customer support, IT  and more by creating cross-functional teams collaborating towards specific objectives. That accelerates the process and brings you closer to a proof of concept. 

What 2020 managed to do is showcase the need for the agile development, deployment and use of KYC tech. Moving forward, businesses and end-users alike will have to adjust to this new value proposition.

FATF Paper on COVID-19-related Money Laundering & Terrorist Financing

A few months into the pandemic, global money laundering and terrorist financing watchdog FATF, released a paper directly related to the new reality created by the pandemic. 

The paper focuses on the new and increased threats stemming from Covid-19-related crime and offers suggestions on how to mitigate risk and implement measures. 

Here is how, according to the report, Covid-19 is creating an environment that’s attractive to criminal behaviour:

  • Increased remote transactions
  • Unfamiliarity with online platform
  • Unregulated financial services
  • Exploiting stimulus measures

If you take the FATF recommendations and combine it with the behaviour of the masses during the pandemic, you quickly realize why KYC suddenly becomes paramount for business and customer protection. 

Here are a few of the trends and patterns in customer behaviour during the pandemic:

  • People withdrawing hard currency in a state of panic 
  • Increased use of mobile banking apps 
  • Uptick in the volume of virtual currency 

These shifts are making it harder for companies to decipher between legitimate activity in a time of crisis and illegal transactions.

The FATF Report wasn’t a precautionary measure. The pandemic caused an uproar in online crime with fraudulent emails up more than 600% since the end of February according to some reports and 56% increase in ransomware attacks according to others

The pandemic has essentially fast-tracked the process of digitisation, online payments, and remote business. While KYC was already trending towards that direction, it’s safe to say that now it has become more of a necessity than a general direction. 

Integrated, Automated Solutions

Remote work made the use of API-connected solutions a must-have. 

Companies need solutions that communicate with each other via technologies like application programming interfaces so that customer onboarding, KYC and compliance screening can occur without compromising AML/CFT risk.

API integration is not the only attribute companies will be looking out for going forward. Companies are forced to jump from the era of manual processes and printed documentation to needing sophisticated compliance tools powered by automation, machine learning and artificial intelligence


2020 is coming to an end and KYC is coming through the other side stronger than ever. The change caused by the pandemic is a positive one. The industry is evolving fast and so should your business. 

What the pandemic has managed to do is showcase the importance of having a tech-savvy, agile, regulation orientated partner that can provide you the necessary tools to set up your KYC and customer onboarding process. 

Times are changing and those who will survive are those who can learn and adapt on the fly. Companies are finding out that they don’t need someone that will simply sell them a product/service. 

What they need is a partner, a confidant, a consultant that will be there to advise them when things change as abruptly as they changed during this past year. Sophisticated compliance technology is the ultimate solution but not without the wisdom of KYC professionals that will help you implement it. 

Our team here at Identomat prides itself in not only producing top-of-the-class AI-powered KYC solutions, but offering clients the guidance and support they need to navigate their unique compliance environment. 

If you wish to enter 2021 with confidence around your KYC processes, do not hesitate to contact our team and have a discussion regarding your needs.

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