Global KYC: How to build a compliant program that scales with you
Darren Neil
KYC Specialist
If you’re scaling your business globally and working to achieve Know Your Customer (KYC) compliance in each new market you enter, you’ll likely experience some of these common challenges:
- Compliance becomes increasingly complex as you expand into new markets because each region has its own KYC regulations you have to keep track of.
- Your onboarding process may be too resource-intensive because you’re using multiple vendors for different KYC elements, from document authentication to ID verification. This means you’re juggling numerous service-level agreements, billing cycles, and integrations, which makes scaling more difficult.
- Static KYC workflows and manual processes that aren’t tailored to a customer’s geographic location or risk profile make your onboarding process longer and more complex than it needs to be. This leads to high drop-off rates and a low return on investment, which is especially noticeable at a global scale.
In this article, we’ll cover:
- Why building an effective global KYC process is so difficult
- How KYC regulations differ around the world
- Why working with a global KYC provider may be the right solution for you – and how to pick the best one for your needs
- How GBG helps businesses build an end-to-end global KYC program
- How GBG helped CoinJar accelerate customer onboarding and support global KYC compliance
Ready to start building or fine-tuning your global KYC program? With GBG Go, our all-in-one identity orchestration platform we built based on 30+ years of experience, you can verify identities in 195 countries. Request a demo.
Why building an effective global KYC process is so difficult
Over the last 30 years in the identity verification space, we’ve noticed that companies conducting global KYC deal with these specific challenges time and time again:
1. Identity verification documents differ in format around the world
Government-issued IDs vary widely from country to country (or state to state in the US), and different languages within a region add further complexity when verifying IDs and other documents.
Other nuances can also complicate the verification process. For example, in Latin America, it’s common for people to have two surnames instead of one, which can confuse non-Hispanic name screening systems. Those in underbanked or unbanked regions and remote locations with no utilities may also not have the right verification documents.
These challenges can often result in false positives and an increased need for manual review. And when a customer is wrongly identified as a flagged individual because their name or document is processed incorrectly, your compliance teams spend unnecessary resources on investigating the false alarm.
2. Managing multiple vendors can cause a strain on resources
As you expand, you’ll need to find new local vendors to access the right data sets and configure different parts of the onboarding process based on which documents are needed. A vendor from Iran, for example, would likely struggle to access the right databases in Germany, where data privacy laws are particularly strict.
As a result, you’re pouring resources into managing multiple vendor relationships, building technical integrations and consolidating data across vendors instead of the product that awaits the customer after onboarding is done. This makes it difficult to scale across more countries and ultimately decreases your ROI on each new customer you onboard.
3. Ensuring compliance with varying local data privacy rules and regulations requires significant resources
Data protection regulations vary by region, with data storage and transfer restricted in some areas more than others. For example, the European Union follows the General Data Protection Regulation (GDPR), which is widely considered to be the world’s strictest privacy law, with powerful enforcement mechanisms like significant fines for non-compliance.
On the other hand, the US lacks an overarching data protection law, though some state laws exist, such as the California Consumer Privacy Act (CCPA). These variables mean you must adjust the way you handle data according to each region’s rules.
Similarly, KYC regulations vary from one country to another. Staying compliant requires a deep understanding of each country’s rules and best practices, and since regulations frequently change, significant resources are required to stay up to date.
4. It’s difficult to balance customer experience and compliance manually at scale
Collecting more customer information increases the accuracy of your risk assessment and therefore of onboarding good customers. However, it can also add friction to the process if a lot of it is done manually. Lengthy approval waiting times or forcing the customer to go off-platform to send documents via email, for example, can cause genuine customers to drop off, negatively impacting conversion rates and revenue.
Too little information, on the other hand, leads to a less accurate assessment and increases the risk of potential fraud or the accidental turning away of genuine customers. As you scale globally, this becomes even more important because you’re handling higher customer volumes, which means more checks, more risk profiles and higher chances of fraud.
This means that creating a process which ensures both a positive customer experience and compliance across regions often feels like an uphill battle.
How KYC regulations differ around the world
While the key aspects of KYC – verifying customers, understanding their risk profile with CDD (Customer Due Diligence) and ongoing activity monitoring – are the same regardless of location, regulations and requirements vary across jurisdictions, and so do the organizations that enforce the rules.
Some regional variables include:
- What types of businesses must comply with KYC laws
- The types of documents or data that can be used for identity verification
- How customer information and data is stored
To help you remain compliant, here is an overview of how KYC is regulated in different regions across the globe:
United States: complex due to state-by-state differences
In the US, KYC compliance is complex because of the country’s multiple regulations, such as the Bank Secrecy Act (BSA) and the USA PATRIOT Act, and the agencies enforcing them. Additionally, the US lacks a singular data protection law and instead relies on a combination of federal and state laws, such as the CCPA. The US takes a risk-based customer due diligence approach, with enhanced due diligence required for higher-risk customers.
Because of its high technological adoption rate and fragmented regulatory environment, the country is an attractive target for sophisticated fraudsters who use AI and other technologies to make scams more difficult to prevent. This AI-enabled fraud increases the need for ongoing monitoring (because identities can be compromised after onboarding), biometric and device-based identity verification, and synthetic identity detection.
Businesses that must comply with KYC rules include:
- Financial institutions like banks and insurance companies
- Cryptocurrency exchanges and high-value transaction businesses, such as casinos and real estate companies
Europe: numerous official languages and ID types create complications
While oversight is fragmented across EU member states, Anti-Money Laundering Directives (AMLD) guide KYC regulations across the board to fight financial crime. Data protection, which is governed by the GDPR, is a top priority in the region.
Europe takes a risk-based approach to customer due diligence, with varying levels of scrutiny based on the customer’s risk level. Twenty four official languages and numerous IDs types result in language barriers and varying document formats that make compliance harder to achieve.
Businesses that must comply with KYC rules include:
- Financial organizations, including credit card companies and payment service providers
- Crypto transfer services and gambling operators
- Other regulated professions, such as lawyers, art dealers, accountants, and real-estate agents
United Kingdom: challenging because of a lack of national ID program
The Financial Conduct Authority (FCA) is the UK’s main regulatory body for KYC compliance in the financial sector, while His Majesty's Revenue and Customs (HMRC) and the Gambling Commission supervise other sectors.
The UK General Data Protection Regulation (UK GDPR), which is based on Europe’s GDPR, and the Data Protection Act 2018 work in tandem to set data privacy standards.
A risk-based customer due diligence approach is standard in the UK. The country’s lack of a national ID program makes KYC more complex than in markets with single government-issued IDs and forces companies to rely on a patchwork of data sources and other documents, such as driver’s licenses, passports, or electoral rolls.
Businesses that must comply with KYC rules include:
- Financial institutions
- Gambling and gaming businesses
- Legal and professional services like real estate agents, trust service providers, and high-value dealers
Canada: evolving regulations require extra vigilance
Canada’s KYC landscape is shaped by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and enforced by FINTRAC, which issues detailed operational guidance for compliance. The Personal Information Protection and Electronic Documents Act (PIPEDA) sets standards for data collection and use, however, additional provincial laws can also apply.
Canada uses a risk-based customer due diligence model similar to the US and Europe. Rapid updates to FINTRAC and PCMLTFA guidelines, such as expanding the list of sectors that must be KYC compliant, mean companies must be extra vigilant to ensure they don’t become non-compliant.
Businesses that must comply with KYC rules include:
- Agents of the crown, financial institutions, and money services businesses
- Precious metals and stones dealers, securities dealers, and casinos
- Accountants and legal professions
Latin America: unique naming convention creates verification issues
Most countries in Latin America follow Financial Action Task Force (FATF) recommendations for KYC compliance, which include risk-based customer due diligence and beneficial ownership transparency. Additionally, some countries, such as Brazil and Argentina, have organizations that set further guidelines and oversee compliance.
The standard naming convention used in Latin America (two surnames instead of one) adds complexity to the KYC process and can result in document verification issues and false positives.
Businesses that must comply with KYC rules include:
- Financial institutions
- Gambling and gaming institutions
- Real estate, as well as legal and accounting services
- In some countries, telecommunications services and customs agents
Asia-Pacific: highly diverse and increasingly risk-based framework
KYC regulation is highly diverse in the Asia-Pacific region. However, requirements are generally based on FATF standards. Like in Latin America, many countries within the Asia-Pacific region also have their own KYC laws and entities that oversee compliance.
Some examples include China’s Anti-Money Laundering Law, Japan’s Act on the Prevention of Transfer of Criminal Proceeds (APTCP), India’s Prevention of Money Laundering Act (PMLA) and Singapore’s Monetary Authority of Singapore (MAS) regulations.
Businesses that must comply with KYC rules include:
- Businesses vary by region but generally include financial institutions, digital asset service providers, securities and investment firms, real estate companies and payment service providers
Africa: uneven across countries but steadily strengthening
KYC regulation in Africa is diverse, with some countries tightening supervision, while others are in the early stages of implementation. South Africa’s Financial Intelligence Centre Act (FICA) mandates strict KYC compliance, making the country a leader in the region.
Underbanked citizens or those without utilities lack many of the documents typically used for identity verification. Infrastructure issues, such as unreliable internet access, may hinder the onboarding process if it requires the customer to upload a selfie, for example.
Businesses that must comply with KYC rules include:
- Business types vary across countries but typically include financial institutions, car dealerships, real estate agents, casinos, law firms and some non-profits
Why working with a global KYC provider may be the right solution for you – and how to pick the best one for your needs
Global KYC challenges all stem from three core issues: complex compliance requirements, a lack of high-quality data sources internationally, and the operational fragmentation that occurs when teams try to stitch together regional tools and manual processes.
To tackle these problems, it makes sense to work with a global KYC provider that offers a unified process that works across borders.
The right global KYC provider can help:
- Increase your match rates with access to a greater breadth of data in all the areas you want to do business in
- Support compliance in higher-risk sectors like online gaming and markets by providing guidance based on industry- and region-specific expertise
- Speed up your onboarding process with an automated flow that fast tracks low-risk customers based on elements like risk thresholds pre-set by your compliance teams, decreasing drop-off rates
- Allow you to remain compliant and stay on top of local regulations
However, it’s important to remember not all providers offer the same levels of regional regulatory expertise and data coverage. When choosing a global KYC provider, look for one that enables you to:
- Connect to the right authoritative sources in the countries you want to be live in: The provider should be highly operational in your target markets, and it should also have the right depth of data and ability to verify a wide range of ID types within those countries.
- Access expert regional compliance support as you navigate different jurisdictions: A provider with the right subject matter experts can offer localized compliance support and stay on top of new regulations so you don’t have to worry about becoming non-compliant and facing heavy penalties.
- Scale efficiently with an easy integration and all KYC components in one platform: When a provider’s end-to-end KYC product integrates quickly and easily into your systems, you can get up and running sooner and onboard more customers. Ideally, the platform eliminates the need to rebuild your identity data verification stack for every new country and allows you to plug into a single, unified system with an API that already works across jurisdictions.
- Automate intelligently to save resources, decrease drop-offs and maintain compliance: When each customer has to go through a static sequence of verification steps, those with low risk profiles get slowed down and may decide not to complete the onboarding process. To prevent this, seek out an automated KYC provider that adjusts customer routes dynamically based on factors like risk level and geography. Doing so will not only streamline onboarding but also save resources for higher-risk cases that require further review.
How GBG helps businesses build an end-to-end global KYC program
With more than 30 years of experience helping every business in the world connect safely with every genuine identity in the world, we’re a leader in the global identity technology space. We offer identity document and biometric authentication in more than 195 countries and international identity data that meets the strictest AML identity security and compliance standards in 50 countries.
Our end-to-end KYC product, GBG Go, takes customers from sign-up all the way to approval and ongoing monitoring, which includes 80 KYC elements – such as biometrics, PEPs screening, and digital ID verification – that you can build into your KYC workflows.
Here are a few reasons businesses choose to work with us:
1. Access comprehensive data coverage in 195 countries and scale with a single KYC provider
As you move into new markets, the limitations of a regional KYC provider quickly become clear. Gaps in data coverage can lower match rates, slow down onboarding and ultimately push you to bring in additional vendors just to meet basic requirements.
But managing multiple providers across different jurisdictions creates its own problems – higher operating costs, inconsistent data quality and increased exposure to compliance gaps caused by fragmented records and processes.
The solution is to work with a global KYC provider with infrastructure and data partnerships built to scale as you expand.
With an extensive global data ecosystem that includes hundreds of datasets in 195 countries, we complete 800 million identity checks annually using standardized data formats. This means we’re uniquely positioned to solve difficult data coverage challenges and help our clients:
- Increase match rates – even in areas where data is limited
- Comply with local KYC requirements with our expert advice
- Expand internationally with a single provider instead of multiple regional vendors
Check our comprehensive data access country by country with a global coverage map.
2. Get expert regulatory compliance support worldwide
Expanding into new regions reveals major inconsistencies in data quality and format, along with widely varying regulatory requirements. Our local compliance experts can help you make sense of intricate regional regulations and adjust to regulatory changes, shape policies that align with your risk tolerance and confidently operate in heavily regulated industries like iGaming.
For example, when iGaming Ontario launched, we were the first identity verification technology company to deliver identity verification solutions that were FINTRAC compliant, and now we help businesses successfully enter Ontario’s regulated online gambling market.
Within our platform, your compliance team can set custom risk thresholds and send customers through workflows that are tailored based on their jurisdiction, supporting compliance across many regions.
Our platform also provides a comprehensive, 360-degree customer view, presenting every customer as a complete file with all the relevant data – such as verification results and decisions, as well as identity information and notes – in one place. Having access to information in a centralized dashboard makes it easier for you to carry out fraud investigations and prepare for audits.
3. Speed up onboarding at scale with automated KYC workflows and dynamic routing
As you scale your business globally and perform more identity checks in more regions, the need for automation increases because manual processes can’t keep up with the volume, complexity and regulatory variables that come with growth.
Our solution allows you to automate routine checks and also tailor the verification flow to each customer depending on their risk level, jurisdiction and other factors, so low-risk individuals can move through more quickly than high-risk individuals requiring additional checks or manual review.
This helps manage customer growth without proportional increases in staffing, saves resources for high-risk cases and allows genuine customers to move through the onboarding process quicker.
How GBG helped CoinJar accelerate customer onboarding and support global KYC compliance
CoinJar, one of the world’s longest-running cryptocurrency exchanges, has helped more than 600,000 people worldwide trade and spend billions of dollars in more than 60 different cryptocurrencies.
CoinJar’s goal was to accelerate identity verification and customer onboarding while supporting compliance across multiple regions as the company scaled globally. Our scalable identity verification solution and trusted data sources in 195 countries helped CoinJar achieve this goal, reducing its reliance on ID checks, increasing overall completion rates and cutting down average onboarding times to seconds.
“We chose GBG because they offer an end-to-end identity verification solution with strong international data access, including the UK, European Union and Australia,” says James Elia, CoinJar’s General Manager. “We want to ensure KYC compliance across multiple jurisdictions, so it’s great that we can now securely verify thousands of customers with greater efficiency.”
Read the full case study here: Faster, first-time onboarding for crypto customers
Build a compliant global KYC program with GBG
Building a compliant, global, and robust KYC program is a complicated process with many moving parts. However, partnering with an experienced provider with a comprehensive global data network can simplify the process.
Our global adaptive orchestration platform, GBG Go, personalizes every onboarding journey based on custom conditions like location and risk score to support faster onboarding, higher match rates and compliance across borders: all within one platform.
Ready to discover how we can help you? Request a demo.
FAQs: Global KYC
A global KYC process includes:
- Verifying customer identities using region-appropriate sources, such as a passport, national ID card, bank statement or biometrics
- Checking customers against global sanctions lists, PEPs and adverse media
- Assessing customer risk based on factors like geographic location, occupation and income
- Performing enhanced customer due diligence for high-risk individuals
- Ongoing monitoring and performance reporting
Every region has its own KYC regulations, accepted document types and data privacy rules. Data quality and risk levels also vary by jurisdiction.
For example, in unbanked regions or remote areas with limited utilities, customers don’t have access to documents commonly used in the identity verification process, such bank statements and utility bills, meaning businesses have to rely on alternate verification methods.
In areas like the US, where there is a large population of consumers who are quick to adopt the latest technologies, fraudsters may use increasingly sophisticated scamming methods like deepfakes and synthetic identities, which means companies operating there need KYC solutions that can detect those methods.
Building a global KYC program is complex because you have to navigate diverse regulations, identity systems, fraud risks and data privacy requirements across multiple jurisdictions while scaling efficiently and maintaining a consistent customer experience.
One of the most common mistakes you can make when choosing a global KYC provider is focusing solely on coverage breadth without also considering depth: high-quality, authoritative data sources. Look for providers that are tuned into local identity infrastructures and have the right access to the right local datasets.
Other common mistakes include choosing a provider that fails to connect all KYC components in a single integration, doesn’t offer dynamic workflow orchestration or has an interface that isn’t customizable or easy for your teams to update.
The best global KYC solution allows you to onboard customers from anywhere in the world while remaining compliant across all jurisdictions. You should be able to tailor your onboarding workflows based on factors like geography and risk level, maintain compliance with local regulations and increase match rates with comprehensive data coverage. Popular global KYC providers include GBG, Trulioo, Jumio and Entrust.
