Cascade FinTech

How a Strong KYC Process Can Improve ROI on Your Cardholder Acquisition Dollars

Every time an enrollment is denied, there is a lost opportunity for a new customer to enter your card program. Simultaneously, the enrollment process filters out those who may do your card program harm. For this reason, it is crucial to understand the best channels that provide quality enrollments in your payments or card program by understanding its Approval or Pass Rate. This is the rate of enrollees who pass the set of processes that ensure they are who they say are, versus the total number of enrollment attempts. The higher the “Approval” or “Pass Rate”, the more unique accounts can be generated for your card program. These unique accounts then can become active funded cardholders, who load the card with funds and use it for everyday expenses.

It is also essential that your card program has the right set of approval processes in place to correctly identify prospective cardholders during an attempted enrollment. In a modern online card program, the first line of defense is called the “non-documentary” method of approval. With this method, your customer’s information is run through multiple national databases to see if the information they provided matches these records. If the prospective cardholder passes, there is nothing else to do; they have successfully passed the Know Your Customer (“KYC”) process.

It is important to keep in mind that not every individual who submits their information can get approved with this method because it uses public records for confirmation. This means that potential customers without credit history or utilities in their name may not pass and get approved using this form of identity check. Suppose a person does not pass this initial screening. In that case, they are passed over to a document screening procedure to review the prospective customer’s identification manually.

In this situation, the prospective enrollee would have to submit an official form of identification, such as a state-issued license, along with a selfie photo taken with their mobile phone camera. Either automated or manual systems would then be used to verify that the picture in their ID matches their selfie photo, verifying the document’s authenticity. By using this waterfall approach, prospects have more than one opportunity to pass the KYC process.

A strong compliance team’s goal is to get as many legitimate enrollees approved with the least amount of friction possible. They will make sure that the folks you do business with are the valuable customers you’re looking for. This gives a card program more confidence in the cardholder pool’s quality, with a greater potential for active, funded cardholders and less likelihood of generating fraudulent accounts. Understanding the marketing channels that generate these higher quality enrollments means a lower cost-per-enrollment and a bigger bang for your marketing dollars.

Not only will this protect and improve your payments business, but also your organization’s reputation. Don’t have a robust compliance team or a system in place with the experience to manage these intricate processes? Cascade has both, and we will do our best to weed out the harmful elements and, pardon the pun, do the due diligence to make sure that you do indeed “Know Your Customer.”