We often hear the phrase “in the future every company will be a fintech”. On a practical level that’s saying every business will embed and offer financial services. And that means every business needs KYC. This is especially true for any business that offers monetisation.
What can go wrong without strong KYC?
Twitch, the giant live-streaming company best known in the gaming space, recently came under fire for failing to prevent money laundering. A data breach revealed Twitch had allowed a money laundering ring based in Turkey to clean approximately $7.2 million through the company in just over two years. Viewers are encouraged to donate funds to streamers through in-app currency, Bits, which can then be converted into real cash by the streamer.
Twitch is hardly alone in this situation, there are many other companies that are just as exposed to money laundering and other financial crimes. The trouble is that facilitating easy customer onboarding without strong KYC and embedded financial services, these companies are at risk of unknowingly providing lucrative money laundering platforms.
The laundered $7.2 million has led to calls for the streaming company to be investigated by Turkish politicians. An interesting side-note is that Turkey was recently grey-listed by FATF in October 2021, lending support that the local market is not doing a good job at preventing financial crime.
This particular money laundering operation was made easier due to the sheer number of participants. 2400 streamers, all receiving parts of the illicit funds and funnelling that money through their Twitch accounts and into a bank account.
The operation was only discovered due to the funds the streamers received being out of step with their follower counts, the size of their audience made the money they were making suspicious.
It’s simple to sign-up for Twitch, all you need is an email address. Purchasing Bits can be done with a credit card or PayPal. The streaming company relies on the banks and payments processors to handle compliance issues for them. But this evidently isn’t enough to protect the company from unknowingly assisting money laundering.
So where does KYC fit in?
Stronger KYC at the point of purchasing in-app currency or donating that currency would likely help reduce the exposure Twitch has to money laundering. Easy customer onboarding is a good thing, it’s what we excel in here at HooYu, but without tying it to strong KYC configurations it’s pointless and leaves your business exposed.
Customer onboarding needs to be fast and simple, but not at the expense of protecting your business from financial crime. That means configuring an onboarding journey that glides your customers through the process while still meeting the risk-based approach of your company.
There is a real need to make the customer onboarding journey as easy as possible, it’s the culmination of your marketing and sales funnel to convert potential customers into active ones.
That’s why we provide a low-code-no-code mobile-centric journey that has been tested on millions of users, saving our clients valuable resource by optimising the onboarding process. And this process will help protect your business from being an asset to money laundering, from being investigated by national governments, and from being fined by regulators, all because it will be efficient while maintaining compliance standards.
Our platform provides everything you need to orchestrate KYC processes at a granular level. KYC should be at the heart of the customer onboarding journey. It’s what allows businesses to take payments, process customer money, and pay money out to customers without ever having to wonder if anything nefarious is happening.
Using HooYu, your business can easily deploy KYC across multiple markets, product portfolios, and customer risk segments. All possible while optimising for customer onboarding success, making sure that those who use your platform are legitimate customers.
