Know your customer (KYC) checks are not something that you would ordinarily associate with the motor financing industry, but they’re vital to preventing fraud and theft of goods.
Simple database checks are not the answer to the issue of fraud and theft. Fraudsters have created more sophisticated methods to create synthetic identities and steal the identities of others. Now a database check is just one data point that can be used to build the overall identity profile of a potential customer.
Why the motor industry needs better KYC
Few customers are able to pay for a car outright in cash, often they need to finance the purchase and that involves significant levels of trust as the dealer is often exchanging a product worth £20,000 plus for a single down payment. You need to know that they’re not just going to drive off with the car and the money.
You don’t want to drive away potential customers so you may choose to make your KYC journey multi-step and to check identity and address at different stages of the purchasing journey. To do this you need to make sure you’re using a KYC provider with a fully configurable interface. There are plenty of great user interface(UI) features that can make this possible, allowing for a customer onboarding journey that progresses according to your needs.
Motor financing relies heavily on KYC checks. As distance becomes a more relevant factor in the sales process thanks to the rise of internet purchases, having a strong digital KYC journey for customers is vital. Making sure that the customer is able to engage with the journey on their own terms is important, but you also need to make sure that you can keep them focused on the journey when other parts of life get in the way.
Sending nudges is a great way to do that. And to show your customer that you’re able to cater to their needs, it’s even better to have local device detection tools built into the journey so that messages can be delivered in their chosen language automatically.
Why it matters for motor finance
Motor companies have either a regulatory or fiduciary responsibility to understand their customer and conduct KYC checks. Often a company is handing over a car, worth tens of thousands of pounds, in exchange for a small deposit or the promise of monthly payments.
Motor companies have a financial interest in checking identity, often done through the driver’s license in these situations, and knowing their customer. Although these issues may not crop up particularly often, every time they do occur, the business is losing thousands.
Driving license validation is not built equally across the industry, a KYC supplier that can register the individual component security features as accurate are not common. We’re able to examine the microprint, embedded codes, raised lettering, holograms, and other security features that other validation tools fail to spot. And we can scan and validate them in seconds – meaning that you can have more security in your onboarded customers.
In-depth checks are not always necessary at every stage or for every transaction. Especially once a customer has built a history with your business. Customer due diligence measures can be scaled up or down based on your company’s risk-based approach depending on geography, payment method, or even the value of the vehicle.
Using a KYC tool that can be configured to these specific needs, like HooYu, can save a lot of pain in the integration period and makes for a smoother customer journey.
Improve your motor financing KYC journey with HooYu and get in touch
