How APIs help companies stay compliant

Compliance is quick and easy to achieve thanks to APIs.
Florent Robert

It’s no secret that Open APIs are the way of the future for banks, payments, and other industries interested in innovative technologies that enable agility and scalability. APIs offers a quicker, easier and less costly path to deliver new services that meet consumer demands and expectations of today and tomorrow. Already, there are over 1,000 APIs in the financial category and many more to come as advancements in big data, AI, blockchain technology, machine-learning, and other areas take off.

While improving technologies are one reason for the growth of Open APIs, another key driver is the growth of regulatory compliance. Various new regulations around the world are coming into effect in the near future and financial institutions (FIs) require solutions to fulfill their legal obligations. In Europe, for example, the coming PSD2 changes will fundamentally alter aspects of payments that can best be accomplished by the use of APIs. Due to the speed and complexity of technical implementation, FIs that adopt a “wait and see” approach will find it increasingly difficult to keep pace and maintain market position, which is why APIs offer a viable option for FIs needing to satisfy compliance requirements while securing a competitive edge.

One area that APIs are already having a substantial impact is in KYC compliance. A legal necessity in many countries, KYC requires banks and other FIs to ensure that they have properly verified their customers. Traditionally, this means that they physically check and record primary identification documents, such as corporate records and financial statements.

For staff at FIs, manually verifying corporate documents is time-consuming, cumbersome and prone to human errors. It’s easy to see why — if staff is handling paperwork all day — errors work their way into the system. For the institutions, the cost of all those paper pushers is a burden on the bottom line; the average cost of meeting KYC requirements ranges from $60 million up to $500 million per year.

Using APIs for KYC compliance:

  • Provides a cost-effective solution,

  • Speeds implementation time as they can connect to existing infrastructure,

  • Integrates seamlessly with other applications,

  • Reduces the rate of clerical errors,

  • Improves staff efficiency by allowing them to focus on problem cases,

  • Improves staff morale by lessening the drudgery of manual paperwork,

  • Delivers better reporting and information flow,

  • Eases the burden of record-keeping, as the process is digitized from the beginning,

  • Systemizes procedures across units, divisions and operating companies,

  • Enables quicker entry into new markets,

  • Provides a smoother customer onboarding experience, and

  • Speeds up customer onboarding, decreasing churn.

Built for scalability and flexibility, Ondorse API is a RESTful (REpresentational State Transfer) API, ensuring that it is ready to meet future needs as Ondorse continues to integrate additional countries and data sources.

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