Signing off on KYC with Visma Addo

Secure digital signatures and KYC workflows with Visma Addo

Digitisation has permeated almost every aspect of our lives. Yet, most people still think twice before signing a document digitally, especially if it’s a mortgage agreement, a rental contract or a highly sensitive settlement between companies. Intricate compliance checks take place in the background before any of these types of contracts get signed, and for good reason: financial crime is on the rise.

The subject of Europe’s largest money laundering scandal was Danske Bank, which reported that around €200 billion in questionable money flowed through its Estonian branch between 2007 and 2015. Internationally, it’s estimated that up to 5% of global GDP is laundered by criminals each year. In response, financial institutions are expanding their compliance departments to deal with tougher Know-Your-Customer (KYC) and anti-money laundering regulation. In the Netherlands, NOS¹ reports that ABN Amro increased its compliance staff by 550 people in 2018. ING grew its global compliance departments by 3,000 jobs in 2018, and still has vacancies to fill. New technologies are also coming to the rescue, paving the way for more efficient and accurate compliance. In this blog, we will outline how Visma Addo streamlines compliance by combining KYC checks and digital signing, in a single solution

KYC: Comply or Pay Up

It’s no secret that banks are under pressure to combat financial crime. A hiring spree has taken over the industry, as we explain above. Banks that fail to meet KYC, sanctions and AML requirements face hefty fines. In Europe, regulators issued $1.7 billion in fines between 2008 and 2018 alone. The consequences of financial crime are grave for individual citizens as well, and failing to prevent it takes a huge toll on a bank’s reputation. Consequently, banks should take this seriously. But it’s not just banks that have to deal with compliance. Insurance providers, companies, and government institutions need to apply appropriate KYC checks in many situations too. The question is, how can they reduce the burden of compliance and execute their duties efficiently?

Compliance varies greatly depending on the use case, the country and regional legislation. Generally speaking, if you’re engaging in a financial transaction, you need to ensure that you know who the person on the receiving end is. If it’s a private person, you need to check whether they are politically exposed. If the transaction is taking place between companies, you need to know where they are located (for sanctions screening) and who owns the shares, among other things. In all of these cases, you need to gather information before the transaction is completed and the agreement is signed.

Compliance in the digital age

Normally, this process of gathering information is highly time consuming and manual. First, you would start by collecting the contact details of everyone who needs to be involved. If it’s a company, that would be their financial department. They would need to provide information about their financial situation, their tax number, and so on. Once you collect that information (typically through interviews carried out by email or phone) and include it in the agreement, you would send the contract to whoever is responsible for the company. To make sure they are who they say they are, you’d most likely request to sign in person. If multiple people need to sign, you would need to get all the stakeholders in the same place at the same time, travel to each individually, or send the document to the first stakeholder, get it signed back, and repeat the same process for the rest of them. Needless to say, this is quite taxing considering the pace of business today.

Digital signatures are a more convenient option. In the European Union, the eIDAS regulation emerged to establish a consistent legal framework for electronic signatures. Article 25 of the eIDAS regulation contains a decisive ban on discrimination against agreements concluded digitally. In other words, as an enterprise or authority, you cannot refuse to accept or recognize contractual documents solely on the grounds that they are digitally signed. The regulation also specifies that Qualified Electronic Signatures have the same legal effect as handwritten ones and are recognized as legally valid in EU member states. Therefore, having a solution in place for electronic signatures is more important than ever. Visma Addo provides a digital signing workflow and a questionnaire functionality that helps you know-your-customer, all in a single solution.

How does it work?

Visma Addo is a platform for digital signing and authentication. To get started, you simply upload a file and select the signing method that is most appropriate for your use case. Available signing methods include:

Touch screen
iDIN
eHerkenning
Qualified Electronic Signatures
BankIDs in the nordic countries

Supported authentication methods include:

SMS codes
Advanced 2-factor authentication
iDIN
eHerkenning
BankIDs in the nordic countries

We support different signing and authentication methods per country. The signing method determines the signature type and its level of trust. Then, you can send the document to the signatory with the click of a button. You can also specify how many reminders you want to send to the signatory and how long you want the signing invitation to be valid. The recipient will get notified by e-mail or SMS.

For use cases where you want to make use of the KYC questionnaire, we work closely with your legal department to determine the type of information you need to collect before an agreement is signed. This information may vary depending on your organisation’s requirements or (local) compliance legislation. The questionnaire is dynamic, so you can ask different questions depending on the answers provided. Once the questionnaire is customised to meet your needs, you can send it to the relevant recipients using the platform. When the information is retrieved, you get notified. If it all checks out, you can generate an agreement and send it to the persons responsible for signing. The signatories are notified automatically and a legitimation flow is triggered for each.

Because of the solution’s responsive design, the entire process can be done from any device or platform. This reduces friction for signatories. For instance, they can fill in the questionnaire, take a picture of their ID on their mobile phone, and upload it automatically to the solution. The signing process itself is also optimized for mobile.

Helping you stay compliant now and in the future

As anyone in business knows, change is the only constant. The ownership of a company, for example, may change over time but you, as a financial institution, may not necessarily know this. Updating this information can be very time-consuming. With Visma Addo, you can automate workflows to update this information periodically. It’s up to you to decide how often is often enough. We are here to help you stay compliant, now and in the future.

About Lars Nygaard

Lars Lars Nygaard is Product Manager at Visma Addo. Lars has worked at Visma for over 20 years. He has a talent for simplifying processes and a passion for solving daily problems with user-friendly IT. Lars Nygaard was responsible for implementing a KYC solution at one of the largest banks in the Nordics.