Identity verification and AML checks are now highly sophisticated.
Ukraine conflict highlights the importance of sanctions screening.
Op-ed
FX brokers have to walk a very fine line between keeping the customer experience as frictionless as possible and complying with applicable legislation. This is even more important at the sign-up and onboarding stage, as this is the customer’s first interaction and will determine whether they choose to return.
KYC Is Key in Retail FX
As previously explained, Know Your Customer (KYC) is an important process for the retail FX industry.
It is also a vital component of the FX global code, one of whose principles states that ‘Market participants should perform KYC checks on their counterparties to ascertain that their transactions are not used to facilitate money laundering, terrorist financing, or other criminal activities’.
As a result, market participants are expected to have appropriate measures to enforce the KYC principle.
In response, brokers are automating their KYC and compliance process to match their jurisdictions and establish streamlined procedures for their compliance teams to work with.
This includes the addition of AI-driven pre-checks on traders' submitted documentation, which provides the broker with a preliminary diagnosis of the documents provided and the ability to set up the specific documentation required from their traders.
“The introduction of embedded logic in documents and features that allow for the identification of traders through the use of selfies and other easy-to-obtain criteria allow brokers to take an innovative approach to procedures that may be considered tiresome or even intimidating to end users,” says Ghandour.
Brokers Need to Modernize KYC Process
Traders are continuously informed and experienced with various brokerages throughout their trading life cycle. An outdated KYC procedure or a procedure that doesn't feel safe to end users will hurt brokers that choose to reduce costs on this aspect of their operation or postpone implementing new and updated onboarding and KYC procedures.
Features, such as automated identity and address verification, have become a staple of client onboarding. Knowing which solutions to implement suggests Remonda Kirketerp-Møller, the Founder and CEO of the client onboarding platform developer, Muinmos.
“For example, a lot of solutions state they check ‘address verification,’ but all they do is verify that the supplied address exists, not that the person who supplied it is registered as living there,” she says. “So I can say I live in 1600 Pennsylvania Avenue, Washington DC, and pass the check, even though I am not the President of the United States.”
Christina Iracleous, the CMO at FX Back Office, a developer of CRM solutions for FX brokers, notes that all her company’s clients are working with third-party KYC providers as part of their due diligence.
“Some brokers have adopted the optical character recognition (OCR) mechanism to scan and process texts,” she adds.
The sanctions imposed on individuals and entities following the Russian invasion of Ukraine in February 2022 were a reminder of the importance of sanctions screening within the customer onboarding process.
Many brokers have had to adjust their KYC procedures based on regulatory requirements, data protection laws, and target audience requirements that are constantly evolving.
Most rely on an automated screening provider integrated into their flow, either directly or via their client onboarding platform. Numerous providers in this space use similar terms but provide very different services.
“Some providers will only update their database monthly, while others won't let you determine the match rates (in other words, the ‘sensitivity’ to alerts), so you either get too few alerts or too many,” says Kirketerp-Møller. “It is therefore important not only to have an automated solution but also one that produces sound results.”
From a risk perspective, brokers need to balance the requirement for checks with the desire to make the sign-up process as smooth as possible. This is what Muinmos refers to as the ‘consumer compliance conflict,’ where clients want a simple, registration-like onboarding process.
“There are three options here,” says Kirketerp-Møller. “The first is to bother the client with a long, unintelligently designed process and lose them as a result. The second is not to comply with regulations and eventually lose your license. The third is to automate and intelligently design the process, so even though it is fully compliant, it only takes a couple of minutes from end to end.”
Unsurprisingly the third option is the preferred one, especially when regulators are tightening their supervision and clients are aware of the importance of selecting a broker that has robust regulatory processes in place.
KYC Must be Simple and Easy
Information and clarity for the end user are essential factors. Suppose the broker’s KYC procedure and onboarding steps are easy to understand, logically built in terms of user interface and user experience, and provide the client with information on why documentation is requested. In that case, it should all make sense to the trader.
“This can even create a greater sense of security that they have made the correct decision in entrusting their trading activity to this broker,” says Ghandour. “Of course, the broker should also back up these steps and requirements with the proper policies and legal documentation in an organized and easy to reach the legal section on their website or interface.”
According to Gergo Varga, the Content Manager at fraud management solution developer Seon, some FX brokers are hesitant to implement more than the minimum acceptable KYC verification process because, although they don’t want to lose their license, there is so much competition across the industry, and customers have such a low tolerance for friction, that the brokers feel it is not worth the risk.
FX brokers have to walk a very fine line between keeping the customer experience as frictionless as possible and complying with applicable legislation. This is even more important at the sign-up and onboarding stage, as this is the customer’s first interaction and will determine whether they choose to return.
KYC Is Key in Retail FX
As previously explained, Know Your Customer (KYC) is an important process for the retail FX industry.
It is also a vital component of the FX global code, one of whose principles states that ‘Market participants should perform KYC checks on their counterparties to ascertain that their transactions are not used to facilitate money laundering, terrorist financing, or other criminal activities’.
As a result, market participants are expected to have appropriate measures to enforce the KYC principle.
In response, brokers are automating their KYC and compliance process to match their jurisdictions and establish streamlined procedures for their compliance teams to work with.
This includes the addition of AI-driven pre-checks on traders' submitted documentation, which provides the broker with a preliminary diagnosis of the documents provided and the ability to set up the specific documentation required from their traders.
“The introduction of embedded logic in documents and features that allow for the identification of traders through the use of selfies and other easy-to-obtain criteria allow brokers to take an innovative approach to procedures that may be considered tiresome or even intimidating to end users,” says Ghandour.
Brokers Need to Modernize KYC Process
Traders are continuously informed and experienced with various brokerages throughout their trading life cycle. An outdated KYC procedure or a procedure that doesn't feel safe to end users will hurt brokers that choose to reduce costs on this aspect of their operation or postpone implementing new and updated onboarding and KYC procedures.
Features, such as automated identity and address verification, have become a staple of client onboarding. Knowing which solutions to implement suggests Remonda Kirketerp-Møller, the Founder and CEO of the client onboarding platform developer, Muinmos.
“For example, a lot of solutions state they check ‘address verification,’ but all they do is verify that the supplied address exists, not that the person who supplied it is registered as living there,” she says. “So I can say I live in 1600 Pennsylvania Avenue, Washington DC, and pass the check, even though I am not the President of the United States.”
Christina Iracleous, the CMO at FX Back Office, a developer of CRM solutions for FX brokers, notes that all her company’s clients are working with third-party KYC providers as part of their due diligence.
“Some brokers have adopted the optical character recognition (OCR) mechanism to scan and process texts,” she adds.
The sanctions imposed on individuals and entities following the Russian invasion of Ukraine in February 2022 were a reminder of the importance of sanctions screening within the customer onboarding process.
Many brokers have had to adjust their KYC procedures based on regulatory requirements, data protection laws, and target audience requirements that are constantly evolving.
Most rely on an automated screening provider integrated into their flow, either directly or via their client onboarding platform. Numerous providers in this space use similar terms but provide very different services.
“Some providers will only update their database monthly, while others won't let you determine the match rates (in other words, the ‘sensitivity’ to alerts), so you either get too few alerts or too many,” says Kirketerp-Møller. “It is therefore important not only to have an automated solution but also one that produces sound results.”
From a risk perspective, brokers need to balance the requirement for checks with the desire to make the sign-up process as smooth as possible. This is what Muinmos refers to as the ‘consumer compliance conflict,’ where clients want a simple, registration-like onboarding process.
“There are three options here,” says Kirketerp-Møller. “The first is to bother the client with a long, unintelligently designed process and lose them as a result. The second is not to comply with regulations and eventually lose your license. The third is to automate and intelligently design the process, so even though it is fully compliant, it only takes a couple of minutes from end to end.”
Unsurprisingly the third option is the preferred one, especially when regulators are tightening their supervision and clients are aware of the importance of selecting a broker that has robust regulatory processes in place.
KYC Must be Simple and Easy
Information and clarity for the end user are essential factors. Suppose the broker’s KYC procedure and onboarding steps are easy to understand, logically built in terms of user interface and user experience, and provide the client with information on why documentation is requested. In that case, it should all make sense to the trader.
“This can even create a greater sense of security that they have made the correct decision in entrusting their trading activity to this broker,” says Ghandour. “Of course, the broker should also back up these steps and requirements with the proper policies and legal documentation in an organized and easy to reach the legal section on their website or interface.”
According to Gergo Varga, the Content Manager at fraud management solution developer Seon, some FX brokers are hesitant to implement more than the minimum acceptable KYC verification process because, although they don’t want to lose their license, there is so much competition across the industry, and customers have such a low tolerance for friction, that the brokers feel it is not worth the risk.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Finance Magnates Annual Awards 2024 | FM Awards 2024 Highlights
Finance Magnates Annual Awards 2024 | FM Awards 2024 Highlights
Finance Magnates Annual Awards 2024 | FM Awards 2024 Highlights
Finance Magnates Annual Awards 2024 | FM Awards 2024 Highlights
Finance Magnates Annual Awards 2024 | FM Awards 2024 Highlights
Finance Magnates Annual Awards 2024 | FM Awards 2024 Highlights
🎥Catch the best moments from the Finance Magnates Annual Awards Gala Dinner!
An evening where top names in finance came together to celebrate achievements, enjoy live music, and connect over a memorable dinner. Watch the highlights and feel the energy of our first gala in Cyprus!
Congratulations to all the winners for their dedication to excellence and leadership in the financial industry, including XM, Trading PRO, FP Markets, Deriv, FxPro, LATAM, Headway, ATFX, FBS, AMEGA, EC Markets, Axi
For more information about the 1st Finance Magnates Annual Awards, visit https://bit.ly/3Zb7wNz
#FinanceMagnatesGala #IndustryExcellence #GalaHighlights #FinanceMagnatesAnnualAwards #FinanceMagnatesAwards #CelebratingSuccess #FinanceCommunity
🎥Catch the best moments from the Finance Magnates Annual Awards Gala Dinner!
An evening where top names in finance came together to celebrate achievements, enjoy live music, and connect over a memorable dinner. Watch the highlights and feel the energy of our first gala in Cyprus!
Congratulations to all the winners for their dedication to excellence and leadership in the financial industry, including XM, Trading PRO, FP Markets, Deriv, FxPro, LATAM, Headway, ATFX, FBS, AMEGA, EC Markets, Axi
For more information about the 1st Finance Magnates Annual Awards, visit https://bit.ly/3Zb7wNz
#FinanceMagnatesGala #IndustryExcellence #GalaHighlights #FinanceMagnatesAnnualAwards #FinanceMagnatesAwards #CelebratingSuccess #FinanceCommunity
🎥Catch the best moments from the Finance Magnates Annual Awards Gala Dinner!
An evening where top names in finance came together to celebrate achievements, enjoy live music, and connect over a memorable dinner. Watch the highlights and feel the energy of our first gala in Cyprus!
Congratulations to all the winners for their dedication to excellence and leadership in the financial industry, including XM, Trading PRO, FP Markets, Deriv, FxPro, LATAM, Headway, ATFX, FBS, AMEGA, EC Markets, Axi
For more information about the 1st Finance Magnates Annual Awards, visit https://bit.ly/3Zb7wNz
#FinanceMagnatesGala #IndustryExcellence #GalaHighlights #FinanceMagnatesAnnualAwards #FinanceMagnatesAwards #CelebratingSuccess #FinanceCommunity
🎥Catch the best moments from the Finance Magnates Annual Awards Gala Dinner!
An evening where top names in finance came together to celebrate achievements, enjoy live music, and connect over a memorable dinner. Watch the highlights and feel the energy of our first gala in Cyprus!
Congratulations to all the winners for their dedication to excellence and leadership in the financial industry, including XM, Trading PRO, FP Markets, Deriv, FxPro, LATAM, Headway, ATFX, FBS, AMEGA, EC Markets, Axi
For more information about the 1st Finance Magnates Annual Awards, visit https://bit.ly/3Zb7wNz
#FinanceMagnatesGala #IndustryExcellence #GalaHighlights #FinanceMagnatesAnnualAwards #FinanceMagnatesAwards #CelebratingSuccess #FinanceCommunity
🎥Catch the best moments from the Finance Magnates Annual Awards Gala Dinner!
An evening where top names in finance came together to celebrate achievements, enjoy live music, and connect over a memorable dinner. Watch the highlights and feel the energy of our first gala in Cyprus!
Congratulations to all the winners for their dedication to excellence and leadership in the financial industry, including XM, Trading PRO, FP Markets, Deriv, FxPro, LATAM, Headway, ATFX, FBS, AMEGA, EC Markets, Axi
For more information about the 1st Finance Magnates Annual Awards, visit https://bit.ly/3Zb7wNz
#FinanceMagnatesGala #IndustryExcellence #GalaHighlights #FinanceMagnatesAnnualAwards #FinanceMagnatesAwards #CelebratingSuccess #FinanceCommunity
🎥Catch the best moments from the Finance Magnates Annual Awards Gala Dinner!
An evening where top names in finance came together to celebrate achievements, enjoy live music, and connect over a memorable dinner. Watch the highlights and feel the energy of our first gala in Cyprus!
Congratulations to all the winners for their dedication to excellence and leadership in the financial industry, including XM, Trading PRO, FP Markets, Deriv, FxPro, LATAM, Headway, ATFX, FBS, AMEGA, EC Markets, Axi
For more information about the 1st Finance Magnates Annual Awards, visit https://bit.ly/3Zb7wNz
#FinanceMagnatesGala #IndustryExcellence #GalaHighlights #FinanceMagnatesAnnualAwards #FinanceMagnatesAwards #CelebratingSuccess #FinanceCommunity
FMLS:24 | Shaping the Next Era of Financial Evolution
FMLS:24 | Shaping the Next Era of Financial Evolution
FMLS:24 | Shaping the Next Era of Financial Evolution
FMLS:24 | Shaping the Next Era of Financial Evolution
FMLS:24 | Shaping the Next Era of Financial Evolution
FMLS:24 | Shaping the Next Era of Financial Evolution
Welcome to FMLS:24 – the premier event where influential brands and leaders in trading, payments, fintech, and digital assets come together!
Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
Whether you’re in finance, technology, or payments, this summit is your gateway to future growth, meaningful collaborations, and industry-leading insights.
👉 Don't miss out – secure your ticket now at https://events.financemagnates.com/ZQEYy0?utm_source=youtube&utm_campaign=fmls24-awareness&utm_medium=video&RefId=MLS%3A24+Video+Promo
#fmls #fmls24 #fmevents #financemagnates #forex #payments #crypto #events #london #fintech #ai #generativeai #technology #onlinetrading #forex #investing #investors #tech
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Welcome to FMLS:24 – the premier event where influential brands and leaders in trading, payments, fintech, and digital assets come together!
Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
Whether you’re in finance, technology, or payments, this summit is your gateway to future growth, meaningful collaborations, and industry-leading insights.
👉 Don't miss out – secure your ticket now at https://events.financemagnates.com/ZQEYy0?utm_source=youtube&utm_campaign=fmls24-awareness&utm_medium=video&RefId=MLS%3A24+Video+Promo
#fmls #fmls24 #fmevents #financemagnates #forex #payments #crypto #events #london #fintech #ai #generativeai #technology #onlinetrading #forex #investing #investors #tech
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Welcome to FMLS:24 – the premier event where influential brands and leaders in trading, payments, fintech, and digital assets come together!
Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
Whether you’re in finance, technology, or payments, this summit is your gateway to future growth, meaningful collaborations, and industry-leading insights.
👉 Don't miss out – secure your ticket now at https://events.financemagnates.com/ZQEYy0?utm_source=youtube&utm_campaign=fmls24-awareness&utm_medium=video&RefId=MLS%3A24+Video+Promo
#fmls #fmls24 #fmevents #financemagnates #forex #payments #crypto #events #london #fintech #ai #generativeai #technology #onlinetrading #forex #investing #investors #tech
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Welcome to FMLS:24 – the premier event where influential brands and leaders in trading, payments, fintech, and digital assets come together!
Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
Whether you’re in finance, technology, or payments, this summit is your gateway to future growth, meaningful collaborations, and industry-leading insights.
👉 Don't miss out – secure your ticket now at https://events.financemagnates.com/ZQEYy0?utm_source=youtube&utm_campaign=fmls24-awareness&utm_medium=video&RefId=MLS%3A24+Video+Promo
#fmls #fmls24 #fmevents #financemagnates #forex #payments #crypto #events #london #fintech #ai #generativeai #technology #onlinetrading #forex #investing #investors #tech
📣 Stay updated with the latest in finance and trading!
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Welcome to FMLS:24 – the premier event where influential brands and leaders in trading, payments, fintech, and digital assets come together!
Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
Whether you’re in finance, technology, or payments, this summit is your gateway to future growth, meaningful collaborations, and industry-leading insights.
👉 Don't miss out – secure your ticket now at https://events.financemagnates.com/ZQEYy0?utm_source=youtube&utm_campaign=fmls24-awareness&utm_medium=video&RefId=MLS%3A24+Video+Promo
#fmls #fmls24 #fmevents #financemagnates #forex #payments #crypto #events #london #fintech #ai #generativeai #technology #onlinetrading #forex #investing #investors #tech
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Welcome to FMLS:24 – the premier event where influential brands and leaders in trading, payments, fintech, and digital assets come together!
Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
Whether you’re in finance, technology, or payments, this summit is your gateway to future growth, meaningful collaborations, and industry-leading insights.
👉 Don't miss out – secure your ticket now at https://events.financemagnates.com/ZQEYy0?utm_source=youtube&utm_campaign=fmls24-awareness&utm_medium=video&RefId=MLS%3A24+Video+Promo
#fmls #fmls24 #fmevents #financemagnates #forex #payments #crypto #events #london #fintech #ai #generativeai #technology #onlinetrading #forex #investing #investors #tech
📣 Stay updated with the latest in finance and trading!
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