The Global Know Your Customer Software Market size is expected to reach $9.5 billion by 2028, rising at a market growth of 19.7% CAGR during the forecast period.
A Know Your Customer software is a program that assists in implementing KYC. Know Your Customer or KYC refers to the procedure through which a company verifies the identification of its clients. Organizations like banks, financial institutions, and other institutions and workplaces employ KYC as a method of authentication. A KYC process includes a few characteristics in order to be considered standard. Policy on customer acceptance, techniques for customer identification, management of risk, and monitoring unusual activity in consumer transactions are some of the most important functions that KYC software performs.
Any business relationship with a financial institution, bank, and company handling sensitive information, international vendor, customer, or supplier is required to go through the KYC procedure. In addition, it is crucial for organizations to conduct KYC during the contract signing and onboarding and on an ongoing basis. This is needed in order to prevent affiliation with business partners who are engaged in non-compliance with regulations and rules and financial crimes.
KYC is a part of customer due diligence (CDD) and it engages in confirming customers' identities. In order to detect ownership connections, collusion in anti-money laundering (AML), and connections between organizations, KYC procedures are implemented to evaluate personal and company records. The process identifies any negative hits, such as watch lists, sanctions lists, and politically exposed persons (PEPs) lists associated with the person. Minimum criteria for CDD, risk, and compliance assessments have been created to help combat money laundering, financial crime, terrorist financing, and other illicit activities.
KYC is an essential part of the compliance management system (CMS). The system defines the extent of compliance checks and regulatory risk needed to be considered depending on the anticipated level of risk. Additionally, transactions are reviewed for any potential odd activity. The determination of the source and location of funds is consequently a primary goal of Know-Your-Business-Partner due diligence.
A significant trend of the pandemic was the desire for flexible workforces, which intensified even after the outbreak subdued. Businesses outsourced contingent workers on a project-by-project basis to save operating expenses. The number of compensation claims, loan approvals, mortgage holiday requests, and other state claims and rules that must be vetted, processed, and distributed by individuals in compliance increased. As a result, for many companies’ completion of KYC became a critical provision.
Most of the know your customer software significantly helps in countering the high abandonment rates that are usually seen in the manual know your customer systems. The time-consuming process of carrying document copies for the KYC process to go through successfully renders customers to abandon the process, and some may not even consider it. The rising adoption of KYC software has eventually increased the range of KYCs being done in many companies and institutions. KYC software enables businesses to deduct the time requirements of a single KYC from days to minutes.
The automated onboarding of KYC through the software assists in verifying individuals and their documents remotely. This can be done either through visual identity verification software or by searching international databases. This simplifies the inclusion of checking against sanctions registers and PEPs, in addition to enabling the due diligence of directors or beneficial owners for harmful political and media exposure. Consequently, this establishes compliance with governmental bodies for EDD/CDD and AML and allows quick production of audit trails.
The failure of digital infrastructure and the high probability of data breaches pose a significant danger to the implementation of KYC. In addition, the increasing instances of personal information misuse deter many customers from opting for KYC. Furthermore, the nonexistence of document standardization among the various banks, fintech, and financial institutions raises the complexity of the KYC process to some extent. It has been found on many occasions that different companies from the same industry demand different sets of documents for KYC. This is especially true in cases where a company operates in many jurisdictions.
Based on component, the know your customer software market is categorized into software and services. The services segment procured a considerable growth rate in the know your customer software market in 2021. One of the main drivers of the segment's growth is the capacity of KYC software services to assist financial institutions and banks in enhancing operational effectiveness.
Based on deployment, the know your customer software market is classified into on-premise and cloud. The on-premise segment witnessed a considerable growth rate in the know your customer software market in 2021. Financial organizations can more readily validate consumer data on-site with the use of on-premise technologies. One important aspect influencing the category is the on-premise KYC software's capacity to validate and store customer data on the premises of the firms.
On the basis of enterprise size, the know your customer software market is fragmented into large enterprises and small & medium enterprises. The small and medium enterprises (SME) segment garnered a remarkable growth rate in the know your customer software market in 2021. To give customers a better experience, small and medium-sized businesses are increasingly digitizing their services. Companies from all over the world are establishing a KYC design team to aid small and medium-sized banks in streamlining their KYC procedure.
Based on end-use, the know your customer software market is segmented into BFSI, telecom, government, and others. The BFSI segment procured the highest revenue share in the know your customer software market in 2021. Increased online payment activity through various financial institutions and banks throughout the world is responsible for segment growth. To increase their market share, banks and other financial institutions are using a wide range of cutting-edge technology, including cloud computing and artificial intelligence.
| Report Attribute | Details |
|---|---|
| Market size value in 2021 | USD 2.7 Billion |
| Market size forecast in 2028 | USD 9.5 Billion |
| Base Year | 2021 |
| Historical Period | 2018 to 2020 |
| Forecast Period | 2022 to 2028 |
| Revenue Growth Rate | CAGR of 19.7% from 2022 to 2028 |
| Number of Pages | 231 |
| Number of Tables | 423 |
| Report coverage | Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Companies Strategic Developments, Company Profiling |
| Segments covered | Component, Deployment, Enterprise Size, End-use, Region |
| Country scope | US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria |
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| Restraints |
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On the basis of region, the know your customer software market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The North America segment recorded the highest revenue share in the know your customer software market in 2021. Major market participants' presence is a key element in promoting regional growth. Banks, retailers, and other financial organizations should see an increase in demand for new solutions due to the expanding preference for digitization.
Free Valuable Insights: Global Know Your Customer Software Market size to reach USD 9.5 Billion by 2028
The major strategies followed by the market participants are Product Launches. Based on the Analysis presented in the Cardinal matrix; Experian PLC and RELX PLC (LexisNexis Risk Solutions, Inc.) are the forerunners in the Know Your Customer Software Market. Companies such as Fenergo, Trulioo, Inc. and Acuant, Inc. are some of the key innovators in Know Your Customer Software Market.
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Pegasystems, Inc., Experian PLC, RELX PLC (LexisNexis Risk Solutions, Inc.), Fenergo, Truth Technologies, Inc., Equiniti Group plc (Siris Capital Group LLC), ACTICO GmbH, Trulioo, Inc. and Acuant, Inc.
By Component
By Deployment
By Enterprise Size
By End-use
By Geography
The global Know Your Customer Software Market size is expected to reach $9.5 billion by 2028.
Streamlining and quickening of the KYC process are driving the market in coming years, however, Lack of consistency in the required type of document restraints the growth of the market.
Pegasystems, Inc., Experian PLC, RELX PLC (LexisNexis Risk Solutions, Inc.), Fenergo, Truth Technologies, Inc., Equiniti Group plc (Siris Capital Group LLC), ACTICO GmbH, Trulioo, Inc. and Acuant, Inc.
The Large Enterprises market is generating high revenue in the Global Know Your Customer Software Market by Enterprise Size in 2021; thereby, achieving a market value of $5.7 billion by 2028.
The Software market is leading the segment in the Global Know Your Customer Software Market by Component in 2021; thereby, achieving a market value of $7.4 billion by 2028.
The North America market dominated the Global Know Your Customer Software Market by Region in 2021; thereby, achieving a market value of $3.2 billion by 2028.
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