Increasingly, financial institutions are required to vet every client that goes through their system. One of the key ways to stay competitive on the world stage is by ensuring your company has appropriate security measures in place. This includes knowing the flow of money and who you’re doing business with.
This is known as Know Your Customer (KYC) and Know Your Business (KYB).
The KYC process is essential for preventing fraud and catching criminals. For this reason, some personal information, like social security numbers (SSN), may be required to make it easier for people who use the sign-up process. Verifying these numbers can be done with an SSN API.
But how do you find the right SSN API?
Here’s a look at what SSN APIs are and how you can use them.
What is an SSN API?
SSN verification APIs are a type of third-party application that allows businesses to verify the social security verification and identity of a user.
In the United States, it is a requirement to verify the identity of a user who wants to send money through the Automated Clearing House (ACH) or connect with financial institutions to access and send money in other ways. Therefore, fintech has to collect identity information to allow users to use their app securely and to minimize fraud.
The SSN API or ID verification API is critical in any fintech app. In fintech, we connect a data source to an API aggregator via API connections that can make an individual (simple or complex) API request through a single endpoint. Luckily, with the technology we have on hand, collecting sensitive personal data can be done so securely with an API and with a payments infrastructure like Sila. APIs use a public and private API key so this transaction of sensitive data is kept secure from outside sources.
Depending on the features of your fintech app, you could also accept information other than simply a social security number (SSN).
Is SSN Verification Required?
When running a fintech operation, you need to perform identity verification for anti-money laundering (AML) compliance. In the United States, Know Your Client or Know Your Customer is a part of AML compliance under the Patriot Act and the Bank Secrecy Act as a way to reduce risk.
KYC checks are becoming increasingly strict about keeping operations in check. KYC provides many benefits to both the financial institution and its clients. It also helps to improve clients’ trust, which results in improved business.
SSN Verification APIs can be used when you need to verify a user’s identity or when you want to collect some data from users without having them sign up for your website. An example of this would be if you wanted to collect data on the demographics of people who live in different states without requiring them to sign up for your website.
Institutions are continuously working to keep the U.S. financial banking system secure by creating onboarding and vetting strategies for their clients to avoid fraud and identify suspicious activities. KYC and KYB cover the process of your company getting to know the types of products they sell.
How to Use a Third-Party SSN Verification API in Your Business
A third-party SSN verification API is software that fintech companies can use to verify a person’s social security number (SSN). It can help you with everything from verifying customer identity to employee identity.
Identity Verification is necessary, but KYC procedures on the backend are cumbersome. Security protocols, including ongoing monitoring, policies for risk management, customer acceptance policies, and reporting to the Financial Crimes Enforcement Network (FinCEN), are in effect for your business.
Fintech apps improve your banking system and security by following these basic guidelines. Additionally, the Securities and Exchange Commission requires people to identify potential firms or individuals before doing business with them to make more informed decisions. It’s best always to ensure that your information is accurate, filed adequately, and timely. This makes you more likely to avoid penalties, but it helps keep your company’s accounting in check.
Some businesses use third-party validation APIs to verify the authenticity of their customers and employees by providing them with a report that shows whether or not the service provider has validated them. The benefits of using these APIs are apparent – it saves time and money on manual processes while providing an increased level of protection.
Do I Need an SSN Verification API for my Fintech App?
Yes, you need an SSN verification API for your fintech app. And, with fintech operations becoming more prevalent, you need to stay ahead of the curve by getting smart SSN verification technology so that you efficiently adhere to anti-money laundering (AML) regulations.
KYC is a process developed to verify the identity of parties involved in financial transactions. It can be extensive and time-consuming, but it’s necessary for today with the push for on-demand services. The process helps to include ongoing monitoring, policies for risk management, customer acceptance policies, and reporting, including suspicious activity reports, to the FinCEN.
Fintech apps have created guidelines to improve the financial banking system and prevent financial crimes like money laundering and identity theft. Despite this, some new clients might not be aware of this requirement and are unsure about how to proceed; they are still required to maintain and report information in this way.
SSN Verification API for my Fintech App
Although many payment apps will need an identity verification API, such as KYC and KYB, many fintech app creators do not have the time or technical knowledge to create API code.
The verification process and ongoing monitoring can take time and money. You can also use such services as an in-house intermediary if you’re not sure who your target audience is. For most fintech enabled by an app aggregator and bank agent, this can lower cost and compliance.
Sila is an innovative micro-finance platform that allows each client to access funding and asset management by using a bank account, credit card, ACH transfer, and smart contract APIs. Sila’s APIs includes a range of services that allow your client to maximize their business potential. You are in control and can always add more features to it.
KYB is a universal security measure many businesses offer to verify their customers’ identities. The KYB verification process has been updated to be discreet and easier to use. This means that you don’t have to give up your privacy or compromise its integrity.
Start Using an SSN Verification API Today to Supercharge Your Productivity & Creativity
SSN verification APIs can help supercharge your productivity and creativity when done right. The article outlines the specific steps needed to do this effectively.
It’s easy to break the rules when it comes to compliance in new and exciting industries like Fintech—even though it can be costly, partnering with Sila can help provide a level of security for your company.
Sila offers multiple money transfer APIs to its users. Some of the features provided are KYC and SSN verification, bank account linking, and ACH API. Sila also connects with clients to their ever-expanding list of fintech partners in their fintech marketplace to always gain access to competitive financial features when they’re ready.
The benefits of using Sila go beyond just the SSN verification API, which is embedded. The included regulatory compliance features help make the software more valuable and efficient for many different users worldwide.
KYC has become more complex with regulations over the last few years. App owners are busy creating their businesses and exploring their creativity. KYC and regulatory compliance are often a challenge for business owners. This can be incredibly demanding when trying to both comply with the laws in the U.S. and do so affordably—things that have made offering your customers an increasing number of choices much more difficult. Sila’s Sandbox can help solve this pesky problem! Reach out today.