KYC/KYB

Identity verification is a cornerstone of secure and compliant financial operations. At Fuze, the Know Your Customer (KYC) and Know Your Business (KYB) processes are integral to onboarding users and enabling them to transact safely and legitimately.

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Why is KYC/KYB Important?

KYC/KYB processes are mandatory for regulatory compliance, helping to prevent illicit activities such as money laundering, terrorist financing, and fraud. By verifying the identity of your users, you build a trusted environment for your financial services and meet global regulatory standards.

This process applies to your End-Customers (both individuals and businesses) who wish to use financial services. It also applies to your own organization during your initial onboarding with Fuze.

KYC/KYB Onboarding Methods with Fuze

Fuze offers flexible methods to conduct KYC/KYB, allowing you to choose the integration path that best suits your customer experience, operational model, and regulatory standing:

1. Fuze-Hosted KYC Journey (Link-Based)

This method provides a streamlined way to guide your customers through the entire KYC/KYB process.

• How it Works:
  1. Your application requests a unique KYC link from Fuze for a specific Customer.
  2. You present this secure link to your End-Customer.
  3. The End-Customer is redirected to this link by your app and is shown a Fuze hosted interface, where they will:
     • Input their required personal or business information.
     • Upload necessary identity documents (e.g., passport, national ID, business registration documents).
     • Potentially complete a liveness detection check and/or a video verification step if required.
• Benefits:
  • Rapid Integration: Minimizes development effort on your side for building KYC UIs and document handling.
  • Comprehensive Solution: Fuze and its partners manage the complexities of data collection, document validation, and advanced checks like liveness detection.
  • Always Up-to-Date: The hosted flow is kept current with the latest compliance requirements and best practices.

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  Simple & Secure Onboarding

  The link-based journey is often the quickest way to implement a robust and compliant KYC/KYB process, as Fuze handles the heavy lifting of the user interaction for verification.

2. API-Driven Data Collection with Customer Finalization (Hybrid Flow)

This method gives you more control over the initial stages of data collection while leveraging Fuze for verification and final customer consent.

• How it Works:
  1. Your application collects KYC/KYB information and document images directly from your End-Customer through your own interface.
  2. You securely transmit this collected data and the document files to Fuze via our APIs (e.g., calling the "Create Customer" API with initial data [cite: 1]).
  3. Fuze (and its partners) process the submitted information and documents for verification.
  4. To complete the process, Fuze may provide a link for the End-Customer to:
     • Review and explicitly consent to your Terms and Conditions (TnC)[cite: 1].
     • Optionally, perform a liveness check or other required verifications if not already covered.
• Benefits:
  • Customized User Experience: Allows you to maintain your brand's look and feel during the initial data gathering phase.
  • Leverage Existing KYC Data: If you have already collected KYC information and documents from your users as part of your own onboarding, you can pass this information directly to Fuze via API. This can prevent your users from having to submit their details multiple times, creating a smoother experience.
  • Pre-validation: You can perform initial checks or validations on the data before submitting it to Fuze.
  • Flexibility: Combines your UX control with Fuze's backend verification power.

3. KYC Reliance (Accredited Financial Institutions Model)

This specialized model is designed for accredited and regulated financial institutions that perform robust KYC/KYB on their customers according to standards mutually agreed upon with Fuze.

• How it Works:
  1. Your institution, having met Fuze's criteria for KYC Reliance, fully conducts the KYC/KYB on your End-Customers using your own established and compliant processes.
  2. When onboarding these customers to Fuze, you assert via an API call that the customer has met the required KYC standards. Specific data points or attestations may be required.
  3. Fuze relies on your institution's due diligence. No separate Fuze-hosted KYC journey (link) or direct document submission to Fuze by the end-customer is typically needed for these users.
• Benefits:
  • Most Seamless Onboarding: Offers the fastest and most frictionless onboarding experience for your End-Customers, as they do not need to interact with a separate KYC process for Fuze-powered services.
  • Leverages Existing Processes: Allows your institution to utilize its existing, compliant KYC infrastructure.
  • Scalability: Ideal for financial institutions onboarding customers at scale who are already subject to equivalent or higher regulatory KYC scrutiny.

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  Accelerated Onboarding for Trusted Partners

  The KYC Reliance model is built on a partnership of trust and recognized compliance standards, enabling the swiftest path to activating Fuze services for your already-verified customers. Eligibility for this model is subject to Fuze's due diligence and approval.

The Verification Process and Lifecycle

Regardless of the onboarding method chosen, once the necessary information and documents are submitted to Fuze, a "Compliance Review" process begins[cite: 1]. The following diagram illustrates the typical decision flow post-submission for standard onboarding paths:

graph TD
    A["Onboarding Initiated<br>(Data, Docs, Consent Provided)"] --> B("Fuze Compliance Review");

    B -- "Successful" --> C["Customer Approved"];
    C --> C1["'APPROVED' Webhook"];

    B -- "More Info Needed" --> D["Compliance Follow-Up"];
    D --> D1["'ACTION_REQUIRED' Webhook<br>(Further Action Required)"];
    D1 --> D3["Capture and Submit Updated Info<br>(API/Link)"];
    D3 --> B;

    B -- "Rejected (Policy)" --> E["Customer Rejected"];
    E --> E1["'REJECTED' Webhook"];

Key Stages inря Verification Lifecycle (primarily for non-Reliance flows):

• Compliance Review: Fuze, often in conjunction with specialized identity verification partners, performs a series of checks. These can include document authenticity validation, data matching, watchlist screening (sanctions, PEPs, adverse media), and biometric verification if liveness checks are involved.
• Status Updates & Webhooks: Throughout the KYC/KYB process, the user's verification status will be updated. Fuze keeps you informed of these changes (e.g., PENDING, ACTION_REQUIRED, APPROVED, REJECTED) primarily via Webhooks. This enables your application to react in real time to events like:
  • ACTION_REQUIRED: Indicates that additional information or document corrections are needed. Your system should guide the user or your operations team to address the requirements.
  • APPROVED: The user's identity has been successfully verified. They can now access services.
  • REJECTED: The user could not be verified.

Ongoing Due Diligence and KYC Refresh

KYC/KYB is not merely a one-time onboarding step. Regulatory requirements and best practices dictate ongoing attention to customer due diligence.

• Enhanced Due Diligence (EDD): For certain customers, transaction patterns, or risk profiles, Fuze may require or facilitate Enhanced Due Diligence. This involves gathering additional information or documentation beyond standard KYC.
• Consent & Policy Updates: Periodically, you may need End-Customers to re-consent to updated Terms & Conditions or other policies.
• KYC Data Refresh: Regulations often mandate that customer KYC information be periodically reviewed and updated to ensure it remains accurate and current.

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Versatile Link for Ongoing Interactions

The same secure, Fuze-hosted link mechanism used for initial onboarding (Method 1) can often be leveraged for these ongoing requirements. You can request a new link for a customer to:

• Securely upload additional documents needed for EDD.
• Review and accept new Terms and Conditions.
• Complete a full KYC data refresh process.

This provides a consistent and user-friendly experience for your customers when follow-up actions are needed.

Impact on Service Activation

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KYC/KYB is a Prerequisite

Successful completion of KYC/KYB (i.e., achieving an APPROVED or equivalent status) is typically a mandatory prerequisite before End-Customers can access most financial functionalities. This includes activating Wallets, making Transfers, Trading, or utilizing Payment services.

API Interaction (General)

The Fuze API provides endpoints to:

• Request and manage KYC links for the Fuze-hosted journey.
• Submit KYC data and documents for the API-driven hybrid flow (e.g., via the "Create Customer" API).
• Support attestations or data submissions for the KYC Reliance model.
• Retrieve the current KYC/KYB status and detailed outcomes for a user.
• Receive and process webhook notifications for status changes and required actions.

By integrating these KYC/KYB functionalities effectively, you ensure a compliant, secure, and trustworthy platform for all your users.