24.06.2024Insight

Navigating Local KYC Compliance: A Guide for EU Fintechs

Local KYC compliance is a common stumbling block for fintechs looking to expand across the EU. Overcoming it requires not only regulatory expertise but a detailed understanding of each market’s cultural specifics as well. Fourthline’s got you covered with both.

Fourthline Forrester TEI thumbnailBy The Fourthline Team
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For fintechs, EU market expansion isn’t just a matter of scaling up technology or attracting new customers. It involves navigating an intricate web of market-specific interpretations of broad EU-level Know-Your-Customer (KYC) and Anti-Money Laundering (AML) regulations.

As well as regulatory specifics, European countries also have cultural differences. To overcome them, companies should prioritize glocalization, in which you adapt global products to local markets. This will ensure you resonate with local regulatory requirements, cultures, and preferences. In Europe, these can vary as much as language. For example, did you know that:

  • In the Netherlands, the scanning of the NFC chip within the ID documents is a widely adopted onboarding procedure;

  • In Italy, a significant portion of the population still uses paper ID documents for verification, and companies have to handle both - paper and digital IDs;

  • In Germany and Austria, live video conversation with an agent remains a common verification method during client onboarding, although simpler alternatives exist;

  • France is among the most highly regulated markets where clients are used to stricter onboarding processes than other countries.