Best KYC Software to Automate KYC and Speed Up Customer Onboarding   

Customer onboarding has changed a lot. Long sign-up forms and manual ID checks aren’t cutting it anymore. People expect things to be fast, digital, and safe. If you’re stuck using old methods, you’re probably losing good customers before they even get through the door. Automating your KYC process using the best KYC software is one of the best ways to speed up onboarding, reduce friction, and stay compliant with identity verification rules. Whether you’re in banking, finance, insurance, finTech, or even real estate, getting this right matters.

So, how do you upgrade without adding risk? Let’s walk through what automated KYC looks like today, how recent rules have made it easier, and the tools businesses are using to stay ahead.

What Is KYC and Why Automate It?   

KYC stands for Know Your Customer. It’s a process that businesses use to verify the identity of their customers and meet compliance requirements. This helps prevent fraud, money laundering, and fake accounts.

Traditionally, it meant collecting photocopies of documents, checking them manually, and filing them away. That worked 10 years ago. Today, it slows everything down and puts your company at risk of human error.

Automating KYC helps you:

• Shorten onboarding time
• Reduce manual workload
• Improve data accuracy
• Meet compliance standards

Why Manual KYC Slows You Down  

Paper-based checks take time. Someone has to review each document, compare photos, verify information, and store it properly. Even if you do it online, asking people to upload IDs and selfies slows them down. Some drop off before they finish. Others hesitate to share personal information through a web form.

And let’s not ignore the cost. Teams spend hours reviewing sign-ups. Delays pile up. Mistakes lead to re-verifications. If your business scales, the cost only grows.

Fraud is also harder to catch manually. Advanced fraudsters now use fake documents that look real enough to fool the human eye. A digital KYC solution can scan, detect, and log those red flags automatically.

Regulation Just Got Easier for Digital KYC  

Big news dropped in June 2025. FinCEN and major banking regulators (OCC, FDIC, and NCUA) now allow banks to collect Social Security Numbers (SSNs) and Tax IDs from third-party data providers instead of getting them directly from the customer.

This is huge. Until now, banks and other institutions still ask customers to enter their full SSN, which slowed things down and scared off some users. Now, if you use a trusted data source and follow the CIP Rule, you can get that data yourself.

This shift makes onboarding faster, especially for digital-first businesses. You stay compliant and reduce the friction that usually comes with KYC verification.

This update also helps businesses:

• Get SSNs securely from verified sources
• Skip asking customers for full SSNs online
• Avoid errors from typos or missing digits

But for you to do this, you need a reliable KYC software solution to pull it off.

What Is KYC Software?   

KYC software is a tool that automates the process of verifying customer identity. It checks names, addresses, date of birth, and SSNs against trusted data sources. Good software lets you build a digital onboarding process that works in real time.

You can plug KYC software into your website, CRM, or customer portal. Once a user signs up, it runs a thorough cross-verification check to confirm their identity. Some tools use images. Others use data. The best ones use both.

But not all tools are the same. Let’s compare the two types.

Facial Recognition vs Data Verification KYC Tools   

Option 1:  Facial Recognition Verification

These tools ask customers to scan an ID and take a selfie. The system checks for tampering and matches the photo to the document.

Pros:

• Easy to set up
• Good for mobile apps
• Looks sleek

Cons:

• Can be tricked with deepfakes
• Doesn’t verify if the data is real
• Doesn’t catch synthetic identities

Facial recognition tools are often used for first-step screening. They are fast and can validate if someone is holding a real ID card and is physically present. But that only scratches the surface. These tools don’t confirm if the identity belongs to a real, traceable person.

When AI gets tricked, there’s little backup for manual verification. Plus, relying only on visual checks misses out on deeper fraud indicators found in actual records.

Option 2: Data Verification Using People Search API 

This type of identity verification using a People Search API skips the image and uses real-world data. It checks if the name, SSN, date of birth, phone numbers, emails, and address actually exist in public and private records and matches the information provided by the prospective customer.

Pros:

• Pulls from verified databases
• Flags fake or deceased records
• Works even without an image

Cons:

• Requires valid input data (name, SSN, etc.)

This approach goes beyond surface checks. Instead of relying on how a document looks, it asks: Does this person exist in official records? If not, that’s a red flag.

People Search API is used in banking, credit, insurance, eCommerce, and other high-trust environments because it provides actual data points tied to real identities. It also keeps a record of the verification, which is useful for audit logs or follow-up reviews.

What Makes People Search API the Best KYC Tool?   

The People Search API by Searchbug is one of the best KYC software tools for businesses that need fast and verified onboarding. Here’s why:

1. Real-Time Checks: It runs a live check of the customer’s identity using trusted data. No waiting.
2. Verified Sources: It doesn’t pull from search engines or user-generated content. It uses trusted public and private data sources used by banking and legal industries.
3. Retrieve SSN Data with Restricted Access: If your account is approved for access, you can obtain full SSNs from name and address or verify SSNs.
4. Risk Flags: It shows if the person is deceased or if the data that the customer provided doesn’t match. This helps you catch red flags early.
5. Ease of Integration: The API is built to plug into most systems easily. Whether you’re using a CRM, a form tool, or a custom web app, it’s designed to work without a full rebuild.
6. Works for B2B and B2C: You can use it to vet individual customers, contractors, or even small business clients. It scales across industries and use cases.

New Rule: SSNs from Third Parties Now Accepted   

Just like what we mentioned above, if you’re regulated under OCC, FDIC, or NCUA, the June 2025 order now lets you use third-party data sources to collect SSNs to verify identity of customers. This applies if:

• You retrieve the SSN before opening the account
• Your method aligns with your internal risk policy
• You still meet the Customer Identification Program (CIP) Rule

This means:

• Fewer drop-offs during onboarding
• No need to store paper files
• Easier online onboarding with stronger KYC compliance

Tools like People Search API meet these requirements because they pull from regulated data sources and provide audit logs.

Regulators understand that forcing people to enter full SSNs during onboarding leads to friction. Customers abandon forms. Some don’t trust giving away sensitive information online. With this update, you’re allowed to handle it on their behalf—securely and faster. Just make sure your policies reflect this process and keep a record of all lookups.

How to Automate KYC in Your Workflow   

You don’t need to rebuild your systems. Start with one point in your onboarding process and scale from there. Here’s how you can automate your KYC using Searchbug’s People Search API.

Step 1: Pick a Use Case 

Start with a high-value touchpoint, like account sign-up, loan application, or periodic account assessment.

You can also test KYC automation in areas where there’s higher fraud risk or tighter regulations. That might be business loan applications, new investment accounts, or partner registrations. The goal is to find where identity checks take the most time or cause delays.

Step 2: Collect Basic Info 

Ask for name, date of birth, and address. Add SSN if your policy allows.

If you want to avoid friction, collect only the data you need to run a check. People Search API works with just a name and address. If your use case allows it, adding SSN gives you better accuracy and stronger matches.

Step 3: Use a Sandbox Account 

Before integrating an identity verification tool such as People Search API, make sure you test it first to ensure it fits your workflow and technology. Searchbug offers free API testing with $10 in test credits. You can test live data to ensure the data accuracy and quality without any commitment or upfront costs.

This lets your team preview how the KYC tool performs using real but non-sensitive data. It’s a risk-free way to try different input combinations and check error handling before pushing changes into production.

Step 4: Review Matches 

Check how many records are returned. If the data doesn’t match, flag it for review.

You’ll see address history, aliases, where the person lived, if the person is deceased, or if the data they provided doesn’t match official records. This is useful not just for compliance but also for risk scoring and fraud checks.

Step 5: Set Up Triggers 

Automate approvals for clean records. Send alerts when something needs review.

Most companies build auto-approval for cases where all data lines up with verified records. For mismatches or missing fields, flag the case for manual review. That way, your team only reviews what needs attention.

Step 6: Keep Track of API Calls 

If you need to pull records, whether a customer’s name was verified using People Search, you just need to go to your dashboard to see your API stats.

Searchbug doesn’t store sensitive ID files or personal documents, only the data you sent in the query is logged for your review and tracking. This can cover you during audits.

Step 7: Train Your Team   

Support staff should know how to perform searches, review failed checks, and handle common errors.

Train your team on how to run searches and interpret data provided by the API. For your internal team, you may also build simple scripts to explain what to do when identity can’t be confirmed. Maybe ask the user to re-enter their info or offer a fallback form. Or use another identity verification API, such as SSN and Name Match, SSN Validation, or Background Check API, to cover all angles. You should build a system that avoids confusion.

This process helps you stay nimble and efficient. Your KYC software does all the heavy lifting.

When to Use the SSN and Name Match API   

In some cases, you already have the SSN. Maybe the customer gave it to you, or maybe you’re pulling it from another form.

The SSN and Name Match API lets you confirm that the number is valid and matches the name. This avoids:

• Mismatched data
• Fake SSNs
• Manual re-checks

This API is perfect for quick identity verification. It confirms that the SSN provided matches a real person in real-time. You also have the option of using the last 4-digits of the SSN or the full 9-digit SSN.

Less Paperwork. More Conversions.   

Customers don’t want to print documents or share full SSNs. And your team doesn’t want to chase paperwork. Automating your KYC process helps both sides.

When users can be verified using data they’ve already entered, the experience feels smooth. You remove friction. You reduce risk. And you onboard more people, faster.

Regulators support it too. The June 2025 update of FinCEN proves that digital identity checks are not only allowed but expected.

Try It Before You Commit   

You don’t have to guess if this works. Searchbug offers a free API test account. You get $10 in credits and can apply for a Restricted Access Add-on to access restricted data like SSNs and Driver’s license info.

This is your chance to see how automated KYC actually works—no pressure, no commitment.

Final Thoughts   

Old KYC workflows don’t scale. They frustrate customers and waste team time. With better KYC software and clearer compliance rules, there’s no reason to stay stuck.

If you need to verify identities fast, check SSNs from secure sources, and meet KYC compliance standards, automation is the way forward.

Start with Searchbug’s People Search API or SSN and Name Match API. Test the process. See how much smoother your onboarding becomes.

If you’re ready to skip the guesswork, register for a FREE API sandbox account today.