Can we handle KYC and onboarding ourselves?

Possibly, but first decide which responsibility you want to take on.

Collecting documents, verifying identity on a partner's behalf and becoming the regulated provider responsible for the customer relationship are different arrangements. Onboarding an app or merchant is also separate from verifying an individual end user.

A partner may agree to use checks performed by another party, but that requires an arrangement permitted by the applicable rules and accepted by the partner. For example, FINTRAC allows an agent or mandatary to perform identity verification under specified conditions, while the reporting entity remains responsible for meeting its requirements. Sending a “KYC passed” result does not, by itself, establish that arrangement. (Source: FINTRAC identity-verification guidance)

Before building the onboarding process, agree:

• Which identity-verification methods and records the partner will accept.
• Who makes the final customer or merchant approval decision.
• Who handles ongoing monitoring and requests for additional information.
• How information will be shared lawfully and made available when required.

An MSB registration does not automatically require your partners to delegate these responsibilities. Get the operating arrangement agreed first, then build the process around it.