Digital KYC Process Providing a Backbone for Identity Verification

Digital KYC Process Providing a Backbone for Identity Verification
Know your Customer (KYC) is an important process especially for financial institutes globally to comply with regulatory requirements. Credit card frauds, online scams, terrorist funding, money laundering, and data breaches of many kinds have turned many businesses to ashes. 

To filter the customer base for fraudsters, criminals, and terrorists businesses are now using identity verification solutions to meet KYC regulations. To filter out fraudsters and high-risk customers digital identity verification solutions play a vital role. In this article we'll discuss the importance of KYC and how it can make businesses a step ahead of fraudsters. 

How does KYC keep businesses a step ahead?

KYC Compliance for identity verification helps businesses many ways to fight back fraud. Following are the ways KYC is assisting businesses:

To comply with AML (Anti Money Laundering) compliances:

Money laundering is a big issue and from hindering your business to be a platform for fraudsters to launder money, digital KYC solutions help to identify scammers right at the base. It helps to highlight high-risk customers who can indulge in any such criminal activity using your business so KYC solutions identify the scammers.

To detect thieves identity:

Identity theft is the most common type of fraud. It has many types such as synthetic identity theft, children identity theft, medical identity theft, and financial identity theft. Such types of theft targets individuals' financial statements and accounts are known as financial identity theft. Digital KYC solutions provide a stringent way to capture such frauds for a business.    

To mitigate the risk of credit card fraud:

Credit card frauds are clamping up with every passing year. Identity verification solutions can help to mitigate these frauds drastically. 

To mitigate the risk of financial loss due to identity thieves:

Identity theft results in businesses to lose millions due to resulting fraud. So digital KYC can help businesses save money instead of losing it due to fraudulent activities.  

To identify cyber criminals:

As already mentioned, money laundering is used for terrorist funding and KYC and AML Solutions  are used in Combating Financing of Terrorists (CFT). It identifies fraudsters and criminals. 

To verify the identities of businesses they trade within the B2B model:

After KYC, KYB regulations are also important to follow. It is mandatory to know the businesses you are about to deal with. Document verification ensures it is not a shell company. So KYB ensures that the business is authentic to deal with. 

From the KYC manual to eKYC

Due to the rapid pace of regulatory change the challenges related to KYC are increasing. The regulatory authorities have introduced stringent requirements for customer due diligence. Performing identity verification of customers is really very important and can be done by using technologies like facial recognition technology and other biometrics. 

The pandemic has affected businesses in many ways. Even the prevailing situation does not change the regulatory requirements for any business. 

• By deploying eKYC, businesses can verify their customers online without any hassle. 

• By digital document verification using OCR technology and KYC video practices, customer identity verification can be ensured in real-time. 

Businesses can continue with their operations seamlessly by verifying the customer information through the uploaded document or through the video call in which a KYC expert of a business connects the customer on a video call and conducts the process of customer verification. So the digital KYC process is the way to go for identity verification of customers.