When clients observe the military procedure of identifying their personnel, they will notice that the system is simple because they only require their full name, army rank, and the specific serial number assigned to them. However, the same simple process cant use in the corporate sector for customer identification. Due to a high number of scams, financial institutions should practice strict rules and regulations given by higher regulatory powers. It is important while onboarding clients.
Define Know Your Customer (KYC)
KYC is a term use in the banking industry and it signals the customer’s ID certification. It is an important process in order to do business with them. The process completes before banks provide the client with any kind of their services.
The KYC authentication process is absolutely necessary to deal with financially illicit activities. For example, money laundering, financial terrorism, and different kinds of corruption. The process also helps in monitoring the customer’s behavior so that any suspicious activity catches in a timely manner. Besides the legal point of view, executing KYC facilitates organizations in protecting themselves against fraud and hacking attempts.
How is the E-KYC Solution Advantageous?
Know Your Customer (KYC) system supports banks in making sure that the identity details provided by onboarding customers are genuine. It is a critical step so that the financial properties of the real customers can be protected and illicit behaviors can be minimized. Sometimes, it happens that fraudsters steal the identity of genuine clients and hide behind it for a long time, the KYC system is efficient even in detecting such deceiving behavior.
Organizations complying with KYC regulations know that the process has been there for a number of years and all of their clients have to abide by the given mandates. Clients should know that they cannot open their bank accounts (or use services) without agreeing to the compliance terms.
There is also the problem that some banks still use manual working systems. It means that there is a higher chance of mistakes, low productivity, and more time required to work. Errors in such cases can result in big financial losses for the company. Hence, banking institutions should use a better strategy for error-free KYC verification.
Is There any Better and more Advanced Process?
To upgrade the KYC authentication process, financial organizations should opt for an online or digital platform that will decrease the usage of time and human effort involved in the process. When clients look at the automation process, they will notice that the system will reduce the usage of company resources and boost efficiency with accuracy. The AI and the machine-learning-based system will do the work in a matter of seconds rather than many hours.
The use of automatic systems by businesses while onboarding customers can establish trust and confidence in the organization (positive customer experience). On the other hand, the manual process can result in a negative customer experience that can demotivate clients from coming back.
Furthermore, the online KYC system is much more than an identity authentication process. It is because it can help create a risk-based profile of the onboarding clients. In this way, companies and banks can perform screening at regular intervals to detect suspicious activities timely and resolve the issue as quickly as possible. Due to advancements in technology and the spread of globalization, the live onboarding and certification processes considered basic level requirements.
What is the Online E-KYC Onboarding Authentication Process?
In the manual process, the customer is required to fill out lengthy forms and submit supporting documents which is a lot of unnecessary paperwork for the company. The ease and quickness of the online KYC system are that it only requires the photo of an authorized ID from the client.
The use of OCR technology quickly captures the required data from the given documents. It also feeds it into the system. The data is then sent to complex AI algorithms and modules of machine learning to deeply process it and even use it to make relevant predictions.
Which Type Of Documents Are Needed For The Certification Process?
The required documents for authentication are different in every country and for every purpose. For customer identification and authorization, the following kind of documents are acceptable:
- Government generated picture based ID
- Passport
- Driving license
- Credit cards
It is important that companies receive original documents for authentication. Therefore, the artificial intelligence system inspects the documents for originality.
Concluding Remarks
To sum up, the online KYC authentication system is significant for financial institutes and the banking industry. This kind of verification process is critical to discourage hackers and scammers. Finally, the verification process has the potential to increase protection, enhance accuracy, and boost a positive experience for customers.
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