Know your customer (KYC) is a commonly known term in edges and financial institutions and refers to the procedure of customer identity verification when involving organizations with them. Digital payment service providers, edges, or financial institutions are required by financial institutions norms to have clients know your customer procedure completed before allowing them to fulfill access to all sets.
Know your customer verification procedure is deemed vital to reduce illegitimate activities such as money laundering, corruption, or bribery. It aids authorities and organizations to keep track of client activities and detect criminals beforehand. except a authentic perspective, performing know your customer also aids organizations to keep criminals out of their systems.
Why is Know your Customer (KYC) important?
Know your customer aids bankers to make sure the app and other identity delegations provided by the users are original. Owing to instances like money laundering and drawing off money from bank accounts, verifying the identity of a client is vital to prevent fraud.
Know your customer has been in use for many years now and all clients have to obey and know your customer regulations. Without know your customer compliance, it is not possible to open a bank account.
consequently, financial institutions have been practicing manual know your customer, which requires a lot of human verification in addition since the risk of human errors is always present. Undesired errors in such processes could rule to great monetary loss to the organizations. Financial institutions such as edges have to adopt a better approach to know your customer verification.
By curious about automotive systems, organizations can onboard and obtain clients too in real-time. The boring course of action of manual onboarding sometimes results in losing authentic clients or customers.
To increase the know your customer verification course of action, the banking sector should use a digitized system that could diminish the time required for authentication and manual work. Based on the principles of digitization, digital know your customer can diminish cost and human error while increasing accuracy. The manual labor that could take hours and already days can be reduced to seconds by using artificial intelligence-based verification solutions.
Digital KYC Verification course of action
While manual labor demands the user to fill out enrollment forms and attach documents, the digital know your customer just requires the client to upload a picture of an authentic ID.
The data from the document is automatically extracted using OCR technology.
The extracted data is sent to an AI-powered system, which gathers the information and authenticates if the data is correct or not. Artificial intelligence and human verification to further enhance the accuracy and deliver correct results.
Which knows your customer documents are accepted?
The documents obligatory for verification vary, depending on the requirements of a country consequently some general documents are permissible in almost every nation.
The data that most nations and obligatory authorities require the authentication is:
- First and last name
- Identification number
- Document number
- Date of birth
- Image of the client
- Document issue
- Expiry date
To authenticate that the uploaded document is genuine and contains the specific data, an artificial intelligence document verification system checks for the originality of the document in addition.
Summing this up:
To conclude this, the know your customer procedure is vital for financial institutions and edges and using digital verification to know your customer is vital to deter frauds and thefts. Furthermore, it will enhance security, ensure safety, and most importantly increase user experience.