Know Your Customer is not a new process. Banks and other businesses have been using this for decades. But just like everything else, with technology, this process has also been changed.
The traditional process of KYC services is no longer effective in the modern world. It was time-consuming and can put a bad image in your customer’s mind. Knowing your customer might lead to losing your customer. There was also a huge cost related to manually verifying each individual.
Now technology has made our life much easier. Things that required days or months can be performed within minutes. And just like that artificial intelligence has allowed businesses to verify customers in just a matter of time.
Know Your Customer
While onboarding a customer, businesses are required to verify their end customer. The process includes verifying individual documents to make sure if the customer is authentic or dangerous for the business.
Frauds and scams are huge threats to businesses, regulators, and customers as well. Fraudsters are getting smart with time and can manipulate the human eye. However, machine learning systems are getting smart too, and easily identify false documents in no time.
The most common KYC procedures used by the companies are
- Document Verification
Many businesses like banks, financial institutes, government institutes, and others use document verification to identify individuals. The types of documents required depend on the nature of the business. The most common documents that are being asked are ID cards, passports, driver’s licenses, debit/credit cards, utility bills, and some other personal documentation.
It is important for businesses to identify their end-users to protect themself from frauds and scams. If we take an example of a bank, it requires document verification to identify if the individual is authentic. Banks are required to collect ID cards, previous credit/debit card information, utility bills, etc. These pieces of information give an idea about the identity of the person and his financial records.
After collecting these documents, a business runs them through an artificial intelligence coding system. The AI-based document verification programs take every factor into consideration while checking the documents. It scans the document and uploads the file to verify the identity of the person. It runs the collected information through an available database to verify its authentication. The process can take 30 to 60 seconds.
Face verification technology is not uncommon to us now. Cell phones provide this technology to their customers so that they can protect their data. The widespread use of this technology is useful in many areas.
The face Verification process is done by using facial recognition software. The software take picture of the face from multiple angles and stores them in the database. When a picture is presented to the system for verification it matches the information with the data stored in the database.
In comparison to document verification, face verification is much simpler. It only requires the end-user to show his/her face on the web digital camera. It also verifies facial characteristics through a face image. This technology is only being used by high-risk firms to protect themself from fraud. But it does not give much information like document verification which is why many firms are required to verify customers through document verification.
In the world of digitalization, it is important to be very careful who you trust. Fraudsters will go to extreme lengths to harm your business and reputation. Fortunately, there are many ways to protect yourself from becoming another statistic on the victim list. It is very important to know your customer before enrolling if your business is sensitive in this nature.