Why KYC Video Identification matters in the digital age?

The influence of technology in the financial world grows exponentially with FinTech being a unique term of its own to refer to the digital facilitation of processes such as payment, loan lending, and investing, etc. Businesses thrive from the benefits that FinTech provides, from greater customer acquisition to optimized and more secure services.

But with these advantages, there grow risks of criminals who equally come up with new methods of exploiting systems and laws. Through the years, the introduction of laws, regulations, and holding businesses responsible for not following Know Your Client (KYC) and Anti-Money Laundering Compliance contributed greatly to the handling and curbing of crime.

However, this does not seem enough in the battle for security which brings the need for newer and more sophisticated ways to verify customers since up to $2 trillion dollars goes into money laundering which constitutes for 2-5% of the global GDP.

One of these new methods of identity verification is through KYC video identification. This Know Your Client process is conducted remotely with the help of an expert communicating with the user to verify their identity. It is done through certain steps and holds many benefits for businesses that adopt this.

How does KYC Video Identification work?

It is a fairly simple and convenient process that makes KYC and AML compliance easier to follow for businesses and financial institutions. It is done at the time of client onboarding to help securely verify their identity to avoid troubles such as identity theft and money laundering, etc.

The process is undergone through the following steps:

1. The customer fills up a registration form online requiring necessary information.
2. After successfully submitting the form, they are connected with an expert to verify their identity.
3. The expert will use facial recognition and liveness detection along with other various AI technology to scan the customer’s face during the video call.
4. The expert will then begin to collect and verify information once the expert gains the user’s consent.
5. The user will then be required to show their document that proves their identity such as a driving license, passport, or ID card. Both sides will need to be shown along with moving the document to verify the existence and validity of holograms.
6. Throughout the process, the expert will evaluate whether the customer is genuinely who they present themselves as based on their behavior and the document’s validity.
7. Once all the information is collected and verified, the user’s information is then stored in the back end database. The process is then complete.

The benefits of Video KYC

Making use of KYC video identification provides businesses and financial institutions with plenty of benefits namely:

• Paperless Verification

This process saves time and the need to print and submit hardcopy forms. Not only does this simplify the process but spreads a positive attitude such as environmental awareness which catches customer appreciation which is rewarded through increased user acquisition.

• Remote Verification

There comes a lot of benefits by making the verification remotely carried out. It saves the customer’s time to travel and wait for a session with the business’s KYC expert. It saves the business time as well to tend to the customer’s paperwork when the process is digitized which allows for increased productivity towards other important tasks.

• Cost-effective Method

With the elimination of paper and printing, it saves businesses tons of money annually by performing this identification verification method virtually.

• Secure Customer Onboarding

The profiles of users are securely collected through this method that eliminates the risk of identity fraud and the entertaining of malicious or troublesome customers with a criminal background.