KYC Compliance Online - Saving Businesses Form Penalties and Sanctions

Now there is more internet and digital services usage than the physical ones. The past two decades have seen mind-boggling changes. For example, now businesses do not use letters for communication, instead, emails are utilized. This is an easier and fast method, letters usually take days to deliver to the door, however, dozens of emails can be sent to numerous people with a single click. The world has become habitual of using the internet for daily tasks. Even booking a cab or getting a recipe is done using a mobile phone.

In this article, we will cover how KYC compliance online can be performed on new customers.

The rise in the use of digital services has brought countless benefits, but there are also some disadvantages that need to be discussed. 

Are Online Users Secure?

Online users have to face numerous scamming attempts. If the websites and online business do not set verification during the sign-up or sign-in.

Identity Theft

The use of some online users’ information to create accounts on the internet without their consent is known as identity theft. For example, someone who knows a user’s name, birth date, and some other background history can open a social media account. The picture can work as icing on the cake. Other users on that social media account will have no clue about the authenticity of that user. The fraudster can commit crimes, disturb other users through this. 

Banks are also at the potential target of identity frauds, in which fake accounts are created. The purpose is to launder money through these accounts. Money laundering requires multiple bank accounts so that it can be covered with financial transactions. Every bank is obliged to have KYC compliance online to mitigate the hazards of identity theft.

Account Takeovers

Account credentials of online users are stolen or accessed using phishing, dumpster diving, or other social engineering tactics, this is known as account takeover. Then the scammer opens that account and uses it for unethical and illegal practices. If the targeted account is related to banking then payment can be stolen from it.

KYC Compliance Online - Making the Digital Services Safe and Crime-free

Online businesses have to verify the customer that they onboard digitally through a process known as know your customer (KYC).

It is an online method of checking that a person’s information is correct or not. As everyone has to give the details of his personal data while signing up for an online account. The user-provided information is verified through identity documents that have a photograph and 

Issued by the government.

There are two ways of doing it:

Online KYC

This is performed by artificially intelligent software that uses OCR technology for data extraction. The users just have to upload the images of their documents using a mobile phone or PC. Facial recognition is performed on a live capture selfie and photo ID.  Then the uploaded documents are scanned again, and their authenticity is marked. 

Fraudsters try to upload fake and false documents to deceive the system. These peppers are spotted in the document verification step. Then the data from the document is extracted using an OCR scanner. The extracted data is matched with the user-entered information. 

The address is checked to see if it really exists or not. The age is calculated through date of birth and current date. Then it is confirmed that it falls under the specified range. Some businesses require their customers to be above 18 and some 16. 

Video KYC

It is like a live video interview conducted by a KYC expert. The customer has to upload his documents to the KYC expert and he and I just sit and use software to verify them. The KYC expert in the disease comments and uses software to verify it.  He might ask some questions regarding his personal information to confirm his live presence.

 Wrapping it up 

Businesses should adopt KYC compliance online solutions to eradicate the chances of fraud and money laundering through their channels. This will help them in better compliance with AML/CFT/KYC regulations. The market reputation of a method KYC-compliant business is much better than the others, also the customers show more trust in that business.