KYC is one of the first and foremost duties of every business and organization to verify the identity and security of its users and employees. According to research, $16.8 Billion was illegally stolen in 2017 due to fake identities and false information. To tackle the issue around the globe the regulatory authorities have developed several laws and compliances that every business and organization is obliged to follow before any onboarding process with a compliance cost of $61.7 Million to the banking sector every year in the UK.
Most of the sectors comply with the KYC regulations
There are several principles for which the KYC process is made compulsory in many of the financial and economical industries of the world. Europe and US have complete sets of laws of KYC verifications which are effective in different sectors such as the banking sector, asset management organizations, financial technology (FinTech Apps), private lending platforms, and even on politically exposed persons (PEPs) who are in touch with other agencies.
There are different KYC checks to prevent money laundering including the 3rd, 4th, and 5th European Money Laundering directives, The UK Bribery Act, and the Customer Identification Program (CIP) in the United States.
Manual KYC Verification Process
The KYC Process guarantees security and prevents risks involved such as scamming and fraud. Providing the legal documents to the service provider or a network of organizations to avail of their services is part of KYC or Know your client/customer policy. The identity is verified by the company by checking data from the national identity card and other documents such as the passport.
Locating a customer provides a sense of security whenever looking to approach a customer for any sort of query and checks. Age verification is a must as most service providers do not allow underage people to avail their services as it can impact the individuals in negative ways. Age verification is the major part of KYC identification before allowing access to the service.
Face verification is the compulsory process of KYC to guarantee the availability of the customer. Customers are asked to provide their images to record their faces and identity for future references. Many offices ask for different documents verified by the law authorities of the country before allowing the user to access the premises of the corporation. The registration from the legal authority is also a process associated with KYC regulations.
Automating KYC Service with Artificial Intelligence
When it comes to digital customer protection and prevention of money laundering online, Artificial Intelligence is the backbone of security and verification systems. The KYC process is no different when it comes to utilizing AI to ensure the credibility of the users.
Most industries today are complied with the law to follow the KYC verification before providing their services to Users, including tax authorities and other security agencies.
Digital KYC verification is performed with the help of AI. Different checks are performed online to verify the user.
Verification of Documents including ID Cards and Passports
Digital scanning and verification of documents is the core aspect of Artificial Intelligence. It utilizes machine learning to detect the different documents and verifies their originality by comparing the documents with other legal entries of the user.
Verification of Address and Location
With the help of GPS, The AI system can detect the live location of the client. This ensures the address verification process online with ease. Automated verifications are a core part of Artificial Intelligence.
Verification of Age
Age Verification is the first check for most online systems today, as it filters underage users from accessing the content online. The AI system identifies the age from legal documentation and verifies it with the input from the user to make sure the right person is accessing the profile.
Identifying faces online is one of the core uses of modern-day systems. The face is recognized online with the help of the face verification system. AI uses the camera to detect faces and ensures the presence of valid customers online.
KYC Verification with AI is used by most of the systems online from financial Market to private lending agencies. The digital KYC process is the new perspective as it helps in increasing the security and decreasing the time and risk associated with the manual KYC verification process. KYC Verifications are strictly followed and with time, technology is playing a keen role in providing the benefits of online KYC and digital security.