As the world is growing digitally with more revenues and investments on online platforms, organizations are keener to check the user identity for security and protection of their resources and other clients. The attackers are always ready with new digital equipment to destabilize the online world of trading and business.
The statistics show different levels of attacks conducted online by several methods. One of the major attacks most users experience is the theft of identity. According to Statista, 16% of the audience in the United States were subjected to identity theft in 2018. This ratio is well ahead globally in recent times with more than 502 billion dollars lost in 2019 and this amount is increased by a dangerous 42%, leading to more than 712 billion dollars in 2020.
To tackle this issue of increasing identity thefts, authorities gathered a great number of techniques to safeguard the users. The KYC regulation is created for the complete evaluation and verification of the user.
What is KYC?
KYC as most refer to Know Your Customer or Know Your Client is a complete set of methods that are executed to verify the user or client. The KYC check is performed mostly by banking and other financial institutions before any process of customer onboarding. Compliance with the KYC regulations and checks prevents the major acts of money laundering and identity fraud. It is a very efficient technique for detecting suspicious activities of the users which can lead to harmful events.
The KYC check complies with other acts of security such as the AML (Anti Money Laundering) act which was proposed in 1986 to tackle the issue of money laundering in online systems, other laws also abide by the KYC regulations to verify their users including the banking secrecy act.
The KYC cycle consists of multiple methods of identity verification service. With the use of modern-day technologies of computing such as Artificial Intelligence and Neural networks, the KYC check has evolved into a digital KYC solution or online KYC process.
Digital KYC Solution
The online KYC verification service is increasing with every new system implementing the online solution of verification. The digital KYC checks consist of multiple methods of user evaluation for the authentication of the user.
Biometric Identity Verification Service
The digital KYC solution consumes the biometric processing system to the fullest for maximum evaluation of its customers. Most online KYC systems use Face scanning technology to intelligently identify the client by using their face as the identity. The facial recognition system is efficient as it uses new methods of computing to intelligently map out the geometry of the user’s face for uniquely identifying the customer. Other methods of biometric scanning include the fingerprint scanning system and iris scanning which use human eyes as the subject of identification. Verifying the user with the help of biometric scanning is a secure process as the fraudsters are unable to breach the biometric security system.
Online Document Verification Service
Documentation of the client is what every firm prompts for whenever registering a new user into their system. The document verifies the user’s identity by evaluating the client’s data. The document verification system is a part of the KYC check and it is compulsory for the completion of the KYC identity verification process. The online document verification service is an evolution of the traditional approach of the KYC solution as it uses new digital tools such as OCR to read and process the documents of the user online. Document detection and validation also play a keen role in ensuring the security of the online platform by checking the originality of the document using digital means of verification.
The multi-step authentication is a process of implementing an extra layer of security on the online KYC technique. With multi-step authentication, the users are protected as they are required to input a security pin at every onboarding instance of their interaction with the system. With 2-factor authentication, the KYC identity verification service is improved as the attackers are unable to access the security pin every time a user logs into the system.
Wrapping It Up
With multiple opportunities in online platforms for trading and other means of earning, people are moving more towards the online industries with their investments and assets. This increases the risk of online fraud and scams by attackers. Tackling the challenges of the digital world, KYC compliance is made necessary for not only financial institutions but for other digital platforms as well such as social media sites to verify their users. With KYC regulation checks, identity theft is greatly decreased as the new users are evaluated during every onboarding process.