KYC verification – Combat Financial Fraud and enhance your businesses workflow

The human population is increasing as well as technological advancements. Even though technology has multiple benefits, it also has drawbacks. There are so many thefts and frauds happening that the regulatory authorities are constantly updating regulations. 

Additionally, businesses are tired of staying updated with changing regulations because they have manual KYC verification systems. Therefore, Adopting technologies such as artificial intelligence is the new norm. AI has made KYC verification much easier. It has provided robust, cost-effective, fast, and accurate verification of customers and clients before onboarding them. 

Know Your Customer Compliance 

Know your customer verification is the authentication of an individual’s identity before a business deal is finalized with them. All financial institutions dealing in money have to perform KYC verification as a regulation. These regulations are imposed by FATF and FinTech. But why were they imposed?

Mainly because of prevalent thefts and frauds happening all around the world. These frauds can be minimized through identity verification. The verifications ensure that the customer uploads his real documents, real pictures and the address provided is not fake. Additionally, it verifies the age of the user so that companies do not face any age-restricted violations. Furthermore, businesses can avoid hefty fines in terms of violating AML and CFT regulations. Anti-money laundering and counter-terrorist financing screening are necessary to catch criminals involved in drug trafficking, and human and child smuggling. 

All these verifications are necessary to safeguard the world from criminals. 

KYC Verification Process

There are approximately 5 types of know your customer authentication process. The process successfully identifies the individual and creates a profile in the backend of the business

The 5 types of KYC requirements are document verification, age verification, address verification, consent verification, and biometric verification. 

Document verification 

In document verification, the documents of the customers are required to be uploaded along with his/her details are ought to be filled. When the customer has uploaded his ID documents for KYC verification, he is asked to click a selfie holding the documents. The documents are then verified through deep checks such as checking of holograms and inks and the picture is verified through facial recognition. The information on the documents is extracted through the OCR app or through the ICR app. 

Facial recognition 

Another type of biometric verification for the KYC process is to verify the facial biometrics of the individual. Every human being is different and has unique features and the AI-powered verification system extracts information from the picture and stores it in the backend. Both the readings from the selfie clicked and the picture uploaded is verified through comparison. Minor details are checked such as deep fake, the distance between the two eyes, skin texture, and much more. The multiple facial verifications make it the most authentic verification. After the face is verified the KYC verification software verifies the age. 

Age verification 

Age verification is performed by analyzing the skin texture and recording the readings in the back end. The readings are then analyzed by artificial intelligence and machine learning projects. Then those readings are correlated with the age provided by the user and by the picture provided in the documents. Once verified, the software moves onto address verification. 

Address verification 

Address verification is the verification of the address of the individual. The app does not require any physical presence to verify the address. But rather the customer is asked to upload documents such as utility bills or bank account statements. In addition to these documents, the user is also required to upload passports and driving licenses. These statements must not be more than 3 months old. Then the address is verified by correlating the information already provided and by checking the address mentioned on the document. The KYC status is then displayed. 

Two Types of KYC 

Enhanced KYC 

Enhanced KYC can also be called digital KYC verification. The customer is asked to upload a recent selfie and documents. The person is then verified within seconds. Enhanced KYC is necessary to avoid AML and CFT violations. Any business that finds any association of users with money laundering and financing terrorists then they is bound to report the authorities. 

Video KYC 

Video KYC is the process of identifying the customer through a human KYC expert. A video interview is scheduled with the user and then the expert analyzes the facial biometrics with the picture already provided. In addition to this, the expert also checks the documents and verifies the age through them. These verifications are performed to check the physical presence of the customer. 

Final Thoughts 

With the evolution of technology, businesses must adopt those technologies that assist them in their daily tasks. KYC verification must be performed through all verifications such as document, age, facial, and address. All these verifications are performed to enhance the authenticity of the KYC documents. 


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