Security solutions for banks – Streamlining KYC authentication for employees and customers
KYC, Know your Customer, or Know Your Client is a legal regulation that binds businesses offering financial services to perform certain processes for the authentication of customer IDs. KYC authentication is a major requirement for all banking institutions in order for them to carry out their business.
Implementation of KYC is important for banks for several reasons including it being a legal requirement as well as a security necessity. The goals of KYC authentication processes at banks include:
- Verifying users’ identities for recording purposes
- Being in compliance with the law
- Preventing fraud, money laundering, and other financial crimes
- Ensuring the legitimacy of clients
- Increasing trust among the customers and offering them a better customer experience
KYC Online verification depends on the type of content that is being verified, as well as the goal of the verification.
KYC verification through ID cards
ID card verification refers to verification using government-issued photo IDs such as passports or driver’s licenses. ID card verification is one of the most basic types of verification and is the absolute basis for the implementation of the KYC authentication process.
ID card verification also relates to e KYC verification where electronic ID cards are biometrically verified to check for authenticity.
For KYC authentication through ID cards, the identity verification service can be set up at signups or any other time when verification is required. The system asks the user to submit their photo ID and a selfie taken right at that moment with the webcam or phone camera. After the submission of the ID and the selfie, the authentication process starts, taking only a few seconds. Once complete, the results of the authentication are displayed on the screen.
KYC authentication through facial recognition
Facial recognition is another very crucial step of KYC authentication that can be set up by banks for customer verification. Facial recognition technology for identity verification works by using strong artificial intelligence-based software. AI-powered technology for facial recognition is an excellent way to utilize neural networks, machine learning, and deep learning to teach computers to perform the complex cognitive task of understanding and analyzing human faces.
Services for facial recognition for KYC authentication work by asking the end user for a live image taken at the moment. The picture is then analyzed considering a few parameters and features which include depth mapping, facial textures, intrinsic facial movements, micro-expressions, and 3D sensing techniques.
Allows banks to perform KYC authentication through facial verification for three different purposes.
During digital onboarding
Facial recognition can be used to verify users during the digital onboarding of a new account. Here, the client uploads a document or a photo ID as KYC authentication their proof of identity and then the picture is verified to ensure the authenticity of the photo ID.
For banking end users, transactions can be a sensitive process, especially when it comes to big transactions. Users want the ideal amount of security to ensure that their bank accounts, transactions, and money stay safe.
While banking phone applications make banking and transactions easier, they also leave them much more susceptible to scams, ID theft, and hacking. For this purpose, banking institutions can set up KYC authentication to ensure a simple photo verification step before processing online transactions. Here, the user will be asked to upload only a picture to the system and will check it against the data already stored and verified.
KYC authentication through facial verification can be used for another purpose which is liveness detection. This can be particularly useful for banking employees working remotely, as well as for sensitive online meetings.
Digital KYC verification using documents other than state IDs
Besides photos, KYC authentication can also be processed through documents such as utility bills, credit/debit cards, bank statements, etc.
These documents are undoubtedly very important to be verified during the digital onboarding of a new account. However, document verification can also be implemented bi-annually or yearly for banking institutions to verify the addresses, employment statuses, etc. of their employees. As KYC authentication will be used for the verification of the document, it will also assess for their recency.
Why KYC compliance is essential
KYC authentication is a requirement for banking institutions in multiple countries including India, China, Japan, the United States, and Australia. Regular KYC authentication is essential for many reasons, and if an institution is found to be not in compliance with KYC, they can suffer serious repercussions such as shutting down of business, major fines being levied, and a lack of customer trust leading to the downfall of the business.
Different companies offer accurate, efficient, and secure KYC solutions for identity verification to banking institutions. With fast screenings that take only seconds, access to 1700+ watchlists, complete automation, and the ability to screen over 3000 types of documents.Services are balanced and secure, offering accurate and reliable KYC process as well as efficient customer service.