COVID-19 has made it essential for businesses to shift to online mode; the companies' survival is impossible without the digital way. In 2022, the spending on digital transformation is about 1.6 trillion US dollars. Technological advancement has boosted the well-being of individuals, but rapid digitalisation has a flip side as it has also accelerated fraudulent activities.
Hackers use the latest methodologies to hack customer accounts, and they mostly use fake identities generated by artificial intelligence to commit illicit activities—legal authorities are driving new strategies to combat these scams. Digital KYC onboarding illustrates biometrics used to tackle all kinds of scams.
Online methods are used to onboard customers and perform their verification; no physical presence of the client is required. This process can be done anywhere worldwide, and the client must ensure the internet connection is strong. Secondly, any hard form of document is not required, and the client does not have to parcel the legal papers to the company; soft forms of papers are submitted. Users just take two or three pictures of the reports, scan them, and upload the documents on the portal given by the company.
For onboarding customers, these documents are verified through digital document verification. Document verification in digital KYC solutions differs in every industry, depending upon the type of business, but the overall confirmation process is the same. The following are the commonly used methods for checking the authentication of the client and their legal papers:
Users are asked to upload scanned copies of the papers; the image should be properly visible. After uploading kyc documents on the given portal, the validity of the papers is checked. Ensure that they contain all the required information and that the data is complete.
In this step, the validity of the legal papers is checked; first, the data from the documents is extracted with the help of Optical Character Recognition (OCR). The information templates are made, which are then matched against the data previously stored in the database.
If the data matches with the templates present in the private and government databases, then verification is done, and this means the user is authentic; otherwise, red flags will be shown, which means that the client is not genuine, and the company has to take measures against it. Sometimes, companies ask the customers to provide additional papers to check their validity.
These solutions will increase the revenue of the companies in the following ways:
Traditional processes were time-consuming and hectic, as the client had to wait in queue for their turn. The image-based verification solutions are rapid, and the whole process is done in seconds.
These solutions are very convenient; even if an uneducated person can operate them, there is no need to read complex and wordy user manuals. The client has to face the camera or put their finger on the scanner, and their verification is achieved.
The verification process is the same for everyone, and no favouritism is involved.; image-based digital KYC is very transparent and reliable.
Digital KYC onboarding promises to streamline onboarding, and companies can onboard many customers simultaneously through those solutions. It is convenient for both the client and the user.
The best feature of online KYC is it mitigates the risk of all digital fraudulent activities. The company will onboard only legitimate customers and continuously monitor them to ensure they do not get involved in any illegal act later. This safeguards the interests of the company and its customers. Companies perform digital KYC onboarding while doing partnerships in the businesses. In this way, they can get complete information about their partner and better understand their businesses and the strategies involved in their workings.
Digital KYC onboarding hedge companies against penalties imposed by the government; legal authorities have made it essential for companies to comply with the digital KYC regulation.
The contraposition of the digital world is fraudulent activities, and scammers use deception methods to scam clients. They use fake identities, dummy websites, or perform social engineering to hack the users' bank accounts. Fintech industries use digital KYC to hedge clients' identities and sensitive data. These solutions use encrypted methods and machine-learning tools to onboard and monitor customers. These automated systems check the authenticity of the client and their documents. For companies using these technologies, a significant rise in their revenue is observed, as this system prevents them from penalties and reduces their unwanted miscellaneous expenses.