How the Automated Digital Verification Solution Help Reduce KYC Bottlenecks
Bottlenecks in KYC
KYC is an essential process financial institutions use to verify the identity of customers before establishing a business relationship. Albeit mandatory, many businesses find the KYC process not only labour intensive, costly, but also time consuming. A research by KPMG discovered that the information gathering and processing took up almost 80 per cent of KYC effort, while assessing and monitoring information to generate critical insights only constituted 20 per cent.
Today, digital verification has stepped in to help streamline the KYC process. Digital verification acts as an online verifier to validate individuals at a faster speed and with higher accuracy.
What is Digital Verification?
Digital verification is a part of the eKYC process and it allows customers to fill up and submit the documents in the shortest time possible, eliminating the need for physical documents. Electronic Know Your Customer (eKYC) is the digital transformation of KYC. eKYC is aimed at automating and digitising the KYC process. Digital verification not only quickens the process of KYC, but it also allows financial institutions to minimise costs and improve conversion rate.
Digital verification is a method of determining an individual's digital identification. It verifies an online user's legitimacy by checking personal and biometric data. The objective of the identity verification process is to smoothen service provision and entitlements.
Identity verification is done to ensure that an individual who joins your system is authentic. By acquiring, confirming, and recording user IDs, you can reduce the risk of digital fraud. Lack of digital identity verification standards results in significant financial loss and puts a company's reputation at risk. Besides avoiding digital fraud, digital verification also ensures the customers data protection and privacy.
4-Step Process of Digital Verification
Digital verification consists of four steps which help businesses mitigate risks of establishing business relationships with customers who are of high risk.
- Confirming humanity
- Verification and Authentication of documents
- Enhanced Customer Due Diligence (CDD) to verify the customer’s background
- Screening against Politically Exposed Person (PEP) records and global watchlists
In conclusion, with digital verification, not only can businesses decrease the time taken to carry out KYC, businesses cost can be reduce. Most importantly, digital verification ensures customers data protection and privacy .
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