Providing the best possible customer experience is essential for businesses in attracting new customers and keeping the already onboarded customers satisfied. Customers encountering fraudulent activity more often can impact the brand image of a company negatively. If businesses have devised new ways of enhancing the customer experience then on the other side scammers have found new ways of deploying this, making it unable for the company to generate profitable revenues. As financial institutions are prone to fraudsters with their interlinkage with money-related transactions, this has created an immediate demand for establishing a customer KYC digitization process to protect the clients from criminalities by accessing their identities before they are onboarded.
Incapabilities of a Traditional KYC Process
The manual process of KYC authentication has been ineffective in dealing with sophisticated criminal activities. The complex procedure causes them to take a ton of time for verifying a client. It merely happens that a client might abandon the verification process by getting frustrated by the involvement of various departments through which a client has to physically go through. During the crisis of COVID-19, many financial institutions proposed an option of online account opening in which they do not have to go through in-branch visits along with their documents frequently. This has eased the ways of executing transactions as well. In contrast, traditional banks can face huge failures by losing customers to digitally-enabled banks if they do not provide a KYC online verification facility.
Various Regulated Sectors Implementing an Online KYC Technique
All those industries which fall into the category of the regulated sector require the implementation of an e-KYC solution. These can include insurance companies, fintech startups, foreign exchange agents, etc. Along with upgrading and keeping up to date with the new standards coming with the latest innovations, these entities need to comply with the anti-money laundering regulations. In order to compete, the traditional organization needs to put forward the know your customer requirements to survive in the digital world.
How to Verify KYC Documents Digitally Through Biometric Verification
With the usage of biometric authentication, the clients can be verified digitally at a fast pace. This technique of KYC online verification utilizes the scanning of the facial features of a user taken through a selfie by the client and compares them with the picture posted on the ID documents. The need for remembering long passwords will be diminished while authenticating the client through biometric verification. Documented identity scanning is another method for authenticating the documents in which the user uploads the pictorial representation of official documents through which the text is extracted by using an automated AI-based software of OCR. The text details are then compared and matched, resulting in an identity as verified or non-verified.
The Beneficial Elements of Online KYC digitization
The digital transformation of the know your customer requirement has evolved dynamically. It has posed to benefit the organization specifically in two basic ways:
Improving the Customer Experience
As individuals will be dealt with quickly, it will make their verification procedure to be hassle-free. Since the online know your customer allows the customers to get validated at the initial point, it possesses a greater rate of accuracy, it will shorten the onboarding time without having to face any major data errors mainly caused by the manual intervention. Not only will this make the customer satisfied but it will help to generate fewer complaints from the customers leading to improve the company’s image globally in the market.
Cutting off the costs
While every set of information will be saved digitally on an online database, fewer hardware resources will be used which will allow the company to save some costs. The storage space occupied by piles of documents in the manual KYC process will be wiped out as there will be no need to save up paper documents as everything will be processed digitally. Moreover, the customers will be secured by protecting their reliable data and assets in banks from fraudulent activities.
Wrapping it Up
The evolution of the digital world has caused an uprise in criminalities all over the globe. Financial firms need to overlook their regulations and update them digitally to provide their customers with a secure onboarding experience. To stimulate the customer KYC digitization procedure, biometric verification enables companies to detect fraudsters by analyzing their facial features along scanning their pictures with their photo ID. The data of the customers should be streamlined during the initial stage to eliminate any errors before it disrupts any further. Hence, the more the banks optimize the online KYC digitization authentication process, the more they will be able to make the customer experience effective, user-centric, and efficient.
