How can eKYC support in onboarding customers efficiently?
Today, banks, financial Institutions as well as e-payment service providers are more and more focusing on implementing eKYC solutions. But, how do these institutions exactly benefit from onboarding customers? Before answering this question, let’s begin by understanding what KYC and eKYC is.
What is KYC?
KYC is the abbreviation of “Know Your Customer/Clients”. It is the process of verifying the identity and other credentials of a financial services user. The KYC process helps against money laundering and prevents the financing of any attack activities. It is a mandatory process required by many countries to ensure the authentication of the customer’s identity. Empowered by the law, KYC procedures also supports financial institutions by preventing several risks. By implementing KYC solutions, customers can benefit among others from the following:
• Prevention of money laundering and other anti-social activities
• Help lenders to perform risk assessment by identifying the previous financial history and assets owned
• Limitations of fraudulent behaviors that are mainly due to hiding of identity
• Support of financial framework to be more trustworthy and less risky
• Reduction of uncertainty and assuring the money flow in a more active way while increasing customer’s profits
The KYC process can be carried out for both individuals and organizations. KYC authentication is based on identity and place of residence verification. To complete the KYC process for individuals, there are certain identification documents needed such as driver’s license, social security card/number, and passport or documents issued by the state or the federal government. For proof of residence, documents like utility bills (telephone, electricity, gas…etc.), bank statements, employment documents or housing/rent contracts are usually required.
What is eKYC and what are the advantages of implementing it?
In comparison to manual KYC processes based on forms, electronic KYC (eKYC) emerged as a popular alternative. eKYC is a digital KYC verification procedure used by regulated businesses to verify the identity of customers desiring to obtain services. In recent years, the banking and finance industry have become more digitalized in terms of process. Especially after COVID pandemic hit the world, the digitalization of financial institutions took a steep acceleration. Fintech growth under the support of cloud computing and biometrics increased the number of online banking services to offer purely virtual banking services without having physical branches. Due to restrictions like maintaining social distance, the number of customers who prefer to open accounts online increased while more services are being offered digitally. This has resulted in a major decline regarding customers visiting bank branches physically.
Since physically opening a bank account or conducting any other financial transaction has become more and more difficult, eKYC grow to become impeccable for banks and financial institutions. The importance of eKYC rises as it digitalizes KYC process by increasing the efficiency and saving the application time at the same time. It is not only paperless customer onboarding and identity checking, but it also plays a major role for anti-money laundering (AML) transaction monitoring. In addition, eKYC provides more advanced authentication technique such as digital signatures, which enables the user experience enhancement.
What more can eKYC do for the industry?
eKYC consists of various integrated components to assist businesses in customer journeys through digital customer onboarding. The target sectors of eKYC include banking, financial/money services such as mobile wallets, remittances, loans, and telecommunications, where customer identification is a high priority function in the customer registration process. eKYC is considered an aid that helps in increasing financial inclusion as its components are composed of other technologies such as AI, machine learning, and even biometrics. Through eKYC, financial institutions can carry out KYC checks and due diligence processes without the need of physical verification.
Further, digital processes also reduce the room for human errors and improve the allocation of resources to enhance the customer experience. As per the Asian Banking and Finance Journal, almost half of the applications that have been submitted through the eKYC platform were successfully processed within three minutes. When compared to the traditional manual review process, it takes at least two hours. In addition, eKYC technology can also help protect banks against fraudulent attacks by detecting more identity fraud patterns at the outset, during transactions, and by monitoring portfolios*.
TOPPAN IDGATE eKYC solution
TOPPAN IDGATE’s combined years of experience developing data security for the finance industry and proven track-record raising successful businesses, we understand the fine balance between what banks need and what their customers want.
With its selfie match-on-card feature, TOPPAN IDGATE’s iDenCard solution verifies the legitimacy of provided government IDs; iDenFace uses AI face recognition technology for liveness detection and anti-proofing features.
The ID anti-counterfeiting technology from TOPPAN IDGATE significantly improves the eKYC procedure. The users are instructed to take a photo of their ID card as a proof, and TOPPAN IDGATE’s solution will automatically compare important ID features, carry out careful color detection, and find anomalies using an AI model, like employing printed photos and concealed information from images. While the eKYC authentication process is carried out through mobile devices, this is done to confirm that users have used the original ID for their registration process.
TOPPAN IDGATE’s advanced solutions prevent identity fraud, phishing, and automated processes, providing the highest level of security with a smooth and intuitive user experience.
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*1 DS Innovate & Telkomsel Whitepaper 2021
About TOPPAN Gravity
As a global solutions provider primarily focused on the payment and Identity industries, Toppan Gravity aims at developing the next generation of virtual and physical security documents.
With the vision of becoming the forerunner in the secure ID and payment industry, the company focuses on driving synergies within the Toppan Group, through strategic acquisitions. Toppan Gravity empowers promising companies’ having state-of-the-art technology or businesses in emerging markets, including Asia, Africa, and Latin America to enhance their overall performance. Furthermore, the company enables its acquisitions to take advantage of the opportunities presented by its large, diversified group having numerous resources and extensive know-how.
About TOPPAN IDGATE
Toppan iDGate, acquired by Toppan in 2020, was co-founded by a group of tech entrepreneurs with a vision for improving what they saw as a sore spot in the market for identity verification solutions. In a world where we tend to oppose security to user friendliness, Toppan iDGate is striving to offer highly secure but also highly convenient authentication solutions, for digital transformation and online banking services. With our combined years of experience developing data security for the finance industry and proven track-record raising successful businesses, the company understands the fine balance between what banks need and what their customers want.