These days, businesses have access to easier, faster, and more cost-effective channels for growing their customer base. But the existing regulatory landscape makes it challenging for them to access ideal customers.
Customers, after all, want the process of opening accounts, making purchases and conducting transactions with businesses to be quick and seamless. The trouble is, organizations today have security concerns that compel them to send potential customers away from their preferred channels for identity authentication.
These requirements have created a strong need for advanced Know Your Customer (KYC) technologies to turn customer onboarding into a streamlined, digital approach.
Here is a comprehensive guide to KYC and how you can simplify the verification process for your customers and business alike.
Know Your Customer is an extensive process used to validate clients' or customers' identities and to ascertain if they pose any fraud risks.
The KYC verification process ensures a safer relationship between businesses and customers. It confirms customer identities through KYC documents and a set of compliance rules that apply to the global banking industry and finance-related firms operating online.
A significant part of KYC procedures centers on regulatory compliance via risk mitigation, which includes customer due diligence processes. Know Your Customer guarantees that all financial businesses, including banks, manage their customers and reputational risk, specifically for criminal fraud and money laundering.
To prevent fraud and money laundering, you must know your customers. For that, you need to perform KYC identification and verification, review financial activities, and assess risk factors to track and minimize illicit activities.
Here is what KYC looks at.
Financial crimes and terrorism are increasing, posing a threat to all parties involved in the process. More criminals than ever before are testing the limits of novel technologies as they indulge in a diverse range of fraudulent activities, both virtually and physically.
With this growing risk concern, KYC is critical to mitigating such threats in many organizations. Governments identify financial fraud as a primary concern of contemporary society. Therefore, don't overlook the need for an effective KYC process, and implement it as soon as possible.
Here is a rundown on who KYC is most important to, and why.
Know Your Customer verification with passive liveness detection enables users to authenticate their identities within seconds.
On the other hand, active liveness detection takes relatively longer. It also requires users to perform a set of prescribed actions, which can get tedious.
Passive liveness detection makes for a smooth, frictionless experience. This, in turn, helps lower user abandonment rates when onboarding customers remotely.
And the fact that organizations are progressively prioritizing customer experience to entice and retain customers has driven their shift to modern solutions like passive liveness detection.
Passive liveness detection is preferable for KYC authentication over active liveness detection. Both approaches detect spoofs, but only passive liveness detection keeps the process seamless, fast, and effortless. Here are some of the reasons that passive liveness detection is the better choice.
International Organization for Standardization (or ISO), is an international, independent, and non-governmental association that sets internationally agreed-upon compliance standards with the help of experts in the field. When an organization complies with the regulations and rules published by the ISO, it is said to be ISO-compliant. Here are a few important factors to look for when selecting a verification software partner with ISO passive liveness compliance:
Working with an ISO-compliant biometric ID technology eliminates spoofing in the passive liveness detection process, and guarantees that customer data is authentic. It also ensures interoperability, compatibility, and security—all imperative for robust KYC verification and biometric systems. IDmission meets the standard requirements for ISO/IEC 30107-3 qualification, and was found to be 100% compliant with an error rate in iBeta testing of 0%.
Criminals and fraudsters have come up with innovative techniques to carry out their illicit activities. They misuse data and systems of credit unions, ecommerce stores, banks and other organizations to steal and commit fraud.
This means that authentication processes for financial institutions are essential for identifying threats and uncovering malicious profiles early on. This makes it easier to prevent and combat fraud, and protects businesses against penalties from regulators.
Deep fakes, cut-out photographs and masks are just some of the many ways scammers spoof verification and customer onboarding procedures. Anti-spoofing solutions like passive liveness detection, coupled with an advanced biometric validation system, prevent this criminal activity.
An all-inclusive biometric system like IDmission helps you fraud-proof your business and significantly mitigate risks. If you'd like to learn more about how IDmission's AML/KYC compliant solutions combat fraudulent activity, download the AML/ KYC global watch list solutions guide.