In this era of technological advancements, criminals use various techniques to perform data breaches. They use stolen IDs to reach various organizations to perform illegal activities. Many fraudster’s activities such as money laundering and terrorist financing are the output of stolen IDs used to reach banks and other financial organizations. Companies require Know Your Customer regulations to overcome every kind of fraud attempt. KYC verification online services engage remote clients and enable organizations to have legitimate clients over the globe for high business success. KYC Verification provides an identity verification solution that helps to unveil fraudsters. As per the report, global revenue for identity verification is forecasted to reach from 4.93 billion U.S. dollars to 18 billion for the year 2017-2027. This blog post will explore the role and significance of the KYC Verification process regarding business security, success, and development
What Is KYC Verification Online Service?
Know Your Customer refers to verifying individuals’ identities by using various KYC documents to identify their legitimacy. KYC verification online process offers remote customer verification to have seamless business operations with real clients. The KYC process utilizes the power of advanced technology such as artificial intelligence (AI) and machine learning (ML) algorithms. AI technology offers automated services to verify KYC documents and provides insight into clients’ potential risks. It enables firms to know the legitimacy of users whom they are going to deal with. It helps to verify imposters who use fake or stolen ID documents for money laundering and terrorist financing.
The Basics Of KYC Verification Online
KYC verification came into existence as a legal compliance. It became part of the Patriot Act after the security issues emerged from 9/11. Organizations must comply with global KYC regulations to avoid legal action. The major concern behind Know Your Customer (KYC) verification is to understand and identify clients’ identity to know their risk profile. Risk assessment enables organizations to acknowledge terrorist behavior. KYC Verification Online particularly emerged during COVID-19 to identify client identity for remote onboarding and online businesses. Although the pandemic is over, companies still have clients all over the world through digital onboarding and need KYC verification online.
Two Major AspectsOf KYC Verification Online
Businesses use the KYC Verification process to protect them from fraudsters and have automated solutions. The cross-edge technology used in KYC procedures allows remote onboarding which leads to massive business growth. KYC authentication enables organizations to meet two basic compliances that serve businesses for their security and development. These two major concerns are the following;
Customer Identification Program (CIP)
CIP is the method of reaching customers’ information to have successful KYC verification online. Organizations ask users to submit various KYC documents which may include passports, licenses, ID cards, utility bills, or bank statements. The KYC documents may vary as per the organization’s requirements. For online KYC verification, users submit these documents in scanned form to be verified remotely. Every business and institution has its own CIP process and requires documents as per their operation. The CIP process must have documents that are authentic as proof of address and identity. It may be categorized in the following ways.
Proof Of Identity
Such as government-issued IDs, educational certificates, passports, driving licenses, etc.
Proof Of Address
Various documents provide proof of address such as utility bills, domicile, etc
Customer Due Diligence (CDD)
The second major compliance of know your customer verification online is the customer due diligence process. This process facilitates organizations to reach customers’ risk levels and makes organizations aware of linked complexities. By acknowledging customers’ risk level, businesses can search for suspicious activities and mitigate major crimes such as money laundering and financial terrorism. It is an in-depth process as compared to CIP as organizations require information about clients’ fund sources, occupations, banking references, business operations, financial statements, transactional histories, etc. As CIP, the CDD process is also further divided into the following two categories;
Simple Due Diligence
Organizations require simple due diligence to acknowledge the depth of client profiles who possess low-risk potential. Such as clients with variations in spelling names or two different address information etc.
Enhanced Due Diligence
Enhanced due diligence process verifies clients who possess high-risk profiles such as Politically Exposed Persons (PEP), money launderers, black money investors, illegal business owners, etc.
Businesses employ KYC Verification online to have security against the illicit activities of fraudsters. It offers successful remote onboarding of clients all over the globe and leads to enhanced workflow and business growth. Automated AI and Ml technology employed in the KYC verification process provides in-depth acknowledgment of clients’ risk profiles. Therefore it makes organizations aware of every kind of future complexities. Organizations must use KYC verification online processes to have massive business development