Digital KYC As a Means To Streamline Customer Authentication

 

The process of onboarding customers on a worldwide basis in financial institutions requires rigorous customer identity and a specific validation process known as KYC. The system of digital KYC helps in the most crucial cases by eliminating the harmful threats that can hamper customer presence and resources. Unlike the traditional KYC process, this method of KYC is less time-consuming. Had it not been without the occurrence of the COVID-19, the story of KYC would still have been the same.

Reports have suggested that the process of onboarding customers online has led to an increased account opening in the financial sectors by a great percentage in the next 2 years. Thus, it plays a great role in streamlining the authentication of customers.

What is the process of automation for a digital KYC solution?

This customer onboarding KYC is used in different sectors for a number of automated processes. These include:

·        Identifying and verifying the customer and the beneficial owners

·         Making PEP and sanctions checks

·         Monitors the transactions and improves business relationships

·         Noting down any kind of suspicious transactions

How is digital KYC beneficial?

With the growing technology, the demand for digital KYC is also increasing. Given below is a list of some of the advantages of using this KYC in financial services.

Efficient: Compared to the traditional method, this process of KYC is much more effective since it takes much less time. Thus, a lot of employees are not required for setting up regulatory compliance. Instead, they can be used to deal with even more important parameters of the business.

Secure: Companies collect data on customers as a protocol to avoid KYC fraud. Just like online services have a lot of advantages, there is also the chance of countering with fraudulent activities. Thus, certain KYC tools have been used to encrypt the storage of these important documents so that no one else can have access to it.

Convenient: In the technological world, accessing KYC digitally is not a big problem. Verification requests can be sent to customers with just one click and they won't even have to take the pain of visiting the branch. All the customers will have full access to their data sitting right at their homes.

Cost-efficient: Thanks to the digital mode of KYC, businesses can run well and any cost associated with the KYC processes and the storage of documentation is accessed using the fingertips.

Data security: For most cases, the KYC details are encrypted. Thus, only the authorised user is liable to have access to the data and details.

How does KYC look after its members?

The customer onboarding KYC protects its users from several issues. Some of them include:

Negative media: Negative media can often contain information that is unfavourable to the customers. These can come out the unstructured news outlets. But, KYC compliance looks out for the business from around the globe and monitors any sign of corruption, terrorism, crime, money laundering, etc.

Saves PEPs: PEPs also known as Politically exposed people are individuals who have a high-risk political position in the public. Thus they possess a great threat from terrorist attacks, money laundering and more.  These people, due to their public figure require more detailed investigation since the chance of them being printed on the news takes very less time.

Checking lists: Keeping a track of the list of database that controls money laundering, terrorist attacks, etc. is very vital. To watch over this, the government has introduced a well-equipped team of employees who can track any illegal activity from over the globe and prevent KYC fraud from happening.

The introduction of KYC in the digital format has helped the current society in a great manner. It has reduced the hassles related to paperwork and regular visits and has brought everything to one's fingertips.