In this digital world, financial frauds are exponentially increasing. Many businesses and individuals are becoming victims of various frauds. With technology advancements, fraudsters have come up with resourceful ways to run their malicious activities. The fraudsters are intended to manipulate the systems of legitimate entities such as financial corporations, e-commerce platforms, and banks in order to commit frauds, avail free service, and convert black money into white money. The financial corporations’ client verification is done in the traditional way which leaves enough loopholes through which the fraudster can misuse the system. Therefore enhanced technology-based (Know your customer) KYC compliance is viable for businesses that never leave the penetrable space for the fraudsters.
What Is Client KYC Verification?
Know your customer is referred to as a type of verification compliance or client due diligence. Client verification processes enable the businesses to verify the true identities of the customers before onboarding them and also access the potential risk possessed by any customers.
It’s mandatory for businesses and corporations by the regulators to verify their customers before providing them with services due to the KYC regulation. Know your customer process verifies the true identity of the clients through information like name, age, date of birth, ID card, etc.
Importance Of Client KYC Verification
Know your customer plays a viable role in the development of a trustworthy financial system. The insufficient security measures taken by the financial corporation give free hand to the fraudsters. With the presence of the loophole in the system, imposters get access and manipulate the system for their personal gains. Therefore the financial corporation as well the businesses are in dire need to enhance their secretary measures which can provide fruitful results to mitigate the financial and identity frauds.
Client KYC verification process ensures the priming results and is capable of mitigating any kind of fraud instantly. Such as data breaches, account takeover frauds, credit/debit card frauds, identity theft, and money laundering. With unauthorized access to online platforms, frauds are increasing. To combat such uprising fraudulent activities, the financial institutes and businesses are obliged to employ technology-based KYC in place of their old school client verification process before onboarding the customers. This will not only help to onboard legitimate customers but also meets the global regulation of KYC compliance.
Working Of Client KYC Verification
1. Client Information Collection
To avail of the online services, the customers have to get themselves registered on the digital platforms. To do so the client has to input all the personal information into the registration form.
2. Ask The Client To Upload Identity Documents
After inputting the information, the client is asked to upload the scanned copies or photos of government-issued identity documents. Through this, the system authenticates that the information entered in the registration form was authentic or false.
3. Identity Verification
When the identity documents are uploaded, the template is authenticated through various document checks to determine any signs of tampering or photoshop. Once the documents are validated then using the OCR technology the information is extracted and then compared with the data placed in the registration form. If both information gets matched the customer is good to onboard.
Benefits Of Know Your Customer Compliance
Corporations performing KYC screening on their clients gain a satisfactory hint that they are onboarding legitimate clients. Using fake or synthetic identities the fraudsters tend to exploit the system for their own gains. Know your customer compliance helps fintech industries with efficient risk management to identify the risk instantly. Using KYC the clients’ onboarding becomes seamless.
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Seamless And Secure Client Onboarding
By employing KYC compliance the businesses can develop a secure client base. Screening and identifying the true identities of the clients before getting them on board ensure the commitment of protecting the businesses’ interests. A good security measure is also one of the needs of clients. Businesses having KYC incorporated can attract a large number of client attention.
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Sustainability And Trustworthy
Know your customer compliance helps out businesses to sustain and make them trustworthy in the market. This compliance with regulation is helping the corporation to gain worldwide acknowledgment as well as market share. Looking on the other side, the non-compliance with KYC regulation leaves plenty of loopholes for the fraudsters by which they run illicit activities to manipulate the system.
Final Thoughts
However, digital businesses are in need of effective know your customer verification solutions to prevent the risk of identity fraud. Businesses must employ client KYC verification compliance into their systems to combat the rising of fraudulent activities and to perform frictionless client onboarding processes. Know your customer verification ensures businesses’ credibility as well as their growth.
