The technology sector is taking over the financial sector and the rapidly growing digital methods are indispensable for the verification of onboarding customers. Organizations are reshaping compliance procedures to address the digital lapses for larger benefits. Crime proliferation into the financial system is gaining more space amid a lack of KYC/AML legal requirements to counter financial scams. The KYC requirements include customer verification ID, video verification and facial recognition, customer document verification, etc.
Washington Post reveals consumers reported $5.8 billion in fraud and almost 70% financial losses. Banking channels are playing a key role in streamlining the financial sector by using KYC requirements for bank on digital platforms.
KYC at a Glance
KYC is the abbreviation of Know Your customer and it is about verifying every onboarding customer for smart verification using digital solutions. It includes the verification of ID cards, facial verification, audio verification and video verification etc. Banking channels are opting latest strategies to know your customer requirements using artificial intelligence integration.
Role of Technology in KYC Services
The rising spoofing activities require stringent rules to uproot financial frauds like money laundering and terror financing etc. Technology-driven solutions don’t rely upon virtual presence but also require the physical presence of the customers to prove their liveliness. All the business industries like the travel industry, hotel industry, banking industry or health industry, etc. are going to data analysis and verification procedures. KYC requirements demand KYC experts to thoroughly verify the documents.
KYC Verification Process & UK Regulatory Frameworks
The UK financial organizations are applying strict regulations on customer due diligence. Digital KYC is the replacement of manual processing. After consistent scamming incidents, UK authorities are paying more attention to introducing potential KYC-enhanced due diligence solutions for high-risk customers. Bloomberg reveals the KYC/AML compliance solutions under 2020 to mitigate money laundering & other financial crimes. Post-pandemic world order witnessed more digital frauds. With the given situation, top banking channels of the UK are implementing advanced AI models to the compliance frameworks for the flawless KYC process.
An Aerial View of List of KYC Requirements
Businesses are not immune to KYC losses where not only customer data is at risk but also the financial security of the institution. To introduce potential KYC requirements implementation, a better understanding of KYC attributes is indispensable for financial businesses.
Video Verification of Customer
During the pandemic, financial scams reached their height which led businesses to choose reliable KYC verification methods. The banking sector faced more financial crimes and video verification reshaped the KYC process in the most anticipated manner.
Customer Face Recognition Service
Artificial Intelligence is revamping the implementation process of KYC requirements to control digital exploitation. Face recognition is an exclusive technical method to detect fake identity proofs. Machine learning is taking it to an unbeatable level.
Customer Voice Recognition Service
Financial scammers try to forge the voice for illicit financial aims but robust and precision-based voice recognition services can easily detect the fraudsters. Various digital companies use voice verification for KYC requirements implementation to avoid unwanted criminal actions. AI algorithms are designed on a custom basis to attain the desired features.
Customer ID Card Scanning Process
Identity verification is a significant part of the top KYC requirements but amendments in verification regulations have enhanced the benefits of automated ID verification. AI uses the ICR procedure to verify the customer ID card and in case of forgery, it can easily detect it. Undoubtedly, some organizations are still using manual KYC verification methods but the traditional method is not going to last forever. Digitization lies at the heart of financial business security.
Data Threats in Absence of KYC Requirements Compliance
Data is the real weapon for the modern globalized financial system. It is the biggest goal for global organizations. The recent shift in the digital dynamics elevated some benefits but also some challenges which are threatening data security in the longer run.
- Large Scale Money Laundering using Digital Channels
Online banking is opening new channels for financial theft. Criminals are using digital gateways to get access to sensitive data like software passwords and other configuration details etc. for laundering dirty money to foreign accounts.
- Data Manipulation for Identity Theft
Fraudsters use private data from the banking sector or insurance companies for identity theft. Fake identity is used for various kinds of financial fraud including terror financing or cyber-attacks. Data management is affected using SQL injections. Compliance with KYC requirements is necessary for security mechanisms.
The corporate and financial sector is diligent in actively dealing with financial security issues. The traditional methods are no more suitable to fulfil the KYC requirements without technological intervention. There are various new service providers defining practical KYC requirements to proceed in the most expected manner. Without effective KYC, fraudulent activities would continue to prevail which is a potential danger for the financial industry. To conclude, automated KYC requirements implementation is a dire need of the time for long-term financial security.