Customer Onboarding Using Video KYC Moving Ahead of Text Chat
FinTech refers to financial technology that advertises investments, money transfers, personal and business loans, fundraising, asset management, and digital payment systems. Unlike traditional financial institutions, FinTech deals with customers on a digital level.
The verification of digital identity is essential in the FinTech landscape. They are required to execute ID document and biometric verification for compliance with AML and KYC regimes. Identifying the errors in previous procedures, a new solution has gained traction around the globe.
KYC video identification is performed online, employing powerful algorithms for the remote verification of an individual. Video KYC tackles the fraud threat by making sure that the right individual is presenting a document in front of the camera.
What Is Video KYC?
Video KYC is executing the identification process through a live video call. It is a credible method that limits fraud and enables an effective method of onboarding a customer. It is a quick and user-friendly procedure where a KYC professional helps with customer onboarding and performs the identity verification procedure.
FinTech firms have found video KYC to be extremely secure and reliable for accumulating a clean customer base. In addition, this method also supports AML/KYC compliance. During the process, the user or customer is guided in real-time and are requested to present the relevant document to the camera so they can be verified. The KYC expert also asks some question, similar to an in-person KYC screening.
Video KYC facilitates a real interaction between a firm and the online customers for identification and verification processes. As the conversation begins, the KYC expert will closely note the customer behavior. By leveraging facial recognition technology, they perform the liveness detection step.
Cooperative audit comes after video KYC, following which the accounts are opened and become operational. The banks are required to run an audit for system security whereas the KYC application gets saved in a video. The account is opened following information verification. A cooperative audit ensures that only authorized customers can join the financial infrastructure. The application is declined as soon as a fraudulent element is discovered.
Securing Digital Payments
Never underestimate the sophistication and innovation of hackers. They carry fake identifies to engage in malicious activities on the Internet. When real identities get stolen along with victim’s other information, many cybercriminals attempt to deceive the process of online identification.
Video KYC serves as a defense tool that prevents negative actors from participating in the system. It is the responsibility of the digital currency service providers and other authorities like crypto companies to enforce customer verification before the onboarding process. Video KYC allows ICO providers and financial sectors to implement a comprehensive KYC process.
The cryptocurrency-based businesses need a certain degree of transparency in their systems, as dictated by the regulatory standards. The solution is to use the digital medium for the customer identity verification, by going ahead with video identification of customers. Here document verification and liveness detection of the customer is duly performed. Hence, it empowers stakeholders to leverage on-spot video KYC for mitigating terrorist financing, money laundering, and other financial risks.
Here is how video KYC works.
- The customer is required to fill an online registration form on the given website.
- When registration ends, a KYC expert initiates communication with the customers to begin the live identity verification session.
- The expert guides the customer about how the identification process works.
- The liveness detection is performed to verify the customer’s physical presence. To ensure that no human error occurs, video KYC uses facial recognition technology to verify the physical presence of customers.
- Consent is taken from the customer by the KYC expert so their data is collected for identification. Without their consent, the process cannot go ahead.
- The customer is requested to present their ID document—it can be a driving license, passport, or an ID card.
- The expert asks the customer to show both sides—front and back—of their documents. They have to tilt it against the camera until the holograms can be spotted for authentication purposes.
- KYC experts undergo extensive training that allows them to pick out any spoofing element from documents. Also, they evaluate the body language and behavior of customers.
- After both the physical and document verification is performed, the video identification process is finished.
Why Video KYC Is Good for FinTech Businesses?
FinTech companies can ensure that regulatory compliance is maintained for customer experience and digital security. Here are the advantages offered by video KYC.
Video identification is cost-effective and quick, allowing FinTech companies to proceed with digital identity verification of their customers smoothly.
Enhances Digital Security
Video KYC reduces the risk of bad actors and fraud that often depend on tampered documents and fake credentials. The human body language is checked properly by video identification, verifying the information to block digital scams.
FinTech companies can use video identification to address the requirements posed by regulatory authorities to stop financial crimes.
Benefits of Video KYC
Online customers can benefit from video KYC in the following ways.
Quicker Identity Verification
Digital identification from video substitutes a customer’s need of physical visiting the bank for KYC verification. Therefore, it is faster and convenient for customers.
Enhanced Customer Experience
Customers can show their identity documents in front of the camera view to verify their identities and respond to mandatory or optional questions from the KYC experts. All of this adds to an improved customer experience
The FinTech companies are being revolutionized with some terrific digital services, increasing customer engagement and satisfaction.
If you want to implement a similar solution at your workplace, then send us a message for more details.