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Technological Advancement and its Influence
The world needs to constantly evolve in order to survive. Like everything on the globe, technology is also evolving with every passing day but with a much swifter pace. It was not long ago when the first aircraft was invented by the Wright brothers in 1903. That was the beginning of an era that fulfilled the dream of mankind to fly. Now, we witness high-tech man-made spaceships flying to space. That is the essence of life – exploring new means to improve the lifestyle of mankind. Every day, companies spend millions of dollars to innovate and build existing inventions, in order to beat their competitors and earn profits. While the majority works for the betterment of others, there are some aiming to disrupt the system and cause damages to the people and the economy.
Cybercriminals Disrupting the Economic System
Criminals have been using their energy, resources and the new technology to develop ways to by-pass the legal standards and rules, causing harm to others for their personal benefits. Since the advent of the internet, criminals and fraudsters have switched to the online platform for their wrongdoings. According to the IC3 Annual Report 2019, financial losses went up to $2.7 billion in 2018. Most financially destructive threats include business email compromises (BEC), investment scams, and romance fraud. The “Ninth Annual Cost of Cybercrime Study” published by Accenture stated that the total amount of cybercrime for every company increased from US$11.7 million in 2017 to a new high of US$13.0 million — an increase of about 12 percent.
These increasing figures are raising the concern of many businesses worldwide. Various global regulators across the globe have collaborated with law enforcement agencies to fight these cybercriminals and scammers. They have devised KYC and AML regulations to help businesses and financial institutions in identifying their customers with accuracy. KYC or Know Your Customer regulations are mandatory for banks and other financial institutions due to their nature of dealing with finances. Many other businesses are also increasingly following KYC compliances for their own security and safety.
Customer Onboarding – A Hassle for Modern Businesses
Most businesses understand the importance of KYC regimes and want to implement them in their business practices fro customer onboarding. But unfortunately, due to the long process of customer identification, they are reluctant to adopt them. The customers also do not prefer visiting govt offices and other institutions to get themselves identified as it takes a long time and the process is complicated. But nevertheless, due to the risk of fraudsters and scammers, they are forced to take preventive measures to secure themselves and their clients. Businesses such as banks, financial institutes, government offices, software companies, airports, military buildings, embassies, etc, all require identity verification before onboarding employees and customers.
Electronic KYC – A Means of Swifter Customer Identification
Modern identity verification companies have developed advanced software that conducts E-KYC of individuals effectively. This software is powered by Artificial Intelligence technology that flawlessly analyzes the identification data of customers, establishing that they are actually who they claim to be or not. The software has OCR technology embedded in it, which extracts relevant information from the government-issued documents. It verifies identities within a few seconds and has the capacity to verify individuals from anywhere in the world. This software can work through mobile cameras as well as webcams and can be integrated into websites and applications too. Electronic verification systems verify individuals through a number of techniques. Some of them are listed below:
The use of AI systems to identify and study facial features for verification purposes.
- Digital Document Verification
The use of AI systems to check the authenticity of various government-issued documents to mitigate fraud.
- Digital Address Validation
The use of AI technology to cross-match addresses from the documents to minimize the threat of address manipulation.
- Multi-Factor Authentication
The use of multiple-step verification to increase the protection of your accounts by adding greater security barriers, usually through your mobile phone.
- Digital User-Consent Verification
The use of handwritten user consent to giving access to only legitimate and genuine customers.
Businesses can adopt the technique which is the most suitable according to their requirements and budget.
Future of the Digital Identity Verification
The digital identity verification is becoming a need for businesses in this era. Due to the efficacy of the E-KYC techniques, more and more businesses are incorporating them into their businesses. It is expected that post Coronavirus, people would avoid interacting with others and adopt touchless techniques for identifying and onboarding their employees and customers. Therefore, digital identity verification systems are necessary for businesses that want to secure themselves from imposters and comply with global regulations at the same time.