KYC for Banks an Essential Requirement for Online Services

Did you know that Identity Theft is still one of the most occurring frauds? You would wonder given all the technological improvement that such an issue would be a thing of the past. The solutions are there in the form of Know Your Customer systems; the problem is that people are not aware of them and/or businesses really don’t care. People should push organisations especially banks to opt for KYC for banks solutions.  The following hypothetical situation will give you an example; why it is important to have such solutions in place especially where online services are concerned.

Imagine this you work a double shift, you pay your taxes and work hard to provide for your family. You also try to save up for sending your children to college. You read about an article mentioning that identity theft is on the rise especially where online services are provided. It encourages people to talk to the companies and organisations that manage their finances regarding KYC solutions to counter the growing threat.  Your mind goes back to where you received an email from your bank mentioning that now it was offering online account opening service besides the account management system. You really don’t give it much thought and shrug it off thinking it couldn’t happen to you. A couple of months pass by and you receive your bank statement and everything looks alright. As you can scan through it you see a mention of a second bank account. You immediately call your bank and inquire about it. To your surprise, they tell you that a month ago you had opened an online account in another branch of theirs and had made several monetary transfers outside the country.  Alarmed, you tell them you did not open any second account and that this must be a mistake. You tell them that you haven’t received any emails or anything that would inform you of this account except for your account statement for your original account. You tell them that your identity has been stolen and that you will have your lawyer dispute this and take up the issue. You ask the bank representative don’t you have any KYC solutions that verify identity during such remote processes. They say they have them but not on their online services. You curse yourself for not asking such details and sigh thinking about the trouble of disputing the issue and the expensive lawyer fees.

KYC solution

How Can an Online KYC for Banks Solution Be Useful?

Banks and other financial institutions already have a Know Your Customer solution implemented when a customer walks in and asks to open an account. The bank representative then takes down all the required information from the customer, including job/business, sources of income. The bank also asks for proof of the provided the form of documents and copies of ID. When this is done as online services it gets a bit tricky given that the person applying is not physically present and the documents submitted can easily be forged ones. Hence, a smart KYC for banks solution is required that can actually verify that the provided documents as well as the person are the real deal. The smart online KYC solution is usually provided by 3rd party service providers. The system is based on an advanced AI that carries out all the verifications and scanning tasks and sometimes HI (Human Intelligence) is also implemented to authenticate the given result. If we look at it this system, it can prevent the use of a stolen identity as it will verify the person as well as check the documents for tampering and forgery. Given the above hypothetical situation, such a system would have been quite useful had the bank opted for it.

Well then, How Does the Smart KYC For Banks Work?

The online KYC for banks system uses the Internet, a webcam or a smartphone camera to carry out the verifications. Let’s take for example online services for opening a bank account. When a customer has filled out all the requirements and submitted the documents. The system kicks in and asks the customer to face his webcam. The system checks for such things as excessive make up, masks or the presentation of a picture instead of a live person. If the customer does not have a webcam, the system can utilize the camera of their smartphone to carry out the verification process. Then the person is asked to show their ID, the ID is checked for signs of tampering or forgery through hologram checking. The person is asked to focus on the picture on the card, the name, DOB and address. The face on the picture is matched with that of the customer and the details with that of the provided ones. The system at the same time does a background check of the person against global watchlists regarding terrorist organisations and money laundering. If everything is clear the system lets the customer proceed otherwise the process is halted.

In Conclusion

If we look at it in reference to the given example. If such a system had been implemented by the bank. The perpetrator would have run off at the time he was asked to face the camera. As he probably would not be expecting it and would not have any work around option for the system. If effectively implement it could save a lot of time and money as well as deter identity thefts.