In today’s fast-paced digital world, verifying customer identities has become easier thanks to eKYC solutions. Previously, this process involved lengthy paperwork and manual checks which resulted in delays and frustrations for both businesses and customers.
But after the eKYC introduction the process became easier. Businesses can now seamlessly verify identities online using eKYC solutions. Using eKYC, you will not only prevent financial crimes but also meet customers’ expectations.
eKYC employs advanced technology to make the whole identity verification process faster, more flexible, and reliable. It’s like upgrading from an old, slow system to a new, faster one.
This article explores how eKYC is transforming the way businesses verify identities and why it’s such a big deal in today’s digital age.
What is eKYC?
eKYC or “Electronic Know Your Customer”, is a digital procedure to verify the identity of customers. It is used by government-regulated businesses to combat identity theft, fraud, and money laundering. Instead of filling out paper forms, eKYC checks your details electronically.
The importance of embracing eKYC solutions
In today’s tech-savvy world, cybercriminals are becoming more proficient, posing a significant threat to businesses as well as customers.
The Growing Threat of Fraud
- According to Javelin Research & Strategy, identity fraud reached a staggering $52 billion in losses, affecting millions of consumers.
- Signifyd’s “State of Fraud 2023” report predicts e-commerce fraud to hit $206.8 billion in 2023 alone.
- The LexisNexis Risk Solutions True Cost of Fraud Study indicates a 22.4% increase in fraud costs for U.S. and Canadian financial firms since 2020.
eKYC is a robust barrier against identity and other forms of fraud. By using a secure and convenient identity verification process, eKYC provides businesses with the assurance that they are onboarding genuine customers while keeping scammers out.
The essential role of eKYC in the modern world
In the current digital era, adoption of eKYC solutions is not just a trend but it has become most important for businesses to succeed. eKYC offers a streamlined way of identity verification that aligns with the expectations of modern customers.
The shift towards digitalization has become stronger, especially in the wake of the global pandemic COVID-19. Many businesses shifted to online platforms, and with that came the need for better identity verification to tackle the rise in fraud cases. eKYC, powered by artificial intelligence and automation, presents a compelling solution to address these evolving needs.
eKYC can easily handle a larger volume of verifications without losing accuracy or speed due to its scalability. It makes life easier for businesses by automating tasks and using technology to gather and analyze customer data. Hence, less manual work, fewer mistakes, and more time and resources for other important operations.
Adapting to eKYC isn’t just about staying up to date but it’s about making things smoother and more efficient for everyone involved.
What are the verification options with eKYC?
eKYC offers different options tailored to your situation and requirements. eKYC uses Optical Character Recognition (OCR) technology, to analyze and validate data using biometric information. Below are the two main methods for digital KYC:
1. Video-based eKYC
In this method, you can verify the customer remotely through a video call. During the process, identity proof, driving card, address proof, bank statement, and even a physical signature on plain white paper are cross-checked and authenticated. It’s a quick process, taking only 5 minutes, and can be completed online without the physical presence of customers.
2. Image-based eKYC
In image-based eKYC, a customer’s image is compared across various documents to ensure consistency and accuracy in verification.
By offering these flexible eKYC options, you can enhance security and efficiency in today’s competitive era.
How does eKYC simplify identity verification?
For identity verification, eKYC employs smart methods to streamline the process:
Biometrics
Users no longer need to remember numerous passwords thanks to voice or facial recognition technology. The same is seamlessly handled by smartphone cameras.
Document Recognition
Users can upload official documents like passports or birth certificates using smartphone cameras. Facial recognition software ensures accurate matching with the ID photo.
Two-Factor Authentication
To reduce the danger of identity fraud, enhanced security measures ask users to confirm transactions with a second token or through various accessible channels.
One-Time Passwords (OTP)
OTPs add an extra layer of security. They are valid for only one use, making it challenging for identity thieves to access accounts without authorization.
Trusted Data Sources
Electronic identity verification (EIV) systems cross-reference details against government registries, databases, and official sanction lists for identity verification.
Hence, eKYC solutions offer smooth and efficient identity verification experiences, ensuring security and peace of mind for business operations.
Why your business must conduct eKYC?
In today’s digital landscape, cybercrime is projected to soar to $10.5 trillion annually by 2025, These concerning statistics highlight the urgent need for robust security measures, particularly in customer enrollment processes.
Reduce the risk of identity fraud
By integrating eKYC identity verification into your customer onboarding procedures, you can protect your business and your customers from the devastating impacts of fraud. Identity fraud not only costs money, but it also harms a company’s reputation, resulting in decreased clientele as well as substantial market share losses.
Regulatory Compliance and Cost Mitigation
eKYC assists you in achieving compliance standards and avoiding hefty fines and penalties. Moreover, it reflects your firm’s commitment to safeguarding customer accounts and data, resulting in stronger relationships built on trust and security.
Enhancing Customer Relationships
Using biometric technology provides a smooth and frictionless experience by streamlining the often tedious process of verifying customers’ identities. With eKYC, your company not only protects itself from financial losses but also bolsters its reputation as a trusted guardian of customer security and privacy.
How eKYC is revolutionizing industries?
Industries worldwide are embracing eKYC solutions, getting various applications for improved customer interactions.
Banking and Finance: Simplifies account openings, loans, and transactions while thwarting fraud.
Telecommunications: Speeds up SIM registrations and phone activations for a smoother process.
Insurance: Simplifies policy verification and claims processing, ensuring accuracy.
E-Commerce: Verifies sellers and buyers, enhancing trust and speeding up transactions.
Healthcare: Eases patient registration and medical record-keeping, improving efficiency.
Tourism: Speeds up ticket sales, room bookings, and check-ins for seamless experiences.
Government Agencies: Enables biometric verification and benefits registration, enhancing accessibility.
Conclusion
eKYC is not just about technology, it’s about revolutionizing how businesses connect with customers. It not only boosts security but also enhances user experience, marking a significant step forward in the digital transformation journey. In a nutshell, eKYC sets the stage for a digital future where efficiency and security go hand in hand.