Studies show that common customers always choose those businesses that provide speed. But this is not true for all the customers, some also require security. It also depends on the type and scope of business. For instance, an insecure static website is ok because it does not have users’ data, but not an online bank. The reason behind this is that banks deal with customers’ personal and financial data. They trade with funds, that’s why they possess the foremost risk of fraud and other crimes (financial crimes).
To secure customers’ data and safeguarding their accounts financial institutions are obliged to verify all customers. The purpose of verification is to administer legitimate customers only. If a business can do so, it will have the most solid security in the market. The problem starts when a criminal joins a business platform. He then starts his illegal practices there, like stealing other customers’ funds. When a business blocks the entrance of any fraudster or scammer, the chances of prohibited practice also drop. Protecting customers is the duty of businesses under KYC and AML regulations.
Know your customer is the identity verification of customers before giving them access to any service. Global financial regulators have mandated all the businesses under their umbrella to verify their customers. Businesses can also be fined or banned over weak compliance with KYC and AML regulations.
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KYC is like a traditional verification process for bank account opening. The customer goes to the bank office, presents his documents, and the employee manually verifies the customer. He checks his documents and records the results. Then these results are analyzed by the team and a customer is allowed to open an account. This process is long and erroneous. Being performed by humans and has a high rate of mistakes and often takes two to three days. This tedious process is not acceptable in this fast-moving world. Now customers do not wait for delays, they want a robust and quick method.
E-KYC or online identity verification is the solution to this problem. This is conducted by AI-powered software remotely. The customer does not need to visit an office building for this. He can get himself verified by staying at home or office using a mobile phone or PC. He just needs a strong internet connection. The customer just has to upload some images (id and selfie) to the online software. The personal details are confirmed by validating the document. For this goal, documents approved by the government are accepted only.
The process is the same as the traditional verification along with online ease additionally. Online KYC is a comprehensive process that involves document verification and biometric authentication.
Anti-money laundering is the collection of practices to curb money laundering. Financial institutions are used for the conversion of black money into white. Money laundering is a major crime in the finance sector. Money launderers choose a business that can place, circulate and extract their illegal cash easily. That’s why they target the finance sector. They put their illegal funds in the system and then cover it with several layers. They blend black and white money, and it becomes very difficult to separate them. Money laundering creates distortions in the system by encouraging illegal sources of income.
Businesses have to screen their customers against AML watchlists. By screening customers and knowing their risk level, a business can have a safe environment. Now the screening is also done by software like KYC.
Businesses can stay compliant with KYC and AML regulations using automated and robust solutions. They will verify and screen their customers in real-time also giving the results in seconds. It fulfills both demands of customers i.e. security and speed. The process is frictionless and user-friendly which gives more convenience to the customer.
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