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KYC Verification – Reducing the Risk of Financial Fraud 

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Verification is a term that has been around for centuries to describe the procedure of establishing the reality or existence of something. Trying to differentiate between the roughly 7.98 billion individuals on earth who has a distinct identity—is essential for efficient operations in all companies. KYC verification services serve the purpose as they help firms authenticate any individual before onboarding them.

What is ?

The need for KYC (Know Your Customer) solutions has increased as a result of the surge in financial and digital fraud. Every organization that handles money, including banks and governmental agencies, needs to follow KYC laws. Simply said, the procedure entails taking selfies to identify people’s faces and comparing them with the firms’ databases. The three primary steps of the KYC verification process are:

1. Customer Identification

In order to do a client KYC verification, it is necessary to examine their data for anomalies. Histories of potential clients are examined to determine if they have any government connections and whether they’ve engaged in any illegal activity.

2. Customer Due Diligence(CDD)

CDD is a thorough investigation of the past to identify any potential risks. The two primary warning signs to watch out for are a history of funding terrorism and money laundering. Via anti-money laundering technologies, a firm can deter economic fraud.

3. Enhanced Due Diligence(EDD)

The procedure of Enhanced Due Diligence (EDD) verifies the risk connected with consumers in accordance with KYC and AML rules. It carefully checks the account information of a client in cases of suspicious records. As a result, it gathers a lot of information and evaluates it in an effort to prevent a firm from high-risk profiles.

What is AML Monitoring?

Money laundering is an issue that comes to mind while discussing the dangers of false names. Law enforcement authorities now demand that firms provide the required safeguards to thwart money laundering attempts by integrating AML Screening practices into their platforms.

AML systems give businesses the ability to check consumers for previous involvement in money laundering and associated crimes. If a business does not double-check its clients, they run the risk of unintentionally supporting terrorist activity. The organizations who do get engaged in such dubious conduct must pay a lot of money because there are always worldwide watchdogs keeping a close eye on it.

Methods to Conduct KYC Verification

Face Recognition

Face recognition uses liveness detection to check that a client doesn’t use a phony or altered video or picture. Before transforming the acquired image into information and determining a match, the camera recognizes and analyses the face. Smartphones utilize face recognition to protect them and to access specific info. Additionally, businesses use it to maintain a secure work atmosphere and for payments and other transactions.

Document Verification

The document verification process, which is a component of a KYC process, authenticates clients’ ID documents in order to confirm their identity. It detects the document, retrieves the information, and compares it to the user’s database. If a business does not double-check its clients, they run the risk of exploitation by fraudsters.

Address Verification

Address verification, a component of KYC verification services, functions similarly by verifying the user’s permanent residence. In order to get a user’s exact location and compare it with the information on their ID cards, it uses template matching. With this, a firm can check if the document is fake or photo-shopped.

Applications of KYC Services

  • Banking

The standard practice when creating bank accounts is to collect consumer data. Online KYC services currently run this procedure. Customers must provide enough information; they cannot simply fill out forms and supply data as they choose. The process begins with a simple selfie and a face-to-record comparison before checking the transaction history for questionable information.

  • Healthcare

Inaccurate information has reportedly been one of the top patient complaints. In the healthcare industry, incorrectly completed paperwork can have serious ramifications for patients as well as the administration. As a result, KYC verification services when used in place of traditional record-keeping services ensure that records are kept securely.

Final Thoughts

KYC verification services are effective and an essential security safeguard in the modern world. Cybercrime and other related offenses are much less likely to occur when consumers are onboarded safely. In order to get a user’s actual location and compare it to the information on their ID cards, template-matching technologies and artificial intelligence are used. They proved fruitful to tackle fraudulent activities these days.