During the pandemic, WHO declared that people follow social distancing guidelines to stop the spread of the virus, motivating financial institutions to connect with clients through digital means. In this light, companies performed identity verifications online and offered services digitally. The challenges of the post-pandemic world are different because the risk of fraud is still there. Financial institutions want to use innovative digital solutions that can discourage external attacks and protect user data from exploitation. Thereupon, Video KYC services can help the sector in its goals.
Video KYC Solution: A Quick Overview
Vide-based ID verification services are a foolproof method of fraud prevention that connects an expert with a new customer. This approach validates user documents during the live video call session. During the meeting, the professional asks clients to show their government-issued records to complete the validation procedure.The KYC professional guides the new client through the whole interview and asks them to present ID cards or passports as proof of identity. Moreover, the KYC expert asks some basic questions from the client and monitors body language to detect any bad actors and discourage fraud attempts.
Understanding the Guidelines for Video KYC Solution
All businesses must follow the below-mentioned standards while using a video ID verification procedure for clients:
- Recording video & capturing live photos of the new client
- Storing mages of government-issued ID records
- Cross-checking the user photo with the image on the ID documents
- Matching details on the ID file with the given information on the form
- Employing the latest AI & Face Recognition Technology (FRT)
- Recording video and saving it with an accurate date or timestamp
- Identifying identity by ensuring the live presence of customers
Top 6 Perks of Implementing Video KYC system
Video-based ID validation is an advanced approach to prevent spoof attacks. Utilizing a video identity validation system has 6 remarkable advantages for modern-day corporations, which are below:
Ensuring Real-Time Fraud Prevention
Instant fraud prevention is an attractive perk of using video KYC verification. With support from AI models, present-day corporations can mitigate ID fraud cases and streamline business operations.The state-of-the-art Video KYC solutions offer unbeatable security as compared to traditional approaches. Cutting-edge technology is more secure than image-based ID checks, discouraging fake video attempts by asking several questions to the user. The expert can also ask the new client to perform certain actions. Hence, the progressive approach also facilitates compliance with international standards to avoid fines.
Mitigating Money Laundering Cases
The video KYC solution attracts genuine customers from around the world. By conducting thorough background checks and interviews, experts can ensure that bad actors are not entering the company data servers. The AI algorithms also cross-check the data in global watchlists and PEP listicles to fight money laundering actively.The application of Video KYC solutions adds multiple layers of security to streamline onboarding processes and discourage spoof attacks. A combination of video-based systems with other AI-driven solutions can be a powerful defense mechanism against money laundering and terrorism financing risks.
Reducing Paperwork
The implementation of video KYC solutions streamlines the verification procedure and helps companies forgo paperwork and traditional approaches.
Eliminating Human Errors
With support from Artificial Intelligence & Machine Learning (AI & ML) algorithms, the software ensures high-accuracy rates. Hence, there is no human involvement needed which eliminates such mistakes in the output.
Facilitating Customer Retention
The implementation of video KYC helps present-day corporations ensure customer retention by streamlining the onboarding process. Thereupon, this approach reduces drop-off rates that are common because of outdated approaches.
Offering a Positive Customer Experience
Utilizing video KYC modernizes the verification process by reducing multiple steps from the procedure. A slow onboarding experience results in feelings of frustration, motivating customers to shift companies for a better experience.With a video-based ID verification approach, customers can easily verify their identities by displaying government-issued records before a web camera. The expert also asks some questions during the interview to catch any bad actors from entering the company. When the whole procedure is complete, the customer receives the final verification results. According to Globe Newswire, the video KYC market size will reach around 863 million dollars by 2030, showing a CAGR of 16.97%. Hence, the market potential and transformative powers of cutting-edge technology cannot be underestimated.
Final Thoughts
Performing ID verification during the onboarding process is a requirement that all financial institutions must fulfill. With the arrival of innovative digital solutions, the application of advanced validation services mitigates the risk of money laundering and terrorism financing. Working with a third-party service provider can help financial firms streamline their daily operations and ensure a positive experience for clients. Cutting-edge video KYC services offer unbeatable security with instant verification during the onboarding procedure.
