Know Your Customer (KYC) document verification is a critical process for businesses and financial institutions to guarantee that their customers behave appropriately and by legal regulations. To improve and simplify the KYC verification tech, and document scanning for identity authentication various technologies are deployed. In this article we will discuss some of the most prevalent basic technologies.
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What is KYC Document Verification?
KYC documents are official documents, such as passports or utility bills, that can verify a customer’s identity and residence. In regulated organizations, capturing and verifying KYC documents is a required aspect of consumer due diligence. Customers do identity authentication with KYC documents with their proof of name and proof of address to comply with money laundering legislation. Corporations and other legal structures are subject to similar rules. Individuals may be required to provide additional proof of income when requesting certain products/services.
Many factors influence how document verification works, including your industry and the sort of documents you handle. The document verification procedure, on the other hand, can be broken down into four distinct steps:
- Document collection
- Extraction of data
- Document validation
- Manual verification
KYC Document Verification Technologies
Here are some of the KYC verification tech for document scanning.
Manual Verification
Manual document verification and validation can be accomplished by human experts or stakeholders reviewing, verifying, and testing documents for identity authentication. Documents may be checked for accuracy, completeness, consistency, clarity, and coherence, as well as sources, references, and signatures. Manual document scanning can be time-consuming, costly, and prone to human mistakes; therefore, established procedures, checklists, and standards are advised.
Optical Character Recognition (OCR)
OCR is a KYC verification tech that enables the automatic extraction of data from photographs and documents such as identity cards. OCR document verification technology can be used to extract identifying consumer data and information to validate a person’s identity and see whether they are on a watch list.
Documents such as passports, ID cards, and driver’s licenses can be processed using OCR document scanning. As a result, additional types of identity verification, such as utility bills or bank statements, can be employed. OCR for KYC enables organizations to swiftly validate customer information without the need for manual data entry. OCR authentication services can complete data extraction and processing far faster than people by digitizing this procedure. It eliminates the need for manual data entry, which may be time-consuming and prone to human mistakes. OCR for KYC decreases the time spent on customer data verification, allowing businesses and financial institutions to focus on other aspects of their operations.
Near Field Communication (NFC)
NFC-based identification verification is a far more convenient method of confirming someone’s identity. People can now send identity document details on their cell phones instead of physically entering them. NFC-based document scanning necessitates the inclusion of NFC chips in identity documents. When a chip is presented to an NFC reader, it transfers encrypted wireless data comprising personal information and biometrics for quick and secure authentication. Simply pushing your documents into an NFC-enabled smartphone allows the device to scan and compare important biometric data. This makes document verification considerably easier. The technique is frequently utilized for effective border screening, security zones, and access highways.
Selfie Verification
Users must snap and upload a selfie to be verified. This selfie is then compared to the image on the user’s ID or a previous selfie to verify a good match and that the ID was not simply stolen.
Mobile KYC
The process of validating a person’s identity via a mobile device such as a smartphone is known as mobile KYC. In most cases, mobile KYC is completed using a company’s mobile app or website via a mobile browser. Another current innovation is the use of a mobile camera to scan and upload KYC documents.
Banks and financial service providers seek to deliver a consistent customer experience by enabling KYC to be performed remotely. They only need to use their cell phone camera to upload their identification documents. When compared to physical KYC at a bank branch, this saves time, effort, and money. Mobile KYC is now possible thanks to AI algorithms and identity verification technology such as OCR and MRZ codes.
Finally
While we strive for simplicity, there is no one-size-fits-all strategy for document verification, particularly when it comes to customer identity authentication and onboarding. You must understand where your company operates, what regulatory compliance standards you must meet, and the risk profile of your clients. But don’t worry, the KYC AML guide can assist you in choosing the best onboarding process for your specific needs. To select the best KYC verification tech and solution, take consultancy from the KYC AML guide.