Video KYC of Client
The due diligence process is not restricted to paper-based documentation nowadays. Like other innovative evolutions, identity verification is also upgraded with the incorporation of new technology. Video verification is one of those developments. Video verification is a process of customer verification in which the client is identified through a video call carried out by a KYC representative of a legal governing body. In this call, the customer is asked to submit digital documents for proofing purposes.
Advantages of Video KYC
Video KYC is Cost-Effective
Traditional KYC is used to identify a customer requiring the physical presence and the long duration of the process may cause the customer to show exhaustion. It will lead the customer to leave the process incomplete. It not only wastes the time of financial institutions but also, diminishes the quality of customer experience, which may lead to reluctance towards verification posing risks for banks in the future.
Contrary to that Video verification is comparatively cost-effective because it does not bound a customer to appear for the procedure to be completed. Instead, he can digitally verify himself using video KYC by providing ID proofs remotely.
Video-based Customer Identification Prevents Spoof Attacks
The rise of technological breakthroughs has improvised the processes on one end, but it has changed the approach of fraudsters as well. Identity thieves are well aware of the AI technologies used for identity verification. So, they easily dodge the systems and fulfill their indecent desires. IDV solution providers have come up with competitive techniques to overcome this risk of being fooled. That is why they have started to introduce a mixed version of AI and HI-supported ID Verification system.
In this new technology, the person is not only verified with the help of artificial intelligence but also, a human is responsible to cross-verify the provided facial recognition or the digital documents. In this way, dual authentication is performed to eliminate any possible chances of identity theft.
KYC Video Verification Discourages Synthetic Identity Theft
Synthetic identity theft is a malignant practice adopted by fraudsters. They combine real genuine information with fake information to create deception. This ID theft is hard to detect in traditional KYC. In video verification, these kinds of frauds are easily identified which makes it competitive to be used against the rising crimes
KYC Video Verification and Money Laundering
Video KYC can prove to be a dynamic tool to fight against money laundering. It allows verifying an entity with the assurance of liveness detection, facial recognition, and skin texture analysis. Thorough background checks strengthen the probability that the client is not a suspect on any watch list.
Video KYC Regulations in Different Countries
Germany
In 2017, it was deemed to be mandatory for the bank employees to perform video KYC. they were provided proper training to complete this verification process. It was introduced by BaFin to discourage the practices of money laundering
Spain
It is legally demanded by the financial intelligence unit of Spain that the banks in that region perform video KYC in the case of non-presence of customers. In case of violation, they are subjected to punishment in the form of a penalty.
Portugal
Some legal bodies that are performing the KYC process here include The Bank of Portuguese, The Bank of Portugal, and the Portuguese Securities Market Commission. However, video KYC is not compulsory in this region but is practiced by banks as it improves compliance with FATF. It promotes safety in the country.
Video KYC Remote Verification
The emergence of COVID has shifted companies to online mediums for business purposes. This online shift has given birth to various suspicious activities like ghost employees entering an organization. Remote working has compromised the information security of companies as fraudsters are gaining unauthorized access to critical details. Video KYC has proved to be a vital tool in this regard because employers can identify individuals faking to be employees in online working conditions.
In addition to remote working, video KYC is also acknowledged in other industries including car rental services, real estate businesses involving digital documentation, insurance companies, and companies dealing in crypto and payment modes. Video KYC is widely adopted because of its salient features that help to strengthen the accuracy of the ID verification process
Video KYC Process
Final Thoughts
Increased awareness regarding the prevalence of fraud has drawn considerable attention to the risks attached to it. It has ultimately given new opportunities to IDV solution providers to bring competent technologies that can win the battle against sophisticated hi-tech scammers and fraudsters. Video KYC is one of those fruitful solutions added to the safety measures of the verification process. It has minimized the time cost, energy cost, and financial cost which has contributed altogether to the improved efficiency and effectiveness of the security system on a macro-level.
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