For years, the banking, financial service, and insurance (BFSI) industry has developed Know Your Customer (KYC) procedures to ensure the utmost security for customers and their valued assets. Most recently, electronic Know Your Customer (eKYC) technology has enhanced digital onboarding and identity verification processes within these industries.
These advancements include FaceMe® eKYC, which works to prevent payment fraud, deter financial crime, enhance customer identification and authentication processes, and create a more secure digital onboarding process for new customers using AI-enhanced facial recognition technology.
What is KYC Verification?
Know Your Customer (KYC), or Know Your Client, is a mandatory process in the BFSI industry used to verify customer identity and ensure the user is who they say they are. KYC also helps prevent the user from participating in fraud, money laundering, or, in some cases, forms of terrorism.
The KYC verification process is now mandatory for financial institutions, and it is used both when a customer opens a new account and throughout the account's lifetime. Rather than one-time use, the KYC procedure is repeated periodically to help ensure the account is still in use by the authorized user(s). This repetition protects the personal identity and assets of account holders.
What is the KYC Verification Process?
Source : Thales (https://www.thalesgroup.com/en)
The KYC verification process is sometimes described as the client onboarding process. From the client's perspective, users start the KYC verification process when they submit an identity verification request. The user must provide several interlinking documents that include their name and other commonly requested personal information to prove their identity, such as their current address, birthdate, birthplace, and more.
Additional documents like a passport or driver's license may be requested, such as recent utility bills and other commercial documents that validate the provided information. This documentation ensures that the onboarding customer is who they say they are. It also helps provide a more well-rounded customer profile.
The KYC process benefits both the business and its customers. Opting into providing KYC processes gives customers peace of mind, as they offer more security to customer accounts and make it much more difficult for fraud to occur. Most developed nations require BFSI businesses to provide this additional level of security, and the company may face penalties if they do not comply with KYC and anti-money laundering regulations.
KYC reduces the likelihood of identity theft and the problems customers face due to having their identity stolen. The process helps safeguard user information from unauthorized users and acts as a protective measure for a customer's valued assets.
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eKYC is "Electronic Know Your Customer," an enhanced digital KYC verification process. It speeds up traditional customer onboarding via document imaging and electronic transfers and ensures accurate security measures through electronic, computational, and biometric techniques for user identification.
The traditional KYC process sometimes comes with a waiting period between user sign-up and the actual use of the BFSI product or service. This period can cause customers to abandon use of the system. eKYC processes create a more efficient digital onboarding process that further strengthens online identity verification. Because eKYC processes the uploaded documents and immediately goes through a facial recognition and 1:1 identity verification process, customers can use their accounts immediately.
Generali Vietnam Life Insurance implemented eKYC for an accurate and easy-to-use digital onboarding system. It integrated CyberLink's FaceMe® SDK into its customer onboarding process, which helped customers register with facial recognition and eKYC identity verification. By adopting eKYC according to Vietnam BFSI regulations, Generali created a more transparent process between customers and the company while increasing customer accuracy, efficiency, security, and support.
Additional benefits of eKYC include:
Higher safety, efficiency, and security levels for KYC implementations in financial institutions.
Greater protection from identity theft across BFSI operations.
Reducing costs with paperless management systems and more efficient digital onboarding solutions.
Simpler remote onboarding that promotes account integrity.
Increased enrollment speed, customer satisfaction, and customer loyalty.
Facial Recognition eKYC: Streamlining the Online Customer Onboarding Process
eKYC has some biometric verification options, including fingerprint, iris, and facial recognition. Facial recognition is one of the most practical options available, as it is easy to use, quick, hygienic, and available in remote environments.
Ease-of-use and speed : With facial recognition technology now integrated into the eKYC process, customers no longer need to visit banks in person to verify their identity. Instead, users can verify their identity from the comfort of their homes using a web browser or app on their phones. Facial recognition eKYC has helped speed up the process of information cross-checks and has reduced verification errors commonly made by humans. Additionally, eKYC facial recognition requires no special hardware, equipment, or cameras to work.
Hygienic and remote : With facial recognition, users no longer need to touch a physical surface to verify their identity. Fingerprint recognition, touchpads, and even going to a physical location, like a bank, require customers to touch the same surface as hundreds or thousands of others. Smart BFSI systems like eKYC digital onboarding allow users to validate their identity without contact with others, reducing the spread of germs and promoting user comfort.
Facial recognition technology solutions, such as CyberLink's FaceMe®, have become a popular choice for eKYC's biometric verification processes due to the additional benefits they have over KYC processes. Companies choosing facial recognition as their eKYC solution continue to grow.
How Facial Recognition eKYC Works: Banking, Brokerage, and Insurance Industries
Like the traditional KYC process, the eKYC system begins when a customer submits a request that requires identity verification, such as opening a bank account or applying for a loan. By using eKYC, customers can verify their identity quickly with their smart devices and approved forms of government-issued identification. The process continues when the customer downloads the company's app and moves through registration.
Identity verification software and credit check agencies process the data, and the customer can use their account within minutes. Some banks will even provide a digital version of the customer's debit card, which they can use almost immediately after account activation while they wait for their physical card to arrive in the mail.
Although KYC has helped secure customer and financial institution information, eKYC has replaced the traditional KYC system. Because eKYC is digital, remote, and faster, it comes with increased convenience and security for both customers and companies. Its major advantages over traditional KYC include:
A simpler remote digital onboarding process with identity validation saves time and reduces the need for on-site visits.
An instantaneous, paperless, and cost-effective account opening process that benefits the customer and the business.
Increased protection from identity theft across BFSI operations.
Greater customer satisfaction and convenience result from allowing customers to create and secure their personal information from the comfort of their homes.
eKYC allows for a safer and more robust biometric verification system, and eKYC powered by facial recognition technology shows no signs of slowing down. These processes implement secure identity recognition for both consumers and BFSI industry participants. Trends indicate that eKYC verification will become more prevalent in streamlining insurance, loan, and credit card applications in the future.
Facial recognition is a biometric technology that references an array of facial variables like nose depth and width, forehead length, and eye shape to correctly recognize an enrolled individual. The combination of these variables is unique for every person, much like a fingerprint, and by using AI-based technology, the facial recognition process is now faster, more reliable, and more accurate than ever before.
Although previously, facial recognition software could be fooled by photos, facial recognition systems like CyberLink’s FaceMe have developed so much so that facial recognition software can no longer be fooled by a photo. The technology leverages multiple layers of anti-spoofing technology, making it almost impossible to fool a camera and ensuring that the individual in front of the camera is a living human being and exactly who they claim to be. Depending on the camera, FaceMe will employ 2D and/or 3D visual anti-spoofing technology – so it can’t be fooled with a printed photo, a video of someone on a tablet, a mannequin, etc.
Yes, facial recognition systems now recognize individuals even when they are wearing masks or other protective/safety headgear (goggle, helmets,etc.) required by their work. CyberLink’s FaceMe can even detect the correct wearing of a mask and quickly authenticate an enrolled individual with an accuracy rate of 98%. Learn more about FaceMe SDK.
The majority of KYC verification users are in the banking, financial service, and insurance (BFSI) industry, partly due to the sensitivity of the individual’s personal information. In addition to this, many governments and regulators require KYC processes and other stringent security measures for BFSI businesses that deter theft and fraud. However, KYC verification has also been implemented now by other organizations that help with consumer protection and anti-money laundering (AML) standards in many countries. Learn more about FaceMe Fintech.
Modern AI-infused facial recognition is incredibly accurate. Besides being smart, secure, and fast, FaceMe is top-ranked globally in the USA’s NIST FVRT 1:1 (verification) & 1:N (authentication) benchmarks with 99.81% accuracy. These scores are some of the top scores for facial recognition technology available in the world. Moreover, FaceMe has a <0.000001 false acceptance rate; the chance of incorrectly authenticating an individual is extremely low. The technology offers a higher level of access control management for restricted areas, ensuring only verified personnel can enter, thereby reducing the risks of property theft or damage. With its 100% anti-spoofing technology, and ability to recognize a face in a matter of milliseconds, AI facial recognition technology has become one of the best biometric security solutions available today.
