Criminal cases are rising in this era of digitization. This is why video KYC has become a pressing need to safeguard companies from any kinds of crimes and fraud.
As technology is advancing, so do businesses. Companies are rapidly going digital to enjoy the perks of the modern age. Unfortunately, digitization has made them more prone to fraudulent activities. With the technological evolution, fraudsters have also revise their techniques to carry out heinous crimes. They are leaving no stone unturns to bypass verification solutions and exploit different sectors for their illicit intentions. This has led to the need for robust verification solutions among which video KYC is the one. It verifies the identity of the client through a video call and is more advanced as compared to the old KYC procedure.
Video KYC vs Conventional KYC
Know your client is a method for confirming a customer’s identification and it identifies any potential risks that link with the customer. The financial sector and other institutions which deal with money should comply with KYC and AML rules. Traditionally, businesses have used a physical customer identification program to authenticate a customer’s identity during the onboarding process. It may take weeks and forces, customers, to stop the procedure.
Video KYC verification is the more advanced type of conventional KYC verification solution and is more quick, secure, and economical. It replaces paperwork with real-time results, improving the entire identity verification. To create an account, clients do not have to visit the bank in person and show their identity documents. All operate remotely, from sign-up to onboarding.
Sectors Benerfitting from Video KYC Solution
Below are some of the sectors that could benefit from advanced video verification.
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Financial Firms
Due to the nature of the business, banks and other financial sectors are under great observation of the regulatory authorities. Complying with KYC/AML guidelines while customer onboarding has been made obligatory for them. Manual verification is no far an option. Thus, video identification is a great bet that helps them onboard legitimate clients and that too in real-time while adhering to the global regulations.
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Payment Industry
As the sector deals with other industry players, thus conducting proper diligence has been necessary for them to avoid any financial crimes including money laundering. Furthermore, with the devel oof AMLD5, the sector also comes under those entities that are required to carry out the KYC process. Thus, a video check is a great choice that helps the industry safeguard transactions from money launderers and other criminals.
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Insurance Providers
One of the major sectors that criminal exploits the most is the insurance company. Fraudsters use stolen identities and phony documents to fulfill their malicious needs. As a result, not only the company owners but their precious clients get deprived of their rights due to such illicit activities. With KYC video identification, the company can check that only authenticated individuals are entering their premises and getting their services.
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Remote Firms
Since the covid outbreak, businesses have gone digital. Fraudsters taking advantage of the situation are exploiting the remote companies badly. They are accessing the company’s data without permission and using it for their nefarious purposes. Remote firms can counter all such fraudulent activities with video-based KYC. It is a great service that hires only genuine clients and confirms that only approved individuals can get access to their services.
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Non-Banking Financial Companies
NBFCs are just like the banking sector except that they do not have any banking license. NBFC forms a customized group of individuals to provide the services. Thus, e-KYC video verification would be a game-changer for the NBFCs. It provides seamless client onboarding and the verification completes within minutes helping the sector onboard more clients at a faster rate.
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Crypto Exchanges
Every sector has been a target of fraudsters and crypto exchanges are not an exception. Scammers are even using the sector to carry out their nefarious activities. Thus, video KYC verification is a great bet for the sector as it helps them ensure that the trading firms with which the company is engaging are not possible fraudsters.
Video Know Your Customer Checklist
- It should provide global coverage with the proper document as well as language support.
- It should reduce the cost of the company’s KYC process while not compromising the client experience.
- It tailors according to the company’s requirements.
- It must offer enterprise-grade security and should provide omnichannel for user engagement.
Final Thoughts
Digitization which helped sectors reap the benefits of the modern world has also made them susceptible to various fraudulent and criminal activities. This is where video KYC comes as a great hope. It not helps different firms to avoid criminal activities but also helps them adhere to the global KYC/AML standards to avoid any hefty fines and penalties. Thus, for all those sectors that haven’t put in place KYC processes, it’s a great time to adopt one now.
