Why KYC Biometric Identification in Banks is the need of the Hour?

Why KYC Biometric Identification in Banks is the need of the Hour?

Know Your Customer regulations for banks has been around for quite some years now but it was only recently that technology was integrated into KYC solutions for banks for better service delivery and enhanced risk assessment. Biometrics has totally changed the way identity verification services work and there are many Digital ID verification software that claims to provide the most flawless biometric service for KYC process steps. But before we discuss the utility of biometric identification, let us discuss why KYC is important at first place and why should banks be considering integrating identity verification services with their banking operations.

 

KYC Solutions for banks

Most of the banking regulators and financial law enforcement agencies require banks to collect personal information of their customers whenever a new bank account is opened. In some countries, identity details have to be provided as well when the transactions exceed a certain limit. This practice is defined as Know Your Customer or simply KYC.  Unfortunately, regulatory guidelines have hardly put forth any mechanism to “actually” check the authenticity of the provided identity information.

Now comes the problem of fraudulent takeover of bank accounts by faking identity of an already account holder. Just last year, complaints of banking account takeover rose by 24% and complaints about credit card account takeover increased by 20%. Now, this was made possible even in banks that had placed some kind of KYC checks to ensure that no person with fake credentials can access accounts of existing customers. Black markets selling personal information of authentic users and frequent data breaches of financial and personal information make these KYC process flow redundant.

 

Rethinking Know Your Customer Checklist

Keeping in perspective the augmented data risk, biometric verification seems to be the ideal form of technology to ensure that not just users with genuine credentials can access bank accounts but also that only genuine users access to bank accounts. Advantages of KYC can only be reaped by a banking organization with the help of a KYC service provider that offers biometric authentications. But only having a digital ID verification software with biometric verification is not going to help sort out the situation. There are various policy decisions and technical aspects that must be considered before settling down on a preferred KYC solution for banks.

 

Biometric Identification for KYC

There are several methods by which biometric authentication can be performed. Fingerprint scan, iris scan, and face verification are all viable options for customer authentication but scalability and speed becomes a great concern while choosing an ideal biometric identification service. Mobile-based banking services create a need for a unified ID verification system that works seamlessly with the in-branch banking operations, mobile users as well as any other digital medium available for accessing banking services.

Now, it is obvious that not all users will be able to have a fingerprint scanner or iris scanner integrated with their desktops and laptops. In fact, a majority of smartphones still lack a reliable fingerprint scanner and there is hardly any smartphone to collect an iris scan and forward it to a KYC service provider. This leaves us with Face verification as the ideal biometric identification method to authenticate Identity of a user. After all, if Facebook can detect and pint point every individual present in an uploaded image, similar technology can be used to authenticate the true identity of an incoming user.

 

KYC via Face Verification

There are many KYC solutions for banks where ID verification is performed by various means. Some check the pattern of identity documents and others performs a comprehensive check of all the security features intrinsic to an official identity document. But a Digital ID verification software that has an added feature to perform Biometric authentication can go a long way in determining financial risk and identify risk attached to an incoming user.

The most authentic method to use Face verification in KYC process steps is by performing liveness detection test. It helps digital ID verification software to make a calculated decision that whether the person performing KYC verification is actually present at the time of verification. Most of the times conducted in Live Verification format, this kind of KYC check ensures that doctored image or a 2D image of a real person is not used to either register an account or gain access to an already existing bank account.

Additional advantages of KYC via face verification means that customers from any part of the world will be able to access their bank account, whether they are on their laptops or smartphones, as each one of them as integrated webcam attached with them. Facial features present similar unique data as extracted through fingerprint scans or iris scans, thus ensuring that no person can be able to replicate any identity or personal information that they don’t own. Biometric authentication for KYC, when performed with the help of Face verification, creates a huge opportunity for banks to significantly reduce of account takeover by digital scammers, without investing a substantial amount of money in hardware equipment on hundred of bank branches, not to mention special network resources devoted for data communications between servers for authenticating biometric identities of users.

Partnership with a reliable KYC service provider that has a technically sound biometric authentication service based on face verification can do wonders for a banking organization. Shufti Pro is one such Digital ID verification software that has developed a customized KYC solution for Banks that has face verification as a preferred mode of biometric authentication. Using Artificial Intelligence, in combination with Human Intelligence, Shufti Pro ensures that no person with fake credentials or with stolen personal information can access the secured assets ranging from bank accounts to insurance claims.

With real-time verification results, the entire process of KYC is fully automated and Shufti Pro even offers Restful API and mobile SDKs to seamlessly integrate its KYC process flow with the pre-existing mobile application, online portals, web-based platforms. With support available for 150+ languages and covering 225+ countries, Shufti Pro is perfect for KYC verifications and identity verification services.

 

Author Bio:

Amelia Matthers is a tech enthusiast that has hands-on experience in marketing of various KYC verification and online identity services. With focus on educating businesses about the threats involved with online frauds and identity theft, Amelia has worked extensively to propagate large scale adaption of innovative KYC and AML compliance solutions. Always a keen learner and seeker of an online marketplace free of online frauds, Amelia is go-to-guy for identity verification and KYC verification.



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