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Sunday, October 24, 2021

KYC Solution- Automated way of Deterring Identity Fraud

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Both the human population as well as technological advancements are growing enormously. Employing artificial intelligence and cognitive technology to enhance the way of living is getting insightful. The criminals are getting benefits from the technology-based tools and products in order to run suspicious activities. Due to this reason, the number of digital verification fraud cases and money laundering are rising at a high pace. Therefore, efficient, robust, and real-time know your customer identity verification (KYC Solution) process plays a viable role to diminish the increased number of suspicious activities. 

Know Your Customer Compliance

KYC is termed as knowing your customer verification. As the name states, KYC laws assist companies to identify the real identities of their customers before getting them on board. This automated process is done by verifying the digital identity as well as validating the government-issued documents as prevention from numerous frauds and provides the feature of risk management. Thus, in the ultra-modern world, AI is booming and is widely being used in enhancing the productivity as well as the functionality of SaaS products.

Types of a KYC Due Diligence Solution

Facial Biometric Verification

Verifying the customers’ identity through facial traits using biometric technology is called face recognition. The facial characteristics vary from person to person, so by comparing the face imprints with the image placed in the identity document the customer is authenticated. It’s quite similar to unlocking a smartphone using a facial scanner. The use of biometric technology is increasing as time files. Its ability to precisely verify identities is making it significant. Facial verification also tends to fulfill the social distancing policies which were established to prevent covid-19 spread as it is providing touchless authentication results.

Document Verification 

The documents verification process checks the originality of the identity documents as well as authenticates the information placed in them. In addition, to check the authenticity of the documents they are thoroughly examined to determine any kind of signs of tampering or modification. The government-issued documents have special features which are quite different from illicit documents. Criminal activists usually use false and illegitimate documents to trick out the verification system. 

However, AI-driven KYC verification software is quite good in spotting such suspicious activities. The customers’ identity documents are pre-processed with respect to the KYC guidelines before labeling them as verified. Right after the documents are verified they are good to go, then using OCR technology the information is extracted like name, date of birth, etc for clients’ verification. OCR is well equipped to read and extract information in any language.

Address Validating 

Cross-checking the information regarding customers’ addresses with the data present in the documents such as ID cards, driving licenses, and utility bills are termed as the address validating process. This process determines the authenticity of the address in order to confirm whether that address is present on maps or its false address. Verifying addresses are very beneficial for e-commerce platforms and shipping businesses. Such companies are struggling and facing heaps of monetary losses due to the return shipment or failed deliveries. However, a legitimate address increases the accuracy of delivery as well as ships products within time. 

Age Verification 

Some types of businesses fall in the category of age-oriented service providers such as online gaming, gambling, and dating platforms. These digital platforms have very poor and old-fashioned ways of verifying customers due to the fact that the number of frauds is uncountable. Therefore, the age verification process incorporated with the KYC checks determines the exact age of the customers before permitting them to access the services. Digital pharmacies are also now becoming the consumer of such AI-enhanced services to prevent minor exploitation and illegal sales of age oriented drugs. 

Two types of KYC Authentication


It is also termed the digital know your customer verification solution. The role of artificial intelligence technology is impressive in making this solution insightful. AI has made this process digital as well as easily accessible remotely. In order to prove the identity, the user simply has to upload the facial image and the set of government-issued identity documents. Once the information and documents are submitted verification is done in the blink of an eye.

Video KYC Solution

The customer identity verification is done by a human KYC expert via video calling services. This is also known as a video interview to know your customer. The client goes through the live interaction session in which the KYC expert analyzes the identity document as well as the facial biometric using the video camera. 

Usually, the expert tends to question the customer to validate the physical presence of the customer. Use of selfie ID verification also validates authentication. But due to the biometric technology, 3D livens detectors accurately determine any kind of deep fakes of spoofing attacks while live video is going on. It makes the human expert conscious regarding the illicitness of the video.

Final Thoughts

Technology is in the contest phase of evolution, so are the criminal activists. The suspicious activities are increasing with time and financial companies are facing challenges to combat such fraudulent activities. Yet, KYC solutions are available in the market which provides the business a defense line to effectively deal with the fraudster and to pull them off from the ground.

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