KYC Video Identification: Enhancing Financial Sector Amid COVID-19 Pandemic

The emergence of the COVID-19 pandemic affected the operations of almost all the business sectors. Various industries shifted to digital verification methods during this time. Financial institutions were unable to conduct business operations, which affected the KYC process the most as it required face-to-face interactions for a better understanding of the analytics. 

During this unfortunate period, the video KYC process was improved, which received a significant boost. The implementation of KYC video identification helped the banking sector to verify and onboard customers through online instead of live interaction. Video KYC is a video-based verification procedure that enables customer verification to be carried out remotely accurately.

How KYC Video Identification Is Done

Video KYC refers to Video Know Your Customer, a process in which companies can verify their customers, partners, and clients remotely using video chats. During the COVID-19 pandemic, the collection of physical documents became impossible, negatively affecting the onboarding processes. 

This is why the need for video KYC emerged during this period. There are two main processes: 

  • Assisted Video KYC

Assisted video KYC is carried out when a delegated official from a business who conducts KYC assists the customer in the verification process. The verification executive begins the procedure by inviting the customer through email or phone calls. The customer is then directed towards the web portal through a link where they upload the data. 

After informing the customer, the executive starts a video call and records the conversation. The customer must answer the system-based questions. Pictures of the provided documentation have also been captured. The executive saves the provided data, and AI parameters are used to verify the documents. If the KYC documents meet the requirements, the transaction is confirmed. This information will appear in the auditor’s dashboard.  

  • Non-Assisted Video KYC

Non-assisted video KYC occurs when the customer is unassisted by any agent and is prompted to perform the verification process themselves. The customer receives an invite through email. l and accepts the terms and conditions of self-KYC. The customer uploads the documents, and the video starts to record. The companies use liveness checks to ensure the client’s presence. 

The client answers the required questions. Then, optical character recognition (OCR) and artificial intelligence (AI) are used to extract data from images and perform the verification process. The video stops, and the client’s data is accepted or rejected. If the data is accepted, the client is successfully onboarded. 

Revolutionizing The Financial Sector

The unfortunate arrival of the COVID-19 pandemic led the financial sector to shift its operations online. During this period, the KYC, through video calls, revolutionized financial institutions and their customers in various ways. These are:

  • Fraud Prevention In The Finance Sector

KYC video identification checks use artificial intelligence, machine learning, and biometrics to secure customer data through accurate verification. During COVID-19, this feature helped the financial industries to effectively detect and prevent fraudulent activities, which resulted in the reduction of the company’s reputational damage and financial losses.

  • Reduced Operating Costs And Increased Efficiency

Video knows your customer approach can provide document verification to the customer remotely, saving the traveling cost, hence reducing the time resource needed for financial institutions. The verification is carried out efficiently with little risk by streamlining and automating the KYC process. 

  • Improved Customer Experience 

As customers were restricted from leaving their homes during the COVID-19 pandemic, the Video KYC process eliminated the need for customers to leave their homes physically. This increased customer satisfaction as they were being verified through the comfort of their homes. KYC video identification checks provide a fast and seamless experience for customers to verify their documents. 

Implementation Of Video KYC Into Digital Money Transfer 

Financial banks can use video KYC to reduce customer complaints and promote a smooth onboarding process. Banks can reduce various attacks by implementing KYC video verification into digital transfers. 

  • Mitigating Spoof Attacks

Financial institutions can implement KYC video verification in their digital money transfer solutions to combat spoof attacks. This can be done by using video verification and ensuring that only the verified customer is involved in the financial transactions.  

  • Eliminating Synthetic Identities

By incorporating KYC video-verified solutions, financial institutions can eliminate the presence of fabricated credentials and synthetic identities because document data is collected through a video instead of written text. Written texts are prone to fraudster attacks, whereas the data recorded through video calls are less approachable by the fraudsters.  

Summing Up

KYC video verification can serve as an ideal solution for many financial institutions because it can maintain data accuracy and authenticate the identities of customers through video verification. The security feature of video KYC can be enhanced if companies add biometric and facial verification in their KYC process. Banks can easily monitor the KYC process accurately by accessing the provided data through videos, which can help them in the decision-making process. 

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