While IDV using traditional KYC methods is deemed outdated and remote interactions and transactions have become paramount, video KYC has turned out to be a game-changer in the world of Digital Identity Verification.
This blog helps to identify that many leading identity verification providers have now started offering Video KYC solutions, making it easier for businesses to onboard customers securely and efficiently.
CONTENT
- What is KYC? How does it help in Reducing Fraud and Authenticating a Customer’s ID document?
- What is video KYC?
- How did Video KYC replace traditional KYC methods in identifying a user’s identity?
- What are the benefits of Video KYC?
- Importance of Video KYC in Different Countries
- Conclusion
- More About Us
What is KYC? How does it help in Reducing Fraud and Authenticating a Customer’s ID document?
Know Your Customer (KYC) is an identity verification process used by businesses and financial institutions to verify the identities of their clients. KYC has become a powerful tool for industries to protect themselves and their clients from the ever-evolving landscape of fraud and risk.
The main aim of KYC is not only to prevent fraud but also to authenticate user’s identities to ensure that they are who they claim to be. It also helps in complying with regulatory requirements and safeguarding sensitive customer data.
Our robust identity verification solutions can help financial institutions and businesses effectively reduce the risk linked to fraudulent activities. These solutions incorporate cutting-edge technologies like face recognition, document scanning, and biometrics to guarantee the precision and authenticity of the user’s identity.
The KYC process works by collecting and verifying essential information from individuals to confirm their identity and make sure they are who they say they are. This typically includes personal details such as name, address, date of birth and often involves document verification, like passport and driver’s licence.
What is video KYC?
In this advanced world, digital KYC has become paramount. Video KYC, or Video Know Your Customer, is an advanced form of KYC that is used for verifying a user’s identity remotely through a Video call. Video KYC solution providers offer video KYC solutions to verify customers’ identities by checking their documents and matching them with their real-time appearance.
These solutions involve a live video call between an agent and a client. The purpose of this live video call is to verify identities, which reduces the risk of fraud and enhances customer convenience and security. The agent on the other side of the video call verifies the user’s identity by verifying their details and matching them with their real-time appearance.
Video KYC has now been adopted by several industries, including Banking and Finance, the Cryptocurrency exchange industry, fintech companies, Education, Healthcare, as well as the Insurance sector. Additionally, businesses can integrate Video KYC into their systems through Video KYC APIs, making the process even more streamlined and efficient.
How did Video KYC replace traditional KYC methods in identifying a user’s identity?
Before entering the digital world, KYC was performed manually with conventional methods. It was one of the main concerns for banks and other financial institutions; e.g., When the banks used to onboard clients, they asked them to fill in forms, scan their identity documents and then make them wait for an answer. In some cases, they also used to visit client’s residences to check whether they had given the correct address proof or not. This was no doubt a time-consuming job and also cost a lot of money.
In contrast, Video KYC has emerged as a revolutionary solution for this problem, replacing traditional KYC methods for identity verification. Unlike complicated paperwork and in-person visits, Video KYC solutions leverage video conferencing platforms and APIs to streamline the process. It has undoubtedly reduced the cost and saved time and effort of both the client and financial institutions. It is more suitable than the traditional method because it ensures security and accuracy at a higher level.
Video KYC platforms enable individuals to authenticate their identities via secure video calls, ensuring immediate verification and minimising the potential for fraudulent activities. The adoption of Video KYC has revolutionised the landscape of identity verification, enhancing speed, efficiency, and user-friendliness while diminishing the dependence on conventional KYC approaches.
What are the benefits of Video KYC?
Video KYC is more accurate because automated algorithms can detect features and patterns that are invisible to the human eye. There are several ways that serve as a benefit of Video KYC;
- It is extremely effective at preventing deep fake, spoofing and other identity frauds.
- It saves both time and cost for an individual as well as a company.
- It helps onboard users safely and securely.
- It eliminates the need for physical presence, allowing identity verification remotely.
- Video Kyc solution providers guarantee the security of video calls and data, adhering to rigorous regulatory standards.
- It is beneficial for individuals as well as banks and financial institutions.
The video KYC process involves a live video call between a user and a verification agent. During the call, the role of the agent is to review the customer’s identity documents, such as passports or driver’s licences, ensuring their authenticity. This real-time interaction enhances the accuracy of identity verification and reduces the risk of fraud.
It saves resources and helps in customer onboarding, becoming a win-win situation for both businesses and users.
Importance of Video KYC in Different Countries
Video KYC has taken the lead due to their immense transformative impact in the field of digital identity verification. Here are a few countries that have made Video KYC mandatory in digital identity verification procedures-
- Germany- Video KYC has been a part of their regulatory landscape since 2015 when Germany’s financial regulatory body (BaFin) introduced Video KYC requirements for remote verification.
- Spain- Since 2018, SEPBLAC, their AML authority, has demanded an authorised Video KYC process for financial institutions.
- India- According to Section 18 of India’s Master Direction on KYC, financial institutions and banks have to include Video KYC in their verification processes mandatorily. They are also told to include Video KYC, specifically in the form of Video KYC interviews.
- European Union- It has been made compulsory in the European Union that a Qualified Electronic Signature (QES) will only be granted on one condition when the individual has undergone a video verification.
- United States- Video KYC has entered various sectors, including Fintech, healthcare and banks. Companies are dependent on video KYC platforms to verify the identities of customers and patients, ensuring data security and regulatory compliance.
Many national anti-money laundering (AML) laws require or allow video KYC for high-risk customers and transactions. Here are some jurisdictions where video identification can be used for KYC:
- Australia
- Germany
- Canada
- India
- Ireland
- Japan
- New Zealand
- Singapore
- South Korea
- United Kingdom
- United States
Conclusion
Video KYC solutions have built a position of their own in this digital era. Video KYC companies have played a vital role in making these solutions accessible across various industries and countries. The transformation from traditional KYC methods to Video KYC has also been remarkable. From Germany to the United States, Video KYC is becoming a mandatory component of the identity verification process, further validating its role as the future of digital identity verification.
More About Us
IDMlive is an innovative solution offered by IDMERIT, revolutionising the KYC process for video verification. IDMlive not only verifies an individual’s presence but also features the ongoing verification process at the dashboard. It also ensures compliance with several regulations like KYC, GDPR, and AML.
If you are seeking an efficient video KYC solution to authenticate your customers’ identities, IDMERIT’s Identity Verification platform is worth looking at. Reach out to one of our Identity Experts and get a no cost, no commitment product demonstration along with consultation tailored to your specific needs.
