KYC involves collecting the information of clients digitally. In this process, digital forms are used to insert the information of the user. This information includes the personal data of the user, which are name, identity card number, address and picture. In the traditional method, all this data was recorded manually, which was time-consuming, but now digital KYC solutions have solved many problems. Businesses can verify whether the user is the same person he is claiming to be.According to 86% of corporate leaders surveyed by the World Economic Forum (WEF) and 93% of cybersecurity specialists, “a far-reaching, catastrophic cyber attack is likely in the next two coming years.”
Importance of Digital KYC
Digital onboarding KYC is important for several reasons. The following reasons increase its value.
Prevent Financial Frauds
Hackers pretend to be customers; they hack their passwords and steal all the money from the account. However, through this Digital KYC verification, businesses can protect their clients from fraud.
Identify Theft
This system helps to identify theft because it requires user identity. Companies can locate theft if any unknown person logs into a user account.
Streamline Onboarding Process
Digital KYC onboarding is a very streamlined process; no manual documentation is required. In no time, the customer’s KYC is done. It also saves expenses because lengthy documentation takes more time and training. In today’s era, no one has time for lengthy documentation; customers usually get fed up with such activities. So if the business uses digital KYC verification, they can retain their customer for a long time, and satisfied customers also recommend their company to their friends and family.
Onboard more Customers
The Digital KYC process helps in boarding more customers. Companies can increase their profit through it.
Promote Financial Inclusions
In the past, customers had to be physically present to open an account, but digital KYC solutions have made it more accessible. In rural areas, there is no concept of banks; people must travel to the city for banking formalities. By using KYC onboarding, everything is done digitally. So customers find it convenient. Availing financial services become convenient and accessible through it. Companies can enhance their goodwill by using these techniques.
Types of Digital KYC Solutions
There are three types of KYC solutions
- Online KYC
- Video KYC
- OTP Based KYC
Online KYC verification
In the online KYC, clients fill out the online form given to them by the company; after filling out the paper, it is submitted to the respective company. Customers also have to sign the KYC form. The signature can be performed in two ways. First, by taking the printout of the document, signing it and then physically sending it to the company. Secondly, there is a more accessible and time-saving procedure in which a client can digitally sign the document and then upload the sign on the form, and respective companies can verify it.
Video KYC verification
The video-based KYC process is used mainly in opening bank accounts. If a customer can not physically present, their KYC can be done through video KYC. Company representatives make video interactions with the customer.
The following steps are involved in the video KYC
- Customers get the link to video interaction through email or text.
- They have to click the link, and a video call will start.
- On the other side, a company representative will perform video kyc
- The officer will capture the picture and video of the customer and will verify the documents.
- Once the procedure is done, customers are informed by text or email.
OTP-based KYC Verification
This is another type of verification in which customers receive an OTP(One True Pairing) on the mobile phone or the mail ID. This is mainly used in opening digital accounts. The customer has to enter that OTP number in the KYC form. This leads to the verification with the client’s registered phone number. In this way, KYC is completed.
Who is Eligible for KYC?
Almost every business is eligible for the KYC. Some significant industries are using KYC.
- Financial institutions
- Law firm
- Hospitals
- Real Estate Companies
Financial Institutions
KYC services are primarily used in the banking sector, from onboarding customers to maintaining data. All is done with the help of digital KYC solutions.
Law Firms
It helps in the identification of high-risk clients. Customers are monitored, and their risk is measured through it.
Real Estate
Digital KYC has made the real estate process easy. In the past, lengthy documentation was very hectic, but now digital KYC has eliminated all that paperwork; everything is done through digital accounts. This saves businesses time, and the company’s revenue is increased.
Conclusion
Digital KYC is the most crucial digital advancement as it has many advantages. It has resolved many issues, as it helps in satisfying customers and building the customer trust because customers feel safe while using such systems. Revenue of businesses is increased through using digital KYC and customer retention is also enhanced through it.
