KYC Documentation – A Process to Authenticate Customer Legitimacy

KYC Documentation - A Process to Authenticate Customer Legitimacy

In this era of constant digital communication, identity theft and fraud are on the rise every day. According to reports, identity fraud affects one in three people in the US. The expansion of digital channels has made it simpler for hackers to steal clients’ digital identities. They assault different clients with identity theft, using various computerized tools for the exploitation of user credentials. Statistics show that identity theft causes data loss of close to $2 – $5 trillion annually across the globe. Identity fraud also has a significant negative impact on the region’s economy. Authorities have made the KYC documentation – verification process a requirement for all businesses in order to secure relationships in an effort to eliminate this problem.

Advantages Of Verifying Identity With Documents

Documents belonging to the user serve as identification documentation. These official documents, which certify the person as real and trustworthy, are issued by legitimate national offices. To verify a customer’s legitimacy, the majority of businesses only use document proofs. KYC documentation – verification also offers the customer’s complete profile, including information on their previous interactions, employment history, and historical data. Organizations can thoroughly investigate the user in the event of any fraudulent activity using the client’s information.

Traditional Document Verification

The process of verifying ID documents has typically been encountered by customers in a variety of banking and business environments. Financial organizations have been practicing it for a long time. Customers employ this process each and every time they communicate with the business network. By physically presenting the identity proof to the company in hard copy, you can verify documents. By manually processing the paperwork, businesses can confirm the honesty of the customer. The business performs document verification during the customer onboarding process, such as when a new bank account is opened.

Electronically Verification – KYC Documentation

The world has seen the emergence of new business and working methods. Remote communication increased in popularity after the pandemic. Businesses perform a remote process to examine identity documents for customer authentication. The online KYC documentation – verification process requires users to upload documentation verifying their identity to the online platform.

KYC documentation – Online Verification Process?

The majority of businesses are now utilizing the process of online document verification as the number of digital platforms increases. Billions of people use the internet, and the e-KYC verification method is efficient for confirming the identities of customers.

Acquisition Of Documents

Through online platforms, the provider of documentation verification services obtains the customers’ documents. Most clients submit documents through online platforms where they are asked to upload images of their legal certificates.

The Online Validation Check

The customer’s submitted documents are validated by the electronic verification system. Documents are being examined by companies for tampering of any kind. While submitting fake document images, fraudsters modify them using a wide range of online image analysis tools. The new AI-based technology validates the photos through repeated photo comparisons with the pre-built document templates to check for violations.

Online Document Verification

The system continues to process the documents after validating the customer’s information. The data present in the uploaded certificates is processed online using optical character recognition technology. OCR allows for the identification of the customer by detecting and extracting data from documents. Names, date of birth, nationality, and other identity details are collected by an expert from clients. Businesses confirm the legitimacy of the user by utilizing information from the databases.

KYC Documentation – Digital vs Conventional Verification Technique

In the modern era, the conventional approach to document verification is ineffective. The traditional method of processing a client’s paperwork is time-consuming and laborious. Conventional document verification can take up to weeks because client certificates must be physically identified. Additionally, manual document inspection is necessary, requiring participation from numerous organizational staff. As opposed to digital verification, which is fast and gives results in real-time. Utilizing artificial intelligence, digital systems perform automatic data extraction and verification.

Concluding Remarks

A crucial component of KYC compliance is the document verification process. It gives all the details that a business needs. When the onboarding process is in progress, businesses use the document verification check to confirm the customer’s identity. The KYC documentation includes identification documents like passports, ID cards, and other identification-proving certificates. Thanks to the introduction of digital systems, the processing and verification of documents are now complete more swiftly. Due to digital systems, it is possible to perform KYC documentation – verification in a more effective and efficient way. It makes use of AI systems to quickly produce output and automate the process.

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About the Author: Katherine

Katherine is a passionate digital nomad with a major in English language and literature, a word connoisseur who loves writing about raging technologies, digital marketing, and career conundrums.

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