eKYC: Streamline Your Know Your Customer Processes

Incode

May 30, 2022

As the presence of online transactions continues to increase, the importance of a streamlined Know Your Customer (KYC) protocol is essential. eKYC or Electronic Know Your Customer is an advanced method for performing KYC that minimizes fraud and increases speed and conversion rates. Learn about eKYC and whether this digital identity verification method suits your organization.

What is eKYC?

eKYC, sometimes referred to as online KYC, is an advanced form of the traditional KYC procedure often used to verify user identity during remote onboarding. KYC is part of Anti-Money Laundering (AML) screenings to ensure that identity theft, money laundering, and fraudulent activity are not taking place. eKYC simplifies identity verification and authentication through AI and biometric verification. This technology allows a user’s identity to be confirmed quickly while protecting Personal Identification Information (PII).

eKYC is designed to:

• Increase customer conversion rates by reducing the friction associated with KYC & reducing approval time periods, providing a smoother customer experience and allowing the customer to access your product or service sooner
• Speed up the customer onboarding process to free up internal resources, allowing you to scale your business by onboarding more customers
• Comply with KYC & AML regulations
• Minimize fraud and its related costs

What is the Difference Between eKYC and Traditional KYC?

KYC incorporates a set of regulations that require organizations to conduct due diligence on their customers. KYC is typically conducted via paper documentation, such as IDs, Social Security numbers, and passports, to confirm the customer’s identification. This is undertaken frequently during job onboarding, opening bank accounts, using cryptocurrency apps, etc.

Financial and investment industries have extensive KYC compliance requirements. eKYC is an evolving way of conducting KYC with increased efficiency and accuracy.

Why is eKYC Important?

In a digital economy, anonymity is correlated to higher crime and fraud—eKYC limits these anonymous criminals’ freedom to manipulate eCommerce or other institutions.

The need for eKYC includes:

• Credit card fraud
• Stolen ID cards
• Money laundering
• Terrorist financing

eKYC works against these potential hackers and identity thieves to meet compliance regulations, prevent fraud and support the onboarding process.

Customer Due Diligence and Enhanced Due Diligence

Customer Due Diligence (CDD) is the standard amount of KYC verification conducted on all customers. If the customer is flagged as a potentially high risk, Enhanced Due Diligence is performed as a more rigorous alternative to CDD.

eKYC offers a rigorous and fast alternative for verifying the authenticity of documents and can also use biometric authentication methods for ID verification.

What is the eKYC process?

This process for ID verification is as follows:

1. The customer is guided through a set of prompts, starting with ID verification
2. The customer will provide the front and back of the ID virtually, using the camera on their mobile device
3. The system will determine if the ID is real and must pass a set of tests, including:
   • Tamper checks to verify whether the image captured is of an authentic document
   • Balanced lighting and image sharpness to capture a clear image of the document’s front and back
   • 2D barcode read
   • Valid ID date
   • Document expiration
   • DMV verification
4. The user takes a live selfie (or other biometric verification) to be compared against the verified ID to confirm a match
5. Each results verification test is provided within the eKYC software dashboard:
   • Identity verification can be confirmed automatically or manually

Additional eKYC Features

A robust identity platform will do much more than just ID verification. Incode Omni solutions are made to meet the diverse needs of businesses. Features include:

• Capture: Face capture, ID capture, fingerprint capture, etc.
• Non-Repudiation: Methods like verbal signature, checkbox signature, or digital signature.
• Risk Control: Determine risk associated with the individual’s provided information.
• Authentication: Complete authentication via biometrics.
• Identity Database: Real-time alerts for suspicious activity from previously verified customers.

The Role of Biometrics in eKYC

Biometrics, especially facial recognition, is frequently used due to the ease of implementation and the degree of accuracy.

Facial Recognition and ID Verification

Biometric facial recognition technology maps the user’s face, identifying distinguishing factors. A facial match between the photo and stored data confirms identity.

The Future of eKYC

eKYC provides a secure alternative to cumbersome onboarding and verification processes, reducing fraud attempts and increasing conversion rates.

Streamline Your Organization’s eKYC Process with Incode

With Incode Omni, you can streamline the KYC process and enhance satisfaction with onboarding for both customers and employees. Protect your company while taking advantage of emerging technology with Incode. Request a demo today to discover how Incode can help your business take control of KYC and AML processes.