Verifying the identity of customers has become increasingly important. Video KYC (Video Know Your Customer), also known as video onboarding, is emerging as a reliable certification method in various industries. In this blog, we will explore what Video KYC is and how it works. Furthermore, we will discuss the growing importance of Video KYC across various industries, highlighting the varying requirements and benefits for businesses. Lastly, we will examine the benefits of implementing solutions and what to look for in a solution provider so that you can make the best decision possible.
Video KYC, or Video Know Your Customer, is a remote identity verification process that leverages live video calls to authenticate individuals. It replaces traditional in-person KYC methods, allowing users to securely confirm their identity, documents, and information, including face verification, making it efficient and compliant for a wide range of industries. This technology offers convenience, enhanced security, and cost-efficiency, making it a key player in the future of customer verification and protection of customer’s identity. Understanding the needed prerequisites is essential before starting the verification process.
The primary difference between Video KYC, eKYC and Traditional KYC (Know Your Customer) lies in how customer verification is conducted:
Traditional KYC (Know Your Customer): This method requires customers to physically visit a designated location, such as a bank or financial institution. During the visit, customers provide identification documents like passports or driver's licenses, as well as health insurance documents. The staff then manually views presented documents. This process can be time-consuming, costly, and location-dependent, which can often be inconvenient.
Video KYC (Know Your Customer): This method, in contrast, is a more modern approach to customer verification. It allows customers to complete the verification process remotely, through scheduled calls. Customers typically upload scanned or photographed identification documents and participate in a live call. During the video customer identification process, facial recognition technology matches the live image with the photograph on the document, personal information is verified, and real-time checks confirm document authenticity.
eKYC (Electronic Know Your Customer): eKYC is a broader term that encompasses various electronic methods for customer verification. It includes both Traditional KYC conducted electronically and Video KYC. It also extends to other electronic methods such as biometric authentication and digital document verification. eKYC often involves the use of government-issued IDs, digital signatures, and other digital tools to establish and verify a customer's identity. eKYC can be used for various purposes, including opening bank accounts, obtaining digital services, or completing financial transactions.
Video KYC (Know Your Customer) has gained immense importance in the digital era. The size of the worldwide market was estimated at USD 212.68 million in 2022 and is expected to grow to USD 499.57 million by 2028. This growth reflects the increasing reliance on remote services and online transactions. Its growing importance lies in the ability to offer convenient, secure, and cost-effective remote customer verification, making it a vital tool for businesses and financial institutions in an increasingly digital world.
Put simply, users upload identification documents and participate in scheduled calls. Then, facial recognition technology matches live images with ID photos and personal information, and document authenticity is checked in real-time. After successful video verification, customers gain access to services.
In our digital era, countering fraud is critical. In this section, we will explore how Video KYC plays a vital role in combating fraud.
Spoofing Attacks: These attacks involve impersonation attempts using disguises, stolen IDs, or image manipulation. Video KYC requires live video calls and selfies for real-time identity verification. Agents assess appearance, behavior, and responses, making it tougher for fraudsters.
Synthetic Identities: Synthetic identities blend real and fake info to create false identities. It adds security by checking genuine ID documents in calls, exposing inconsistencies.
Deep Fakes: Deep fakes use AI to create fake content. Video KYC's real-time video checks help agents spot anomalies, and combining facial recognition and voice analysis tools boosts detection, making it harder for deep fakes to pass.
This onboarding method is widely adopted in banking and financial institutions for customer verification. Follow the next couple of paragraphs to learn how it can benefit each industry:
Video onboarding in banking and financial institutions streamlines the account opening process, allowing customers to complete verification through a video call. This eliminates the need to visit a bank branch and ensures compliance with KYC regulations, including regulations related to money laundering and fraud. It offers a secure and convenient way to verify customer identities for opening accounts, applying for loans, and accessing other financial services. Video KYC not only enhances customer experience but also provides a hassle-free onboarding process. By incorporating video verification, banks, and financial institutions can provide a seamless and efficient customer process.
Insurance companies and payment industries have embraced video onboarding methods as a means of verifying customer identities. By utilizing video verification, these industries reduce fraud and ensure the authenticity of a customer's identity. Video onboarding plays a crucial role in adding an extra layer of security to prevent fraudulent activities within the insurance and payment sectors of the financial industry, specifically in regard to anti-money laundering (AML) regulations. Additionally, it enables quick and efficient customer onboarding while adhering to regulatory requirements.
Remote companies can leverage video onboarding to verify the identity of employees or clients without the need for physical presence. This method offers a secure and efficient way for remote companies to onboard new hires or customers, eliminating the need for costly and time-consuming in-person verifications. By incorporating video-based identification, remote companies can strengthen their security measures while meeting regulatory requirements for customer identification.
Non-Banking Financial Companies (NBFCs) are embracing video KYC to simplify and streamline the customer verification process. By adopting modern customer onboarding methods, NBFCs comply with KYC regulations while also providing a seamless and convenient customer experience. This innovative technology offers enhanced security measures and helps prevent fraud for NBFCs. With online onboarding methods, NBFCs can remotely verify customers' identities and documents in real-time, eliminating the need for physical presence at bank branches.
Mutual funds are incorporating interview KYC as a means of remote onboarding for investors. Through video calls, this process allows mutual funds to verify investors' identities efficiently. By implementing video interview KYC, mutual funds can expedite the account opening process while ensuring compliance with regulatory requirements. Moreover, this approach enables mutual funds to provide a seamless and customer-centric experience for investors, who can easily complete the process using their mobile number. This way, mutual funds are embracing technological advancements to enhance their operations and deliver efficient services to their customers.
Real estate companies are leveraging video interview KYC to remotely verify the identity of potential buyers and tenants, ensuring compliance with KYC regulations. With video interview KYC, real estate companies can conduct background checks and save time and resources compared to traditional in-person verification methods. This secure and convenient alternative offers a seamless customer experience while enhancing security measures against fraud. By implementing video interview KYC, real estate companies can streamline their customer verification process and ensure the authenticity of their customers' credentials and identities.
As you can see, Video KYC is applicable across multiple industries. Let's explore the ways it can benefit your business:
Video KYC plays a pivotal role in streamlining customer onboarding. Allowing customers to complete the identity verification process remotely through video calls eliminates the need for in-person visits and extensive paperwork. This not only saves time but also enhances convenience, making it a more attractive option for customers. Moreover, Video KYC can offer real-time assistance and guidance, ensuring that customers provide accurate information and documents, reducing errors and the need for follow-ups. As a result, businesses can onboard customers more swiftly, providing a smoother and more efficient experience that fosters trust and customer satisfaction.
To ensure the highest level of security for customer data, video KYC implementations employ robust encryption protocols. These protocols protect sensitive information from unauthorized access and potential breaches. Additionally, secure transmission and storage utilize advanced encryption algorithms, guarding against any potential vulnerabilities. Multi-factor authentication measures are employed to verify both customers and agents, ensuring the authenticity of all participants in the identification process. Regular security audits and updates are performed to stay ahead of emerging threats and maintain a strong security posture.
Video KYC significantly contributes to omnichannel user engagement by offering a seamless and versatile interaction model. It allows customers to complete identity verification across various channels, including web, mobile apps, or even in-person kiosks via video calls. This flexibility enables users to choose the channel that suits them best, enhancing accessibility and convenience. Furthermore, Video KYC can be integrated with other customer engagement tools like chatbots, live chat, or email support, offering a cohesive and integrated experience. This convergence of channels ensures that users have a consistent and convenient means to interact with a business, whether they need assistance with KYC verification or have other inquiries.
Now that you understand what Video KYC is and how it works, let's look at the most important characteristic your solution should provide:
Expanding global reach is made possible through video KYC, allowing businesses to onboard customers from anywhere in the world. Geographical limitations are overcome as video KYC enables the verification of customer identities across different countries. This standardized and efficient method of customer verification can be utilized regardless of the customer's location. With global coverage through video KYC, businesses can tap into international markets and establish a global presence, catering to a diverse customer base. It opens up new opportunities for growth and expansion.
Implementing video KYC offers a cost-effective solution for businesses. By eliminating the need for manual paperwork and physical verification, operational costs are significantly reduced. The automation of the customer verification process through video KYC saves both time and resources. Additionally, remote customer onboarding eliminates travel expenses associated with physical verification. This cost-effective approach not only improves efficiency but also streamlines the entire onboarding process. As businesses transition from traditional KYC methods to video KYC, they can achieve substantial cost savings while maintaining high levels of security and compliance.
A customized video KYC solution provides tailored options for businesses of all sizes. With customizable features, businesses can meet their specific needs and integrate the solution seamlessly with existing systems and processes. The flexibility of the solution allows for scalability, ensuring that it can grow alongside the business. Moreover, a dedicated support team is available to provide personalized assistance throughout the implementation process. customized video KYC solution empowers businesses to streamline their identity verification processes and enhance their customer onboarding experience.
In conclusion, Video KYC is revolutionizing the way businesses and financial institutions verify customer identities, offering efficiency, security, and convenience. To further enhance this process and provide a seamless experience, integrating solutions like Live, which offers omnichannel and Customer Relationship Management (CRM) functionalities, can be a game-changer. By combining Video KYC with Live's versatile features, you can streamline customer interactions, maintain a unified view of customer data, and deliver personalized, efficient service across various channels. This not only strengthens the KYC process but also contributes to long-term customer satisfaction and loyalty, making it a win-win for both businesses and their valued clientele
If you're looking to streamline your identity verification process and stay ahead in a digitally evolving world, get in touch with our team today to learn how Live can benefit your business and help you meet compliance requirements seamlessly.
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