Uncertainly, a wide range of hackers is evolving at a swift pace in parallel to technological evolution, especially since the past decade. Immense acquisition of AI-powered technology, as well as sophisticated cyberattacks, are prominently observed since after the pandemic year. The CoronaVirus pandemic has had a major effect on consumer use of internet services. In order to transfer their services entirely online, following KYC/AML mandates, and have a stronger digital consumer experience, businesses have had to reinvent their identity verification procedures. Although the COVID-19 rehabilitation will undoubtedly be digital, online onboarding for financial institutions and other regulated industries is subject to strict KYC and AML criteria that differ greatly based on their customers’ geographic location.
E-KYC standards in countries like Germany, Spain, India, and Mexico require the use of digital authentication technology, which involves a two-way video chat between the customer and the organization, as well as the capturing of important documents as part of the biometric identification process. Identity authentication based on selfie verification may be a safer option in other areas where E-KYC has long been recognized as a form of identity authentication and a choice of software is appropriate. For heavily regulated sectors like financial services, knowing the consumer’s identity is a must.
3 Types of Remote Biometric Verification
A biometric security system offers three types of identification:
- Assisted: Consumers are detected using video-based technologies and are assigned to designated or joint verification agents that communicate with them in real-time via app or mobile device.
- Unassisted: Customers here can record a video of their identification cards, take a snapshot, and conduct a liveness check without the assistance of an online operator. Verification is accomplished using a mixture of AI, ML, and expert analysis.
- On Platform: Consumers are detected and checked using a biometric identification system, which is staffed with your own officers.
Advantages of Employing a Biometric Identification System
There are many benefits of using a biometric authentication system:
- Customer satisfaction is more enhanced as users don’t have to visit the verification place.
- Onboarding customers without having to interact with them means a completely contactless process.
- Lower compliance costs with a verifiable audit trail and reliable interview records.
- Replaces manual verification systems that are no longer in use.
- Scammers and money launderers are discouraged from opening accounts.
Compliance Regulators Across Various Countries
Here are some of the compliance regulators to consider when shifting to a video KYC process:
- In Germany, the concerned regulator is BAFIN (Bundesanstalt für Finanzdienstleistungsaufsicht)
- In Spain, the concerned regulator is SEPBLAC (Servicio Ejecutivo de Prevención de Blanqueo de Capitales)
- In Lithuania, the concerned regulator is FCIS (Financial Crime Investigation Service)
- In Estonia, the concerned regulator is Finantsinspektsioon
- In Mexico, the concerned regulator is CNBV (Comisión Nacional de Bienesy Valores)
- In India, the concerned regulator is RBI (Reserve Bank of India)
- In Switzerland, the concerned regulator is FINMA (Swiss Financial Market Supervisory Authority)
- In Portugal, the concerned regulator is BdP (Banco de Portugal)
- In Luxembourg, the concerned regulator is CSSF (Commission de Surveillance du Secteur Financier)
- In Latvia, the concerned regulator is FKTK (Financial and Capital Markets Commission)
Walkthrough of a Biometric Authentication Process
- The user displays their ID file to the system’s webcam during registration. That should be a legal document published by a state agency.
- The authenticity of the file is then verified against manipulation attempts using the biometric identification system.
- The KYC specialist verifies the person’s identity via video call.
- Furthermore, if a scammer tries their hand by displaying a photograph, film, hologram, face mask, etc, their deception attempt will be identified. The agent can achieve this by asking the consumer a few routine questions.
- In addition, the KYC agent compares the person to a photo on their identification card.
- The outcomes of the video onboarding procedure are shown to the customer after it is completed. Subsequently, the results are modified in the business’s back office API.
- The video onboarding procedure is captured by the agent for documentation purposes after the consumer has given their consent.
Though customer security is at the forefront of these lawmakers’ minds, there has been a welcome effort to incorporate advanced technology into the biometric identification system.
There is no going back for end-users. Conventional or otherwise known as offline KYC, where a user is expected to visit the verification location to carry ID documentation and paperwork and bearing extended delays to open an account might never be appropriate anymore. Without any ambiguity, it is clear that hackers can hack someone’s credentials but they cannot hack someone’s biometric. Biometric identity verification solutions play a promising role and leave a beneficial impact on businesses and financial infrastructures,