Digital Transformation and KYC
In the not-too-distant past, businesses would conduct their KYC journey through entirely manual processes.
A business would first retrieve information from a potential client and then task a human operator with verifying it. Not only is this approach slow and expensive, but it is also error-prone; human employees are not infallible, after all.
Fast-forward a few years and KYC has been digitally transformed through electronic KYC (eKYC) solutions and digital ID&V (identity and verification) as the KYC needs of businesses have skyrocketed in response to the growing challenge posed by financial crime threat actors.
Although there are no fundamental differences between KYC and eKYC, and the behind-the-scenes processes are virtually the same—banks must still conduct identity verification, CDD, and ongoing monitoring—there are differences in the methods used to capture and check information.
Under the manual KYC journey, a client would have to visit a bank branch to open an account, taking along with them their identity documents which a human operator then manually checked against databases and watchlists.
This process has been reimagined through digital transformation into eKYC to be more digitally friendly and facilitate the needs of the client, using technology that echoes the digital experiences that clients have come to expect from every service they use.
A client now simply needs to provide a digital copy of an identity document which can be analyzed and verified alongside a biometric test. This digital transformation of KYC and its newfound flexibility means that it’s possible for banks to quickly and remotely onboard new customers, verify their identity documents, and check supplied information across countless data points in a matter of seconds.
It’s faster, more accurate, and can check a client’s information against more data points than is possible with a human operator, increasing the likelihood that risky clients are filtered out during the onboarding stage.