With the progress in modern technology, the risk of money laundering and digital identity crimes has expanded more than it was before. It is recorded from 2017 to the recent year that the rate of money laundering has increased from 19.5 billion to 63 billion US$. With the increase in fraudulent activities and digital financial crimes, Fintech companies are in search of aid that will assist them in fighting scams. Moreover, they are searching for something to provide them with different tactics that will alleviate the chances of their involvement in fraudulent activities.
The onboarding process of fintech industries is increasing day by day, to get authentic workers on their platforms they need digital verification services. KYC is offering effective digital verification services that are necessary for the banking industries to incorporate that will not only save their reputation among competitors but also give them authentic workers. This blog will discuss the challenges that the fintech industry faces and how to cope with all these issues regarding money laundering and fraudulent activities with digital KYC verification.
Significance of Digital KYC Verification
Digital KYC Verification is the process of validating the clients and workers on online platforms and workspaces. This process assists the companies in dealing with the corrupt members of the community. Moreover, it tells different tactics to diverse organizations so that they can combat criminal attacks. It also saves the organization from its competitors who want them to lead towards reputational damage.
Digital KYC Onboarding in the Banking Industry
Banks are the first places where scammers throw their arrows when they have done a fraud. Banks are holding the finances of other people so they must secure them with advanced technology. By using KYC verification they can know their customers before having an encounter with them. Furthermore, with advanced digital KYC solutions, they can easily decide whether they have to work with the client or not.
- Electronic Know Your Customer (eKYC)
KYC offers its electronic verification services to banks where the identity and residence of the client are validated within a few seconds. For instance, in India, the government is helping the people with the Aadhaar program that assists them with biometric validations of their ID documents. This system also works for online validation. For the digital validation process, the system searches data from the online bureaucratic ID documents that have a chip on it. It also assists in facial verifications.
- Effective Way of Verification
This has made the onboarding process much easier and faster. Now the companies and their clients can easily proceed with the onboarding process through digital verification services that are safe to utilize.
- Risk-Assessment
The banks must implement such software that will assist them in dealing with future threats. KYC helps the fintech industry in combating criminal risks not only at the time of onboarding but also ensures the continuous checking of the client even after the hiring procedure. It notifies the organization if it discovers something suspicious about any member of the community.
- Combats Terrorism and Money-Laundering
Digital KYC verification solution helps the communities in making an effective organization. It deals with the threats of terrorism, money laundering, and other criminal attacks. This process includes diverse verification facilities such as:
- Verification of ID documents
- Verification of Facial Features
- Verification of Educational and bureaucratic documents
- Biometric validation
- Hefty Fines Prevention
Digital KYC verification works as an anti-money laundering and anti-terrorist system that will prevent organizations from hefty fines and reputational damage.
- Foolproof System
Digital KYC verification solution gives a smooth encounter to its client. It’s a user-friendly system that is not only convenient to utilize but will also assist in working with less effort and time.
- Revolutionized the Traditional ways of Validation
It has taken the place of manual systems that take too much effort and time. Manual Know Your Customer verification services were difficult to utilize for both the organization and clients. Now, with digital KYC verification technology, fintech industries can easily validate whether the client suits their organization or not. It has reduced the workload at the offices and increased the rate of productivity. Digital KYC solutions have AI algorithms and machine-learning facilities that are necessary for any system in this fast-paced world. Digital KYC verification solution has enhanced the credibility of organizations and created a healthy relationship with their clients.
Conclusion
Digital KYC onboarding is a must-have for all banks as it deals with terrorism and corruption. It works as a helping tool for the fintech industries to save them from being involved in criminal activities and hiring corrupt candidates. It ensures the organization about future threats and provides services that are way faster than the traditional ways of verification.
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