Ever since the existence of humanity, new innovations and technologies have been made to improve the standards of living. Every day millions of dollars are invested in different sectors to improve their operations and work processes. As a result, our lifestyles are improving with every passing day. An emerging industry, IT, has revolutionized our lives in countless ways. The work that involved lots of time and human effort is now done in a few minutes or seconds with the help of computers.
Like other inventions, computers can be used in a wide variety of ways, depending on the requirement of the user. Some users utilize computers to their best ability for the betterment of the world and its inhabitants, while others use them to cause harm and damage. Since the advent of the internet, criminals have been deceiving and exploiting users through fraudulent practices. The Federal Trade Commission (FTC), states the total number of fraud cases reported in 2018 were 1.4 million and people reported to have lost money in a quarter of the cases. People lost about $1.48 billion in fraud cases in 2018. This has caused substantial loss to institutions, individuals, and businesses. The whole system is disrupted as a result of such practices.
Global regulatory authorities have introduced KYC and AML
compliances that financial institutions and banks are bound to follow and adhere to. This is to ensure that all financial transactions are monitored and the incidents of fraud are diminished. Due to these reasons, businesses and individuals are also encouraged to comply with these regulations. KYC also known as Know Your Customer, refers to the identity authentication of customers to establish whether they are who they claim to be or not. The identity is verified by attaining their personal information and matching it with their personal documents.
It is a complicated and time-taking process and customers nowadays don’t have the time to deal with the government, consulate, and embassy offices for their KYC practices. However, due to advancements in technology, the identity validation process has been automated through the use of artificial intelligence (AI) systems. The technology works smoothly and increases the precision and efficacy of the ID verification process, diminishing time, and labor. This can help in the prevention of threats from scammers and fraudsters, who have the tendency to negatively affect businesses.
There are many ways of identity verification online, but the ones commonly used are facial identity verification, document verification, address verification, two-factor authentication, and consent verification.
Document Verification and its uses
An integral method to conduct KYC or verify the identity of customers. The process involves the end-user verifying the authenticity of his/her documents to the banks or businesses. In banks and other state institutions, individuals are desired to verify their personal identity via the display of govt-issued documents. The artificial intelligence software checks whether the documents are genuine or unauthentic. If the documents are real and authentic, the digital documentation verification is completed and the customer is onboarded.
The digital document verification
process mainly includes four steps. First, the customer is required to show his/her identity documents in front of the device webcam. The document is then scrutinized by AI-powered software to verify its accuracy. Counterfeit or copied documents are immediately checked and refused by the software. The next step involves the extraction of pertinent information from the document using OCR technology. The information is safely stored in the office of the verification provider and monitored by human representatives to further validate the accuracy of the documents. Then the results are sent to the business asking for them. The whole process takes less than five minutes.
Scam and fraudulent transactions have unwanted consequences for both individuals as well as businesses. Losses due to scams and frauds trickle down at every level and ultimately have negative effects on the whole financial system. Therefore it is imperative to conduct proper customer verification and due diligence in order to minimize the risks of fraud and other criminal activities. The digital documentation verification process plays a vital role in the Know Your Customer (KYC) process and prevents the chances of money laundering as well.