Banks are striving to grow their customer base through faster, easier and lower-cost digital channels. Yet, the current regulatory and cybersecurity landscape creates a layer of complexity. Consumers want the convenience of signing up through digital channels, but financial institutions must comply with stringent anti-money laundering (AML) and know your customer (KYC) regulations that typically send new customers out of their preferred (digital) channel for identity verification. More banks and fintechs are seeing a clear need for eKYC to verify the identity of their online customers.
The potential economic loss across Asia-Pacific due to cybersecurity incidents could hit a staggering $1.7 trillion USD, according to Frost & Sullivan.
Electronic KYC (eKYC) enables the financial services industry to assess the risks or illegal intentions of each user, during each transaction, whether they’re opening or attempting to log into an account, applying for a loan or making a payment. The right eKYC strategy can transform a financial institution’s manual KYC, AML and customer onboarding processes into a streamlined online approach.
There are several ways and technologies that can be brought to bear to perform eKYC, AML screening and online identity verification. For financial institutions that rely on a government-issued ID document and biometric verification, the online identity verification process generally consists of a few key ingredients:
- Optical Character Recognition (OCR) to extract data from the ID document
- ID verification to ensure the ID is valid and undoctored
- Selfie capture and comparison to ID document to increase identity assurance
Some fintechs and financial institutions attempt to stitch together their own homegrown KYC processes by combining optical character recognition (OCR) and facial recognition solutions with their own manual processes and review teams, given the low cost of labor in APAC.
There are dangers to this do-it-yourself approach to cobbling together eKYC solutions, which is why we’ve created eKYC in APAC: How to Get it Right. This comprehensive guide will show you:
- The benefits of biometric-based identity verification
- The dangers of taking a DIY approach to eKYC, especially when it comes to optical character recognition and facial recognition software
- The challenges and opportunities of modern OCR and facial recognition technologies
- How OCR and facial recognition impact verification accuracy when used in isolation or when cobbled together in a piecemeal fashion
- How modern digital identity verification and automated AML screening solutions can help financial institutions cost-effectively meet eKYC requirements while protecting against online fraud and account takeovers with speed, accuracy and a streamlined user experience
Download our new guide to learn more.