In the modern digital world, there is no end to technological innovation and how it contributes to the progress of any business. However, cybercriminals also use intelligent digital solutions to exploit the corporate world for nefarious objectives. This is where the application of video KYC solutions can help business experts to discourage identity theft while following know your customer & anti-money laundering regulations. This way, corporations can easily avoid hefty fines and bans, while maintaining market credibility.
The following sections in the article discuss the significance of video KYC services, the complete procedure & associated benefits:
Video-Based KYC Systems: A Quick Overview
Know your customer procedure is about identifying & validating the users’ credentials by collecting data during the onboarding process. All businesses must execute identity verification services to comprehend the purpose & nature of corporate partnerships or monetary exchanges. This can happen by creating risk profiles of all the new customers and executing due diligence procedures accordingly.
Video KYC services allow financial firms to confirm the credentials of a client during a short interview with a professional. Businesses can also collaborate with third-party vendors to implement ID validation services. This way, corporations can comply with KYC & AML regulations and strengthen customer relationships.
The kind of business entities that have a responsibility to execute video KYC can change according to jurisdiction. For instance, regulatory agencies in Germany highlight the following parties that must perform video-based KYC services:
- Credit institutions
- Financial firms
- E-money agents
- Investment management companies
- Insurance providers
- Cryptocurrency operators
Complete Requirements of the Video KYC Solutions
The following sections discuss the criteria for ID verification of clients through video-based interviews. The procedure can change depending on the jurisdiction.
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Understanding the Pre-Requisites of an Interview Session
Users must prepare the following government-issued records and means of identity verification.
- ID card
- Web camera and microphone
- Stable internet connection
- An updated web browser
The operators must be ready with the following:
- Trained professionals to conduct video interviews
- Means of executing the meeting without interruptions
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Taking Consent
At the start of a video interview, users must give explicit consent to move forward in the ID verification process and to images that experts will capture. Specialists also record a short video of the client’s consent.
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Extracting Desired Information from Records
In the third phase, experts capture the required user credentials from government-issued records. For clients:
- Full name
- Date of birth
- Citizenship
- Residential address
- Activity profile
In the case of legal entities, the following information is gathered:
- Complete business name
- Registry code
- Legal forms
- Activity profiles
- Location of business which includes locations in foreign countries as well
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Conducting the Video KYC Interview
The interview process can differ depending on the regulatory requirements but the common points are the following:
Evaluating the ID Documents
Users must display government-issued records or other documentation in front of a web camera and submit them through a dashboard. The KYC professional examines the records and performs additional procedures if required.
Document evaluation criteria are below:
- All features must be visually detectable in white light and accessible for evaluation
- Document integrity or lack of forgeries must be verified
- The issuance & expiry dates must match
- The validity period of given records is examined
- The authority code & typefaces must be checked to ensure accuracy
- Cross-checking of user data to complete the verification process
During the video session, the client’s body language must be visible so that experts can decode physical movements for any signs of deception.
Experts can ask the consumer to do the following:
- Change their position or place documents in the frame
- Remove extra items such as glasses
- Answer some simple questions to ensure the reliability of given records
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Managing the Complete Record
According to the jurisdiction’s AML protocols, it may be necessary to maintain a record of the entire video KYC session. In this case, experts must store both visual & sound recordings after taking the consumer’s consent. The client’s information must be managed for some years, according to specific requirements for that particular jurisdiction.
Top Benefits of the Video KYC Services for Businesses
Online video-based KYC procedures are complex but it is highly facilitative to streamlining the customer onboarding procedure. The application of cutting-edge technology can also facilitate compliance with KYC & AML regulatory obligations.
Complying with International Standards
Industries under supervision such as the banking sector must follow local KYC & AML regulations. This way, business experts can protect the organization from money laundering, terrorism financing & non-compliance penalties. Video KYC services can support corporations to deal with issues in a cost-effective manner.
Increasing Conversion Rates
In the modern digital world, financial businesses are concerned about maintaining the clientele base. The application of video KYC solutions can attract new customers while maintaining existing consumers. Moreover, firms can easily decide which user must go through the video-based ID verification according to the risk profile.
Concluding Remarks
The application of video KYC can help organizations because it is a globally scalable service as well as user-friendly. The cutting-edge technology can guarantee a competitive advantage in a tough market atmosphere and communicate growth & responsibility to all the stakeholders. This way, financial firms can attract genuine customers from around the world. Collaborating with a third-party vendor can benefit financial experts because specialists can quickly implement a GDPR-compliant solution.