AI In KYC Automation: What Every Business Needs To Know

KYC or Know Your Customer is a regulatory requirement to carry out customer due diligence and anti-money laundering directives by obtaining and authenticating a customer’s identity. This highlights any associated risks of doing business with the customer. 

After catastrophes and scandals such as the Panama papers leak and the Danske scandal, it has become critical to take such steps and ensure that companies implement the required compliance mechanisms.

Who needs KYC?

· Credit institutions and Banks

· Casinos and Bookmakers

· Legal professionals 

· e-currency services and E-payments

· Digital payments and digital wallets

· Adult websites

· Accountants and tax advisors‌‌

· Insurers and insurance companies

· Any financial intermediaries

AI and KYC

AI-powered identity verification is more scalable, secure and seamless. Companies can transform their KYC process and identity verification through AI-powered KYC solution by specialists. These encompass innovations such as image detection and liveness detection, machine learning competencies and exhaustive search algorithms that enhance the overall customer experience and speed up the onboarding process. In short, AI-powered KYC reduced your go-to-market TAT significantly. 

Using Video KYC to onboard customers can reduce the KYC TAT by 90% and reduce operational costs by almost 70%. These cost and time-saving technologies used by employee background verification companies are built on AI technologies that simplify and automate the entire process. KYC has become more compliant, cost-effective, and customer-centric, especially for the new remote and hybrid forms of working. 

AI-powered KYC procedures rely on liveness detection expertise to instantaneously determine and authenticate the customer’s identity. This is made possible in real-time by comparing the customer’s live image with the NID (national identity document) uploaded by employing biometric anti-spoof algorithms. 

This type of digital and Video KYC automated solution supports risk-mitigating of financial frauds and identity thefts. This is essential for banks, telecom companies, regulated lenders, NBFCs, digital payments and other financial institutions. 

KYC automated solutions encompass the following facets 

Automated image quality verification

Bad images lead to delayed authentication processes. First, the user uploads a bad quality image, and then when the company gets to it, they inform them about the bad quality image. The user then needs to upload new images. Computer vision algorithms are better suited than manual reviewers for this task as they provide real-time feedback about blurriness, wrong orientation, etc. The customers can upload new pictures there rather than wait for weeks. ‌‌

Automated verification

Using OCR models, liveness detection and object detection help match images and documents against authentic databases and identity proofs provided by the customer. 

Automate fraud detection

Guaranteeing compliance involves keeping defaulters at bay from making transactions using forged and false information. This means companies need to weed out people who lack integrity and act unscrupulously. Digitally manipulated documents and images can fool the human eye but not a robust, AI-powered KYC automated solution. 

When fraudulent transactions go through, or there is some data theft, or sensitive information is compromised, the company suffers monetary and reputational damage. They may even be fined for non-compliance, and negligence and could face lawsuits. To avoid these unfortunate scenarios, AI in KYC automation processes can significantly improve efficiency and decrease the chances of fraud. ‌‌