Digital transformation worldwide has streamlined payment systems, asset management, and fundraising. To facilitate customers and prevent fraud, it has also modernised business loan procedures and investments. During the pandemic, all businesses shifted to online platforms, and so did the fintech sector. In this case, digital banking in the form of Fintech is getting popular so is the need for digital identity verification procedures. Online ID verification is important not only for fraud prevention but also for sticking with the latest KYC & AML protocols. Traditional identity verification had numerous loopholes, which increased the demand for a robust system. In this light, experts introduced video checks which can verify user identity in real time with the help of AI & ML algorithms.
A video-based identification process identifies and validates user credentials through a live video call session. This actively fights online fraud and attracts genuine customers from worldwide.
Video checks are a convenient and reliable procedure in which a KYC professional guides the customer throughout the onboarding process. Video KYC is a foolproof approach that facilitates Fintech businesses to attract a genuine customer base. Additionally, KYC & AML compliance becomes easier to follow with the application of video checks.
In the video checks procedure, real-time identity verification occurs and the professional guides the end-user to show government-issued documents in front of the camera for record verification. The expert also asks a few questions to detect any signs of manipulation and discourage bad actors quickly.
Fraudsters make use of innovative technologies to achieve their malicious purposes Criminals use fake/stolen credentials to win instant financial rewards. Perpetrators use various manipulative strategies to bypass the security protocols of the fintech industry. Utilising video checks create a powerful defence mechanism that prevents fraud and discourages bad actors in real-time. According to the latest regulations, digital payment platforms and crypto businesses must validate customers’ identities before establishing relationships with them. With video Checks, financial firms and ICO providers can perform an in-depth KYC procedure.
Crypto businesses must ensure transparency in their systems, according to the latest regulatory objections. The state-of-the-art video checks are a perfect solution for identity verification because it uses liveness detection and AI-mapping features. Checking the live presence of onboarding customers discourages spoof attacks. Thereupon, the risk of identity theft, money laundering and terrorist financing reduces with the help of video checks.
Video-based identity verification is a foolproof method of preventing fraud and ensuring compliance with AML/KYC regulations. The complete process of video KYC is as follows:
- The new customer must go through the registration process on the company website.
- After completion of the registration procedure, the KYC professional connects with the client for real-time ID verification.
- The expert guides the customer through the whole process during a video call. The liveness detection feature ensures the live presence of a customer at the time of ID validation.
- KYC professional takes consent from the client for data collection. In case the customer does not give consent, the identity verification procedure halts immediately.
- The professional also asks the client to show their government-issued ID records for verification, such as ID card, passport or driving licence.
- KYC experts also require the customer to display the front and back of the given records to identify the holograms in the records for authenticity.
- KYC professionals have the training to identify manipulations in given records. Experts also detect the body language of the customer to catch signs of deception.
- To reduce errors in the final output, video checks use facial recognition technology that performs background checks and uses AI mapping features for fraud prevention and instant ID validation.
- Once the face and document are verified, the video identification process is done, and the results will be sent to the back office.
Modern-day fintech businesses are offering innovative digital services for their customers worldwide. With time, the need for online ID verification is growing because of increasing money laundering and terrorism financing cases. Fintech companies can use smart video checks to prevent fraud and protect their sensitive data from external attacks. In this approach, the customer gets in touch with a KYC expert who validates their identity through official documents as proof of identity. Additionally, KYC professionals ask a few questions and the new client must answer to mitigate the risk of fraud.
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