Written by Rose Bella | May 18, 2021
Traditional operations are being digitized by technological innovations. The past two decades have modified the world dramatically. What was seen in sci-fi movies or comics is now a reality. Be it video calling or driverless cars, the dreams have come into reality.
But there is no good situation in the world, the crimes are also altered. Now a criminal can steal money with a lot of ease and fewer chances of getting caught through hacking an online payment channel. These activities push the need for AML and KYC compliance by businesses.
Know your customer (KYC) is a procedure of verifying the data given by customers. Businesses were finding a method for online identity verification that can confirm the personal data of customers remotely. Luckily KYC fulfills all of its requirements, it is an automated and robust process of customer identity verification. The process is carried out by AI-powered software without any manual intrusion.
Below are the verifications performed in the KYC process:
The documents uploaded to the KYC software are authenticated at this step. As a customer is verified by government-issued ID documents like an ID card. It is checked that the documents are original and legitimate. The originality signs like holograms, stamps, or rainbow marks are examined. Documents with crumpled edges and folded corners are not accepted. Fraudsters try to crack the verification process by uploading fake and photoshopped documents. The AI-powered KYC software is efficient enough to spot any attempts of forgery.
Facial recognition means verifying a human face with an image video or lives facial data. Facial recognition is performed to confirm that the document actually belongs to the person who claims its ownership. The live captured selfie is cross-matched with the photo ID.
The address data is extracted from the document using OCR technology. It is capable of reading information from all types of languages, scripts, and fonts. The address is then converted into the desired format and language of the business. Normally businesses follow the international address format. It is easy to trust a customer with a verified address, as it helps in creating a legitimate and reliable identity.
When it comes to online gaming platforms and telehealth services, age verification is very essential. It assists them to provide appropriate services to their users. Minos often gets involved in age-restricted content while using the internet.
The KYC software extracts the date of birth and calculates age from it. Then it validates that this age falls under the specified range or not. Businesses have different age criteria for customer onboarding. The most common is 16 above, applicable for all websites and businesses.
The KYC process is designed in such a way that the customers have to do the minimum effort. They just have to upload images of ID documents and selfies, the rest is done by KYC software. Under know your customer regulations, every financial institution is obliged to perform KYC on every onboarding customer. It helps in controlling rising cases of identity fraud.
Criminals have to hide and shield their illegal proceedings for using them in the system, this act is known as money laundering. It is a global crime and individuals or businesses can be penalized if they have any involvement in this crime. Anti-money laundering is the collection of regulations, rules, steps, and practices curbing money laundering. Customers undergo background checks, criminal watch list screening, and continuous monitoring in AML.
AML screening is a part of KYC verification where firstly identity is verified then the risk level of the customer is analyzed. For example, while opening an account for a new customer, the bank will check if he is involved in money laundering or not. It is done by searching his name in global criminal lists and politically exposed persons (PEPs) lists.
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