Identity theft frauds are on the rise daily in this age of digital contact. 2 in 3 Americans, on average, fall victim to identity fraud, according to studies. The increasing number of digital platforms has made it simpler for fraudsters to steal clients’ online identities. Their method of exploiting login details is to use various computerized tools to attack different clients with identity theft. Statistics show that US businesses lost data in the year 2021 due to identity theft costs of $56 billion. Identity fraud also significantly negatively impacts the country’s economic growth.
In order to avoid this problem, all businesses must comply with KYC documents verification procedures.
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Benefits of Document-Based Identity Verification
The user’s documents contain information proving his or her identity. These official documents from government offices verify the customers’ reliability and authenticity. Most businesses only rely on document proof to verify the client’s legitimacy. The complete profile of the customer, including details on their previous dealings, employment history, and historical data, is also provided by document verification. Organizations can thoroughly investigate the user to determine whether there has been any fraud involving the client’s information.
Traditional Document Verification
The majority of clients have dealt with the ID document verification procedure in various business and banking settings. It’s something that financial institutions have been doing for a while now. Customers employ this process each and every time they communicate with the business network. The physical document verification method provides the company with hard copies of the identity proof. Processing the paperwork manually allows them to check the user’s honesty. During the onboarding of a new customer, for example, when opening a bank account, the business performs the document verification procedure.
Digital KYC Documents Verification
Modern technologies have created new and efficient systems for working and conducting businesses. The time of transition from the traditional world to the digital world occurred during the time of COVID-19. To authenticate the customer, the operation of examining identity documents remotely. By uploading their identity documentation to the online platform, users of digital identification, known as electronic KYC document verification, are then verified.
How to Verify KYC Documents Online?
Online document verification has now become a standard practice among most businesses due to the growing number of digital platforms. The digital KYC documents verification method is effective at confirming the identities of the customers despite there being over a billion people online.
Acquisition of Documents
Document verification services provide customers with access to their documents through digital channels. The majority of clients submit documents online, uploading images of their legal certificates.
Digital Validation Check
The digital verification system validates the customer’s documents after being uploaded. Experts examine these documents to verify their authenticity. Attackers illegally manipulate document images before uploading them using a variety of online image processing tools. The AI-based solution to verify images runs multiple photo comparisons to make sure there are no violations.
Online Document Verification
The system continues processing the documents after validating the customer’s information. By using optical character recognition technology, businesses can process data from uploaded certificates online. In order to identify a customer, OCR allows the extraction of data from the documents and the detection of the customer’s identity. Clients are asked for information about their names, birthdates, nationalities, and other aspects of their identities. After the completion of the verification procedure, businesses use the data to confirm users’ legitimacy to access the organizational processes.
Why is Digital KYC Documents Verification Prefer Over the Old-School Method?
The traditional strategy for document verification is no longer effective in the modern world. Performing various verification checks on clients’ documents is more time-consuming and labor-intensive using this method. The process of traditional document verification can take weeks due to the need for the physical identification of the client’s certificates. Furthermore, many organizational staff members will need to participate in manual document inspections. In contrast, digital verification generates results immediately and is a quick process. Additionally, AI sports these systems that make it possible to automate data extraction and verification.
How KYC Documents Help Businesses to Eliminate Frauds?
The document verification process is an essential phase in KYC compliance. The customer receives all the information they require. When the onboarding process is underway, the customer’s documents are examined for identity confirmation. The KYC documents include identification documents like passports, ID cards, and other identification-proving certificates. The processing and document verification processes have become faster with the use of digital systems. It employs artificial intelligence (AI) systems to produce output speedily and automates the process.