KYC Process: Eliminate the Fraudulent Activities During Digital Transactions

KYC Process
KYC mean Know Your Customer, Which is the process of authentication

Technological advances have simplified the regulations of companies, but they also have some dark sides, as they have paved the way for hackers. The scammers find it easy to steal the log-ins of the customers, and then use them for their illicit purpose. Digital transactions are very convenient for the clients, but their information is not secure in it. To mitigate all such concerns it is suggested to comply with the process of KYC.

What is the e-KYC Process?

The e-KYC is the electronic version of the biometric solutions, this is used to check the profile of the user and the risk linked with it. Businesses have to verify the suitability of their customers so that they can make their policies for them accordingly.

The use of these advanced solutions is not limited, the organizations can even examine their employees through it. There is a possibility that clients during the interview misrepresent their identity, the companies can use the Kyc process to certify whether the person is authentic or not. In this way, the risk linked with the company’s employees can be lessened.

The companies can also verify their business partners, they can certify that they are collaborating with the right company. It is essential to get the comprehensive data of the other party before getting into any legal commitment. The organizations can check the authenticity of their investors, and ensure that they are low-risk users, otherwise, the companies have to face serious consequences.

History of the KYC Verification Process

KYC is not a new thing, banks have been using it for so long, because these industries are always at the edge of data breach. Therefore they properly verify the profile of the user, check their source of income and monitor their activity. In the past manual means were required to verify the profile of the user, and now the latest tools are used to check it. 

How KYC Controls Money Laundering?

The money laundering cases are increasing daily, the economy has to suffer huge losses due to such crimes. To control all such issues, the regulatory authorities have to drive the ways that are for the well-being of the companies. These rules are to prevent the organization from data breach issues and safeguard them from money laundering. These solutions certify that the user is earning money through legal means.

What are the KYC Process Steps?

The KYC is a continuous process, it is a never-ending action, it begins with the identification of the customer, then analyze the risk rate and monitoring their activity. For the clients, the basic KYC is done, but if the user has high risk then their enhanced due diligence is performed.

  1. Customer Due Diligence

Client due diligence is the process of KYC, in which the user information is checked. The system verifies their name, identity card, bank statement and location. The scanner compares this record with the previously stored record, if both are the same it means that the client profile is safe to collaborate with. The users that show a high risk rate, means the companies have to take measures so that they can protect them against data breach issues.

  1. Enhanced Due Diligence

The enhanced due diligence is done on the high-risk clients, in which the system checks their source of income, residential address and bank details. The regulatory authorities have made it essential for the organizations to follow these rules, otherwise, they have to bear the loss.

How can Companies Onboard Global Clients through the KYC Process?

The KYC verification process is a digital procedure, in which no involvement of the user is required. The companies can even shift their businesses digitally, in this they save their office expenses and the utility bills change. The latest tools perform the validation of the customer and the company does not require any employee for this task. The companies can lessen their salary expenses and can utilize this amount in any other project. Therefore the companies can even onboard the global users, in this way, their profit is multiplied through it.

Final Words

The KYC process mitigates all the fraudulent activities, these tools discourage all the data breaches and money laundering cases. These digital verifications onboard the clients, validate their identity and check their source of income. Different steps are involved to determine the risk of the user, then their profiles are made and they are treated accordingly. Developed countries use these solutions because these tools increase their profit rate. The company’s success is impossible without integrating the latest technology.

Sanket Goyal

Sanket has been in digital marketing for 8 years. He has worked with various MNCs and brands, helping them grow their online presence.

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