The world has faced prevailing challenges, and to combat such frauds it is essential to adopt KYC verifications. Frauds such as identity thefts, scams, and other illegal activities have destroyed the economy at a bewildering speed.
E-commerce platforms, social media sites, banks, airports, and almost all other businesses are liable to verify the identity of their customers to fulfill the regulatory obligations. But it is not easy to fulfill these obligations as the absence of resources, and data security are the most common problems. KYC document verification is an appropriate solution for all these problems. It is the best way to fulfill the regulatory obligations and gives a safe and frictionless customer experience while providing robust information security.
Need of KYC Documents Verification
False personation is the method of obtaining the fake identity of someone to gain benefits or cause harm to the other person. It can be as simple as creating a screen name that matches the victim’s name and then uploading hurtful or rude comments while pretending to be the victim. Fraudsters’ main motive behind stealing someone’s identity is to gain monetary benefits while some imposters do it just for the sake of posting racist or sexual comments on social sites to cause harm to the victim’s reputation.
It is illegal to steal someone’s identity and is punishable according to federal law. The legislation developed an offense against identity theft, which bans the unlawful use of someone’s identity to commit crimes. The United States Department of Justice stated that this offense, in most cases, includes imprisonment of 15 years as a penalty for not complying with KYC documents.
KYC Documents Verification – Role In Eradicating Frauds
To avoid the prevalence of scams, financial compliance professionals like FinMA, FINTRAC, and FATF have designed KYC and AML regulations that companies are liable to adhere to. These laws guide businesses to undergo proper due diligence of their users. This is achieved by performing verification of KYC documents to identify the customers’ identity to prevent the probability of scams and frauds. E-verify documents include the process of verifying any government-issued ID cards, driving licenses, and passports.
This know your customer (KYC) procedure is done digitally nowadays with the help of artificial intelligence-supported identity verification solutions.
Now anyone can collaborate with businesses through their mobile phones and computers and the representative from businesses can make sure you are who you say you are and that your identity is not stolen.
How to Verify KYC Documents Online?
Companies can integrate AI-backed KYC documents verification into their websites or online applications. At the time of customer enrollment, the technology-driven software asks the user to submit a picture of their identity document and fetches the data using state-of-the-art optical character recognition (OCR) technology. The software examines the information in seconds, and the identification results are delivered to the customers. If the data given by the customer is accurate, the users are permitted to access the website and vice versa.
The identification is done on photo-based government-issued identity documents. The software rejects any counterfeit, false or fake documents.
Some of the fake documents used by the fraudsters are the following:
Modified Documents: these are the altered documents. The imposters change the writing style or the font of the documents to manipulate the higher authority.
False Documents: These are the documents that other people own, but fraudsters steal them and use them for their own benefits. These are the most illegal documents as they are once and for all owned by another user. KYC documents are required to combat fraudulent documents.
Illegal Documents: Even though all these documents are fake, illegal documents have fake holograms, inks, and prints that are changed by the fraudsters.
Is Verification of Digital Documents really Effective?
KYC documents verification software can differentiate between every type of fake and illegal document. It is more effective than the traditional method that has heaps of flaws.
Some of the flaws of the traditional method are
- They are time-consuming
- They tend to waste resources
- Are prone to human errors
- Humans cannot keep track of changing regulations, therefore, cannot effectively verify the documents
The benefits of the digital document verification process are also immense and those are:
- They are accurate
- They are fast and cost-efficient
- Digital documents verification software has artificial intelligence and machine learning therefore can easily adopt changing regulations
Conclusion
Even when so many fraudsters have upgraded their tactics, adopting techniques such as KYC verification and digital document verification can help minimize these impacts. Therefore, KYC documents are an effective way to combat fraud.
