eKYC means Electronic Know Your Customer. Why is eKYC so important?
eKYC procedures defined by mobile operators (SIM Registration) or banks (Opening a Bank Account) involve all the necessary actions to make sure their customers are real, assess, and monitor risks. These processes help prevent and identify money laundering, terrorism financing, and other illegal corruption schemes.
eKYC process includes ID card verification, face verification, document verification such as utility bills as proof of address, and biometric verification. In case of failure to comply, heavy penalties can be applied. eKYC also refers to capturing information from IDs (OCR mode), the extraction of digital data from government-issued smart IDs (with a chip) with a physical presence, or the use of certified digital identities and facial recognition for online identity verification.
One of the key driver of using Biometric identification for eKYC management is that it inculcates a higher degree of security than manual eKYC processes such as passwords, e-mail addresses or PINs which can be hacked using many social engineering techniques and the personal information shared on social media.
The launch of virtual banks across Asia-Pacific is disrupting the traditional banking model. Meanwhile, financial institutions must comply with stringent Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations that typically send new customers out of their preferred (digital) channel for identity verification.
For established banks and up-and-coming digital banks, it’s become a business imperative to streamline the digital onboarding experience and dramatically cut abandonment rates.