KYC: 3 Steps to Achieving Know Your Customer Compliance

The financial and corporate landscapes are fast changing in the current digital era. The expansion of online transactions and the development of technology have made strong Know Your Customer (KYC) compliance essential. Verifying a customer's identification is known as KYC, and it is done to stop fraud, money laundering, and other illegal actions. The introduction of eKYC (Electronic Know Your Customer) and digital KYC has revolutionised the way organisations onboard customers. 

Traditional KYC processes required mountains of paperwork and in-person verifications. In this article, we'll examine the idea of eKYC along with digital KYC, the benefits it brings, and present a step-by-step tutorial on how to accomplish KYC compliance using electronic KYC and digital KYC approaches.

Understanding eKYC and digital KYC

What is eKYC?

Electronic Know Your Customer, or eKYC, is a paperless, online means of confirming a person's or company's identity. To speed up the KYC procedure, it makes use of digital technologies like biometrics, OTPs (One-Time Passwords), and Aadhaar authentication. Speed, accuracy, and simplicity are just a few of the benefits that eKYC offers, making it the perfect choice for both companies and financial institutions.

What is digital KYC?

All digital techniques and tools that are used to confirm customers' identities fall under the umbrella phrase  "digital KYC." eKYC is a part of digital KYC, but it can also refer to techniques like video KYC, document verification with AI, and more. It is an extensive approach to KYC compliance that utilises technology to guarantee the veracity of customer IDs.

Advantages of eKYC and digital KYC

• Cost-Effective: Digital processes allow firms to cut costs by doing away with physical paperwork and manual labour.
• Convenience: Customers can complete the KYC procedure at their convenience from the privacy of their homes or businesses, making it more accessible and convenient.
• Enhanced Security: To add an additional layer of defence against fraud and identity theft, advanced security techniques, including OTP-based eKYC and biometric verification, are used.
• Regulatory Compliance: eKYC and digital KYC systems frequently include compliance capabilities that aid firms in more successfully meeting regulatory standards.
• Efficiency and Speed: eKYC and digital KYC procedures are far quicker than conventional ones, which shortens the time required for customers to be onboarded.
• Accuracy: Automated data validation and verification lower human errors, assuring accurate customer data.

3 Steps to achieving KYC compliance

Step 1: Access to eKYC portal

Accessing a reliable eKYC portal is the first step in obtaining KYC compliance using eKYC and digital KYC. Businesses can incorporate eKYC solutions from a variety of service providers into their onboarding procedures. Below are the steps for you to follow:

• Researching and choosing a seller: Look for eKYC service providers that suit the demands of your organisation and your sector. Think about things like a company's reputation, compliance with rules, and the variety of services it provides.
• Enrol or Register: After deciding on a supplier, sign up for or register with them to use their services. Typically, to do this, you must register for a username and password on their site.
• Integration: Connect the eKYC site to your current customer verification or onboarding procedures. Technical software or system integration may be required.

Step 2: Conduction of online eKYC

You can now start doing KYC for your clientele online thanks to the implementation of the eKYC portal. Here is how to perform eKYC online:

• Customer onboarding: Ask new users to finish the KYC procedure when they sign up for your platform or services.
• Get customer information: Obtain the essential customer data for KYC requirements. Personal information, identity documents, and contact details may be included.
• Verification Techniques: To assure the accuracy of the information provided, provide a variety of verification techniques, such as biometric authentication, Aadhaar eKYC, or OTP-based eKYC.
• Document Upload: Allow consumers to upload scanned or digital versions of their identification documents for verification if necessary. Make sure the procedure is simple to understand and adhere to.
• Real-Time Validation: Make use of the eKYC portal to instantly verify the customer's information. Cross-referencing the submitted information with official databases and records may be necessary for this.
• Verification Status: Quickly inform the customer of the verification status. They can use your services if the verification is successful.

Step 3: Data storage and compliance

The last step entails safely keeping client data and making sure that data protection laws are followed. This is how you do it:

• Implement strong encryption techniques to safeguard consumer data from unauthorised access. Utilise data storage options and secure servers.
• Compliance inspections audit your eKYC procedures on a regular basis to make sure they comply with applicable legislation, such as GDPR, HIPAA, or regional data protection rules.
• Policies on data retention, which is Establish precise data retention guidelines that specify how long client information will be kept on file and when it will be safely removed.
• Obtain the explicit consent of the customer before collecting and using their data. Let them know how their data will be used and shared, and give them the option to decline if they so desire.
• Data security training is essential to preventing data breaches and improper management of client information.

You can use eKYC and digital KYC approaches to achieve rigorous KYC compliance by following these procedures, guaranteeing that your company or organisation operates legally and safely.

Conclusion

In summary, eKYC and digital KYC have revolutionised the KYC process by improving security while delivering speed, accuracy, and convenience. Adopting these techniques benefits organisations as well as customers, who can take advantage of a seamless onboarding process without sacrificing security and privacy. Remain obedient and safe.

Veri5 offers identification and digital solutions that assist businesses in boosting conversions, reducing fraud, and adhering to regulations. They enable their clients to focus on what they do best and increase their revenue by managing KYC, user onboarding, digital signatures, and payments while providing a swift and faultless customer experience.