Identity is the most significant and sensitive asset of a human. Identity consists of the characteristic that makes a person partially or completely different from others, for example, a name or employee number. Different KYC verification techniques are used to confirm that the person is the same who he claims to be, like 2-factor authentication. The KYC verification techniques are not limited to this. There are many others, we will discuss KYC verification techniques and different ways of performing it.
What is KYC Verification?
It is the abbreviation of Know Your Customer or Client. KYC is a well-known term in the financial sector, KYC is a process of verifying the identities of customers while account signs up or after regular intervals. Under KYC and AML (Anti Money Laundering) regulations, all financial service providers are obliged to verify the identities of their customers.
Afterward, the verified customers are screened against sanction lists to spot potential money laundering. Now, as the customers are onboarded through remote means, the verification techniques should also be digital. There is no room for manual or traditional verification of compliance.
Conventionally, banks verify their customers manually. They arrange physical meetings with customers. And staff does the scrutiny of documents. The tedious process irritates the customers and the B2C relation stands on weaker grounds. Banks are now also verifying transactions through Know Your Transaction KYT verification. Then it ensures the identity of customers before every transaction.
Here are different verification techniques;
2 Factor Authentication
This method is very helpful for confirming the email address or mobile number. We sent a code to phone or email, the user has to provide that code also for successful account sign up. The business can confirm that the user provides their data correctly through 2-factor authentication. The process is very simple and recognizable thus like by users and used by most online businesses. We can also use it for account sign-in. It can secure accounts even if someone steals the password. The scammer also has to provide the code sent to the mobile for login. We can limit illegal access to online accounts using 2-factor authentication. 2-factor authentication requires a mobile phone in possession of the user.
KBA verifies the identity of a person by analyzing the responses to specific questions. The questions generally consist of that information only one person can possess. These questions should be difficult for others to answer but easy for a particular person. Usually, there are multiple-choice questions. We can enhance the security of KBA by adding a time constraint limit to answer a question.
As the person is using social networking, the security of KBA is decreasing. A fraudster can discover the answers by stalking different social media accounts.
This is getting more limelight nowadays, as mobile phones and building entrance systems are using it. Biometric verification means authenticating the identity through physical or behavioral characteristics. This eliminates the difficulty of memorizing passwords or answering questions. There is no need to carry mobile phones while verification. It also gives the ease of touchless verification. As the person does not require to touch the scanner in facial recognition.
There is also a thought that you can steal biometrics. Because the user pictures are everywhere on the internet. This can be an issue with old facial recognition systems, but not the advanced ones. They use live detection to ensure the presence in front of the camera.
Wrapping it Up
No matter what verification techniques a business uses, it should secure the data and user accounts. Be it 2-factor authentication or KBA, all have their pros and similarly cons. Facial recognition is a better option in this case, rather than fingerprints or 2-factor authentication. It will give confidence to users while accessing their accounts.