6 Steps Of User Verification Through KYC: It’s Not as Difficult as You Think

User verification is a crucial task for online businesses; currently, Know Your Customer (KYC) is the best method to classify real and fake users. With the arrival of technology, the application of the internet for daily households has increased. It is not incorrect to say that the internet has become a life necessity after food, clothes, and shelter.

Everything is just one click, from ordering a product from an e-commerce store to watching a live football match. Now the internet knows more about a user than the user himself. It has become essential for companies to have a worldwide website. It helps the business for engaging customers from other geographic regions of the world. Users have created their digital identities by making online accounts on websites.

Unfortunately, identity theft cases have evolved at a swift pace from the past couple of years, especially after the pandemic of COVID-19. 2.18 billion fraud reports came into existence, and imposter scams were the most common scam that came into existence. In 2019, frauds evolved from 1.74 billion. This loss has climbed year after year and hit the figure of $3.3 billion during 2020.

The problem arises how a website will conduct user verification to classify its users. The most efficient method of user verification is Know Your Customer.

6 Steps of User Verification – Know Your Customer (KYC)

Know your customer is the method of user verification incorporated in numerous infrastructures to combat fraudulent activities and unauthorized access. For example, a bank customer is verified by the bank employee through his ID card. Likewise, users are verified by their IDs through online software.

Know Your Customer (KYC) is mainly adopted by Financial Institutions in which they verify the identities of their customers. The reason is this sector is most affected by identity theft due to the involvement of cash in it. Criminals try to use legitimate customer identities to withdraw or steal money from accounts. Websites can use the same process of verification to curb digital identity theft.

The verification is done by online software remotely; users do not have to visit a specific office. Here is the process of how to Know Your Customer (KYC) can be implemented on websites for digital ID verification during customer onboarding.

Information Input

This is the first step of user onboarding; he gives his data to the websites. It depends on the website which type of data it requires. For example, a school website needs an educational history of the user, while a health website needs height, weight, and blood pressure. But the name, birth date, and address are common in all sectors. That’s why this information is used for user verification.

Document Uploading

The user is required to upload a document’s image supporting his bio-info to the website. Only that document is accepted for user verification issued by the government and hasn’t expired yet. Below are the documents that can be used for user verification:

  • Government-issued ID Card
  • Driving License 
  • Passport

Data Extraction

There was a problem with how the data will be extracted from the image. Optical character recognition helps in that. OCR technology can capture data from images and scanned papers. It first locates the data in the image and then plucks it word by word.

Also Read: Top 5 Benefits of Public Key Technology

Document Verification

The originality of the document is confirmed in this step. Documents issued by the government have some traits that make them different from other documents like:

  • Stamps
  • Holograms
  • Rainbow Prints 
  • MRZ Codes

Fraudsters try to fake documents using the above characteristics but are caught by AI-powered Know Your Customer (KYC) software. It looks for micro prints, format accuracy, and crumpled edges to distinguish real and fake documents.

Also Read: How Can AML Screening Software Restrict Potential Money Launderers

Facial Recognition

In this step, biometric authentication is performed on the user’s face and image on the document. For that user is required to upload a live selfie. The facial characteristics are compared in facial recognition. Artificial intelligence-powered face verification solutions are accurate up to 98% and efficient. Face verification solutions provide 3d liveness detection and identify deep fakes. 

Also Check: Why To Seek Employment Verification And Screening Services?

Delivering Results 

If all the above verifications are successful, the user is marked as legitimate and verified. The results are shown to the user screen and sent to the back office of the website. It means that the user is trustworthy enough to do business with, and there are no fake or synthetic identities.

Also Check: Employee Recognition Software: Understanding Its Key Features & Cost To Develop

Wrapping It Up

The above discussion precisely explains the process of user verification through Know Your Customer (KYC). Businesses that are at risk of identity fraud can use KYC to make their online platforms more secure. It will give more security to their channels, and they will have a higher customer satisfaction level. Know Your Customer will also assist in compliance with international AML/KYC laws.

Also Read: Know Your Patient (KYP) Service for Patient Identification – Next Big Trend in the Healthcare Sector

Featured Image by Gerd Altmann