In an era where transactions, whether they are financial or commercial, have transitioned to online platforms, convenience often comes hand-in-hand with more challenging threats, such as identity theft and fraudulent transactions. It is the responsibility of service providers to digitize the identity verification process in order to enhance security measures.
E-KYC or Electronic Know Your Customer, stands out as one of the best solutions to bolster security for digital transactions. It offers both convenience and accuracy, thereby improving the customer experience and providing heightened security—two critical factors that service providers should prioritize.
Learn more about e-KYC in this article.
What is e-KYC?
E-KYC, short for Electronic Know Your Customer, is the digital identity verification process primarily used in businesses, particularly in the banking and finance sector, which demands an accurate and dependable verification system to prevent identity theft and fraud.
In the era before digitalization, KYC, or Know Your Customer, relied on document-based identification methods to verify an individual's identity. For example, when opening a bank account, a bank would typically require an ID card as proof of identity.
However, in today's digitally transformed world, all financial and commercial transactions have transitioned to online platforms. E-KYC was specifically designed to address this shift, simplifying digital identity verification without the need for paper documents or physical visits to a bank.
E-KYC harnesses several technological advancements to digitize the verification process. This includes Optical Character Recognition (OCR), which can identify characters within images of documents, such as ID cards or passports, convert them into digital formats, and store them in a secure database. Additionally, e-KYC incorporates biometric verification technology, which identifies individuals based on unique biological traits like facial features, fingerprints, or voice. This technology is commonly found in facial recognition systems that approve transactions within mobile banking applications.
How does e-KYC work?
Customers begin by registering into the system, which involves providing personal information and uploading images of documents such as an ID card or passport.
The OCR system extracts information such as the customer's name, address, and identification number from the uploaded documents. This information is then compared with the details the customer provided during registration to ensure accuracy.
Customers are verified through their biological traits, primarily their face (although fingerprints can also be used). For facial verification, a face detection model identifies the customer's face in the uploaded document image. A face embedding model then converts this facial image into a machine-readable format for the system to recognize.
Customers are required to take a selfie and upload it to the system. The face detection and face embedding models process the selfie, and a liveness detection is performed. This step ensures that the customer is live and physically present in front of the camera, preventing spoof attacks.
The system compares the facial features extracted from the uploaded document image with those from the selfie. Feature extraction is used to identify facial components. If the system confirms that the two images belong to the same person, the transaction is approved.
The system stores the customer's data for future transactions and continuously monitors all processed transactions to detect any suspicious or unusual behaviors.
E-KYC's use cases across industries
Banking and Finance: The banking and finance industry heavily relies on e-KYC for various transactional processes, including opening bank accounts, applying for loans, and conducting digital transactions through mobile banking. E-KYC plays a crucial role in preventing identity theft and fraud.
Telecommunications: In the telecommunications sector, e-KYC is employed to verify customers' identities, simplifying the process of registering new SIM cards or phones, and making it quicker and more convenient for customers.
Insurance: Insurance providers can leverage e-KYC to verify policyholders and facilitate the claims process.
E-Commerce: E-KYC enhances online shopping by enabling the verification of sellers and buyers, thus preventing fraudulent activities and expediting transaction processes.
Healthcare: E-KYC can be utilized to verify patients and streamline the patient registration process. It also accurately records patients' medical histories, making it easier to facilitate subsequent visits and eliminating the need for complicated and time-consuming manual data entry.
Tourism: Airlines and hotels can use e-KYC to expedite ticket sales, room bookings, and check-ins, simplifying processes and providing customers with more seamless experiences.
Government Agencies: E-KYC can be integrated into various government services, such as using biometric verification for applying for or renewing ID cards. Citizens can also register for benefits and financial aid programs through the e-KYC system, making these services more accessible and convenient.
E-KYC delivers a remarkable level of accuracy through biometric verification, relying on biological traits that are exceedingly difficult to counterfeit. Additionally, it deploys a robust liveness detection system, providing a second layer of protection against fraudulent attacks. E-KYC streamlines the registration process, eliminating the need for paper documents and physical presence. It also significantly reduces costs, paperwork, and resource requirements.
Sertis specializes in delivering e-KYC solutions that prioritize security, efficiency, and speed, all while adhering to internationally recognized standards. Our solutions have the power to enhance security, streamline operations, and elevate the overall customer experience across a wide range of industries.
Partner with us to develop a customized e-KYC solution tailored to your unique needs and aspirations, allowing you to lead the way in your industry.
Learn more about e-KYC solutions from Sertis: https://www.sertiscorp.com/th/ai-banking-and-finance