The finance sector is transforming its operations from physical to digital banking. Considering this, institutions are heavily investing in the latest FinTech application to facilitate remote operations. While accelerating digital transformation, financial institutions are facing various challenges such as non-compliance with Know Your Customer (KYC) standards, data breaches, account takeover, transaction scams, and identity theft.
Financial institutions contributed around $25,588.3 billion to the global economy in 2023 which is an increase in its services market at a growth rate of 9.7%. Moreover, they are striving to bring convenience and make virtual banking easier. Integrating online video verification is helping them achieve their objectives. This article further discusses how real-time video identification is bringing efficacy to digital banking operations.
Abstract of the E-KYC Video Verification’s Applications
Financial institutions aim to make their customers’ digital banking experience more secure, and friction-free. By enhancing KYC processes, they are safeguarding client onboarding. In order to put counteracts against criminals in place, banks are integrating online video verification systems. They are using technologically advanced IDV solutions to validate users applying for loans, opening accounts, performing transactions, making high-value investments, and buying insurance.
Online video verification falls among the top trends in digital banking that are reshaping finance systems. These are accurate, error-free, and efficient KYC solutions that use customer facial features to authenticate their real identities. In return, digital banking systems can counter identity theft, document forgeries, and other fraud risks.
Integrating real-time video identification streamlines online transitions by enhancing security for customers. Moreover, banks can reduce complaints, ensure KYC compliance, improve client assistance, and counter fraud risks. Financial institutions are making online video verification a part of their banking systems as it helps counter the following threats:
Synthetic Identity Fraud
Criminals fabricate credentials like valid addresses or social security details and camouflaged Personally Identifiable Information (PII) to conceal their identities. In one way or the other, this attempt empowers fraudsters to escape identification checks. However, online video verification is sure to detect these intentions by deploying a variety of authentication checks such as liveness detection, gesture analysis, biometric screening, real-time presence, and document validation further aid in deterring criminal threats.
The evolution of online payments, mobile wallets, and touchless banking is opening doors to various crime risks. Fraudsters are coming up with sophisticated techniques such as deepfake attempts to breach identification processes. This enables criminals to launder money and escape suspicious detection.
On the contrary, banks are exposed to severe legal and reputation repercussions. However, using e-KYC video verification can deter deepfake attempts. Additionally, these AI-powered IDV solutions offer facial features, retina, and gesture analysis to enhance security.
Criminals use pre-recorded videos, camouflaged selfies, 2D/3D masks, and fake backgrounds add to trick online video verification. In these attempts, criminals pose as legitimate customers and provide accurate but stolen information. In case of inefficient online video verification systems, banks are sure to grant these fraudsters access to digital financial services.
Spoofing attacks are showing a considerable increase in the past few years reaching around 300% in 2023. These criminal attempts expose the confidential information of both customers and financial institutions. Therefore, banks should verify identity by video call to ensure the presence of clients and provide secure onboarding.
Outlining the Working Mechanism of Video Call for KYC Verification
AI-powered online video verification tools are easier to integrate and provide a user-friendly experience by using a step-by-step guide. They are more accurate, faster, and reliable which is why they are readily replacing traditional identification techniques. Online video verification involves the following easy-to-follow steps:
The first step in the video call for the KYC verification process is customer registration. Users are required to enter their PII and sign up to initiate a live call.
Real-Time Presence and Liveness Detection
After registration, KYC experts begin with online video verification and ask several questions from users to detect their liveness.
Live Document Validation
Users are asked to face the camera by holding their identity documents in their hands. The KYC experts then analyze the validity of these papers and facial features.
The last step in online video verification is fetching results after cross-matching facial features and documents by using AI-powered IDV tools. The system then displays results on end-users screens.
Online video verification is a vital component for the banking sector in enhancing its KYC processes. Moreover, financial institutions can provide secure access to mobile wallets, safeguard digital payments, and enhance convenience for customers. Similarly, online video verification provides other services such as liveness detection, voice identification, and gesture analysis. They cross-check clients’ real-time presence. For banks, video KYC of your client is the road to preventing fraud risks and seamless digital operations.