Video KYC Mechanism - Digital Framework to Control Fraudulent Actions

The economic revolution in Asia and the Middle East is the result of rapid digitization. The economic indicators in these regions are translated on digital parameters. These resourceful regions are benefiting from digitization, but challenges are at the heart of the technology explosion.

Oil, gas, and other natural resources abound in the Middle East and Asian countries. Their economies are benefiting more from digital revolutions. Similarly, despite Europe's lead in digitization, there are still various European regions where technology is evolving to best serve the needs.

According to Bloomberg, a UK bank used the e-KYC video verification process to prevent 335 million pounds in fraud. It accentuates the significance of the video KYC in the banking sector.

Brief Overview of Video KYC 

Video KYC verification is an identity verification process that uses the customer's video to verify their identity. A live video call is enough for verification within no time. It is quite an authentic procedure.

Role of Pandemic in Video Remote Verification Trend

Due to Covid-19 restrictions, the world became digital, and the virtual road was not a smooth one, but it was full of challenges. Various parts of the world were already working in the digital sphere but the pandemic accelerated the trend to the next level.

Every industry was connected to the internet including fashion, entertainment, and food. Businesses and conferences were also virtual. The importance of video KYC has increased manifold. With the rise in new digital trends, scammers also found new ways of fraud for ill gains.

A number of organizations and even banking channels are using video call KYC verification for compliance purposes and to keep financial criminals at bay.

KYC and AI Integration to Combat Money Laundering 

Digital technology is fastly reshaping the world and the financial sector is one of the largely influenced domains. Organizations are unprepared for data and financial risks because technology-driven industries are more vulnerable to criminal activity.

It is no more affordable for businesses to ignore KYC as it is used as a ladder to launder dirty money to illegal accounts. Video KYC is incorporated with AI algorithms to detect the fake identity of the customer. Money launderers use impersonation to conceal their original identity for illicit assets transfer.

FATF and IMF emphasize high-risk states implement end-to-end video identity verification for transparent data flow and financial processing.

Steps to Video KYC Online Procedure

KYC is the most important step of customer verification and digitization requires more advancement for more accuracy. Let’s take a view at some of the key steps.

1. Video KYC Call Agent 

The organization or the bank schedules the video call for identity verification. A rising number of frauds has compelled online businesses to implement video KYC processes for proper verification and crime reduction.

2. Liveness Check Procedure 

The customer needs to be on board to attend the real-time video call where the liveliness of the client is checked to validate the identity. The verification process also includes random movement of body parts and real-time image capture, among other things.

3. AI-Integrated Models for KYC Verification

Artificial Intelligence is briskly changing the financial system and video KYC matches face patterns with documents to check the original identity. AI-enabled models help to detect fraudsters.
 

Why is Video KYC more Reliable?

The Internet revolution has taken the financial world to the next level. Businesses are more cautious of fraudsters because the modern financial system is vulnerable to criminal attacks.

The electronic video verification process is more commonly used to trace the fraudulent plan or even any such action. It utilizes artificial technology methods to recognize the actual identity of the client. The live interview is conducted using a video platform for better and smooth customer service.

Hurdles on the Way to Proper Video Verification

1. Lack of Compliance Procedures & Implementation

Video call customer verification is not yet available in the GCC or in many other parts of the world. The dilemma is that compliance mechanisms and regulations are weak that need to be addressed. Furthermore, in the banking sector or in corporate institutions, video identification is not even properly addressed.

2. Lack of Skilled Labour to Ensure AML 

Using advanced models and algorithms, artificial intelligence is the best practice for reducing crime. Without skills, technical personnel is insufficient to operate AL-powered equipment. It allows more opportunities for fraudsters for illegal activities.

Final Thoughts

It all boils down to the fact that digital financing is a revolution in the modern era, where financial institutions are expanding at an unprecedented rate. Some jolts reshape a new environment. The pandemic taught new methods of digitization to the world where more precision and accuracy are attained in less than no time. Video KYC is one of them.

The advanced video call KYC solution demonstrates safe identity verification. AI-based solutions' initial target is scammers. Best practices and compliance procedures continue to provide the most anticipated service to the business sector.