Nov 11, 2020
What is eKYC and why it is the future of Know Your Customer?
Probably, you have recently heard or read about the concept eKYC (electronic Know Your Customer). But what is eKYC really? What is the meaning of the term eKYC? We will try to discover it in this article.
The evolution of KYC
As we have already discussed in other entries of the blog, Know Your Customer or KYC is a procedure to identify and verify a customer’s identity. The process consists of a series of checks implemented in the first stage of the relationship with the client to verify that he is who he says he is, taking into account his identity documents and his personification.
This process is affected by a series of regulations in relation to, for example, anti-money laundering (AML), terrorist financing or electronic identification standards and trust services (eIDAS).
KYC practices can be developed both offline (in person) and online (remotely). Here is where we can discern KYC evolution towards eKYC.
If you need more information about eKYC procedures, download this guide.
From KYC to eKYC: Digital transformation
All businesses and economic agents, especially financial institutions and banks, are experiencing a drastic process of digitalization. Digital transformation has been part of the most relevant changes in organizations in the last decade, making that those who forget this task to lose opportunities in their sector or even disappear.
Companies and organizations are struggling to transform and digitize processes that seemed difficult to automate and get remote. However, specialized businesses have appeared in order to achieve this task, using cutting-edge technologies such as artificial intelligence and machine learning to transform and optimize processes.
Companies we categorize as have appeared RegTech, accompanying businesses in the application of regulations and legal procedures with solutions that optimize, improve and reduce the costs of these processes.
What is electronic KYC?
eKYC is the expression used to describe the digitalization and electronic and online conception of KYC processes. eKYC (Electronic Know Your Customer) is the remote, paperless process that minimizes the costs and traditional bureaucracy necessary in KYC processes.
Falsification of identity, signatures and phishing is very common. Specialist businesses dedicated to technological compliance solutions have developed completely secure eKYC processes with zero margins for the commission of these counterfeiting offences and related crimes.
eKYC process is the digital and remote transposition of the traditional KYC process. Weeks needed for its completion become to seconds with a really lower cost in an optimized process.
The identification and verification of the identity of the clients occur immediately, helping businesses to increase their conversion rate up to, for example in the case of eID solutions, 84% and offer a smooth, comfortable and simple experience to their clients. eKYC processes increase customer satisfaction and ensure that clients can make use of the service from the first moments in which the business has contact with them.
To ensure that eKYC processes meet the same safety standards as traditional ones of identification and face verification, companies must implement electronic identification processes with high levels of safety and reliability and following the rules set in AML5 or eIDAS regulations.
Electronic IDentification (eID), a pioneer in the digital identification sector, offers a wide range of eKYC solutions based on artificial intelligence (AI) and machine learning that are helping dozens of companies in their digital transformation at the same time that complies with current regulations.
Our solutions manage to reduce costs and bureaucracy, automate processes, and provide the highest levels of security; away from low-security solutions such as the ones based on selfies.
A sample of several of our eKYC solutions:
- VideoID: The first solution that verifies identity real-time without the need for agents with the same level of security and legality as face-to-face identification.
- SmileID: The only authentication service on the market that can register customers with absolute guarantee in seconds.
- SignatureID: Advanced electronic signature and cross-device solution.
If you want to try the most advanced eKYC solutions on the market, do not hesitate to request a demonstration.