Know Your Customer (KYC)
KYC is a process that regulated entities such as banks must adhere to for verifying the identity of customers and potential customers. KYC is a subset of wider Anti-Money Laundering (AML) or Bank Secrecy Act (BSA) regulations and is designed to prevent illegal activities.
KYC is mandated by different regulations depending on the region. In the US, for example, it’s generally known as the Customer Identification Program (CIP) and is mandated by the USA Patriot Act.
KYC procedures take place at account opening and periodically thereafter, or when a customer changes their details. The personal information gathered differs globally based on regulations, the organization’s risk appetite, and the product offered.
Why Is Biometric Technology Important for KYC?
iProov technology is often implemented as part of an identity verification solution to meet KYC compliance requirements. Using Genuine Presence Assurance, banks and other regulated organizations can ask users to complete a brief facial biometric scan during the online onboarding or authentication process. This assures that an individual matches the image in their photo ID and confirms that the user is genuinely present.
This verification helps organizations to assure that the users they are onboarding are genuine users rather than criminals trying to defraud services.
One significant advantage is that this can help organizations adhere to KYC regulations remotely by ensuring users are genuine without seeing them in person. A streamlined, biometric-enabled onboarding process can be a positive differentiator for businesses and greatly reduce administrative burden while aiding KYC compliance.
Shockingly, KYC compliance costs the average bank in Europe $60 million per year. Leveraging a biometric solution such as iProov can help mitigate some of this burden by enhancing efficiency and customer experience during onboarding.
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