Video KYC or E-KYC: Which is a Feasible for ID Verification?

Almost every business has an online website and most of them offer online shopping, confirming the identity becomes a crucial task in this case. Financial institutions especially FinTech are providing online services for their customers. The customer can transfer his funds to another account without visiting a bank. 

Why is ID Verification Inevitable for Online Businesses?

The online environment is vulnerable to numerous risks and crimes. Protecting online users’ information is becoming a critical task for online businesses. Cybercriminals are always disrupting the online spaces. Their ultimate motive is to get financial benefits either by scams or identity theft. 

Identity Theft is at Rising

Identity theft is a cybercrime in which authentic user data is stolen or hacked, and a new online account is created using his information. The data is accessed through phishing or other social engineering tactics. The most infamous use case of identity theft in social media. 

A criminal uses the name, profile picture, date of birth, and background details while signing up for the social media account. Then he proceeds with his illegal activities there i.e. asking for payment transfer from the actual user’s friends or using harsh language with them. 

In another scenario, the account of the users is illegally taken over. This is also done in the same way as identity theft, by cracking their passwords. 

Tightening Anti Money Laundering Regulations 

Financial institutions also possess the hazard of money laundering, an illegal activity for shielding ill-gotten funds. Money is laundered in banks using fake or taken over accounts. The criminals use multiple accounts to launder money, it becomes easy to place, circulate and integrate illicit funds through this. 

A bank can be fined for not preventing its channels from money laundering. All the businesses in the financial industry are required to verify the identity of every onboarding customer.

What are the Available Ways of ID Verification? 

The conventional method of identity verification is by meeting customers and checking their documents manually. The process is time taking and demands extra resources and efforts, furthermore, customers are not comfortable with it. The manual ID verification method does not comply with modern-day customer demands and speed requirements. Online businesses can’t afford and implement it. The need for some robust ID authentication is becoming inevitable.

Luckily two methods fulfill all the above requirements.

Digital ID Verification (E-KYC)

The verification is performed by AI-powered software that uses OCR technology for data extraction. Only documents approved by the government are entrusted to verify the identity of a person like an ID card. 

It is a comprehensive process but takes only one minute to complete. Below is the verification performed in this process:

• Biometric Verification
• Address Verification
• Age Verification

The image of the ID document is uploaded along with a selfie. The image undergoes document authentication. If marked authentic, then is used for verification. Facial recognition is conducted on selfies and photo id. The address is extracted from the document, the age is calculated using DOB and confirmed if it falls under the specified limit. A verified address helps in the onboarding of legitimate customers.

Video ID Authentication (Video KYC)

This is like a live video interview conducted by an expert who conducts the verification process. The user and expert are linked over a live video call, the documents are presented to the camera. The expert clicks the screenshot and the software validates the document. Facial recognition is carried in real-time by the expert and software.

In a Nutshell

Video ID verification also has proof in the form of video and has high human interaction. The video KYC is a more extended technology. While E-KYC is a vast technology and used globally. A business can go for any of the solution i.e. which is more suitable.