Fraud is a common cause of danger to most people in today’s world. With so many opportunities to earn from this digital world like the newly introduced markets of cryptocurrency and NFTs which are profitable as well as growing rapidly each day. Still, most people are afraid to invest their shares in online platforms. The main reason for digital scams is the theft of identity. With identity theft, the users are exposed to multiple risks of breaches and privacy leaks, many attackers use the fake identities to launder money from these online platforms.
KYC compliance is followed worldwide to tackle the rising issue of money laundering and identity stealing.
What Are KYC Documents?
The document verification process is a part of every institution to ensure the customer they are onboarding is not a false one. Because of the increase in identity stealing issues among various online and offline businesses the KYC document verification process is make compulsory as per law in accordance with the AML (Anti Money Laundering) act to safeguard the finances of the customers. The list of documents varies from organization to organization for the verification of their customers. The documents which every organization requires are official and legal paperwork of the customer which are issued by legal authorities. Those documents include:
The identity card is request by each and every organization as it consists of all the require identity information of the user. It is legal proof that is issued by the national office of the country. The new identity cards have embed microchips that contain the computerized information of the user as well such as biometrics and other digital user data.
The passport of the user is request by every travel institution in the world to gather customer information at the time of passenger onboarding. Passport document carries all the require traveling information of the user. So passport verification process is make mandatory for the prevention of travel scams and frauds.
Financial Slips and Documentation
The financial institutions (FIs) such as the banking sector and the tax offices require all the banking statements of the customer before any onboarding process in the FIs. The banking statements prove the identity and other assets of the customers which they claim at the time of registration.
Other documents which are require include utility bills for address verification, previous working documents for proof of identity, and experience in any relevant field, license e.g. driving license, and other legal paperwork of the customer
How To Verify KYC Documents?
The KYC system of verification has evolved into digital systems with time. Online verification is also very fast and more secure than the manual methods of KYC verification. With the online document verification technique, different tools and technologies such as AI and OCR provide sustainable results.
The user who is queue for onboarding prepares all the require documents request by the organizations as per their policy. The documents are then submit to the KYC document verification system for further processing. For online submission, the documents are upload to an online platform for validation.
To verify the KYC check on the authenticity of documents, the documents are validate to check for any sort of fakeness or replica. The replicate documents are use by the attackers to get access to the system illegally. Different validation checks are apply to the documents to verify their integrity. With a digital system, online algorithms process the images to check for manipulation or forgery of the documents.
The documents of the user are further process after the validation phase. For the verification of the user identity, the information from the documents is extract and compare with the user-provide information. All the major fields such as the name of the customer, age, and address of the client are verified. Some critical firms also involve legal authorities for the verification of the documents of the client. The digital document verification process involves the use of OCR to extract the data from the digital copy of the document uploaded by the user.
Wrapping It Up
To summarize, the KYC check is compulsory for every organization in the fight against identity theft and money laundering. In KYC there are a number of verification checks for the users and clients which are mostly carried out at the time of the customer onboarding process. To verify the customer completely the KYC document verification operation is perform as a critical part of the KYC compliance.