Know Your Customer (KYC) refers to the process used to identify a customer’s identity and establish their fraud risk. It involves reviewing financial transactions and evaluating risk factors in order to keep criminal activity such as money laundering at bay. However, most importantly, KYC must accurately verify a customer’s identity before this can be achieved.
This has never been so critical than in today’s fast-moving digital landscape in light of COVID – 19, where the explosion in digital services and applications mean fraud and cyber-crime have hit record levels. Amidst mounting regulatory pressure, the most pressing issue now facing companies is how to verify their customers’ identities in the most secure and seamless fashion. As a result, organisations are recognising that they need a stronger approach to identity verification – with many now realising the value of biometrics.
In order for organisations to implement digital identity technology that satisfies increasingly stringent KYC needs in the most secure and user-friendly way, it will prove critical to reach customers through their personal technology – smartphones. The mobile is now the preferred method for customers to perform daily tasks such as banking and shopping, and must be placed firmly at the heart of any successful digital transformation strategy. Not to mention, biometric technology will be present in 90 per cent of smartphones by 2024. This means businesses already adopting a mobile multi factor authentication strategy for their customers, including device possession and facial or fingerprint recognition, will reap the most benefits.
Businesses can integrate an additional layer of security into identity verification with behavioural and location intelligence, which detects patterns of behaviour unique to the customer, such as the time of day an application is accessed or the way a phone is held. This is being hailed by many as the final frontier in security – reducing fraudulent activity in the most frictionless way.
However, it is important to emphasise that in many areas the digital identity registration process takes place remotely as opposed to a manual one potentially saving costs of 90 per cent. It is truly a critical area for both traditional and challenger organisations to get right.
Ultimately, a strategy of mobile biometrics can assist organisations to meet KYC needs in a way that benefits both the customer and the business. To find out more how VeridiumID can support you moving forward, please contact us at [email protected].