How Does video KYC Help in Addressing Different Types of Fraud?
To prevent illegal activities like scams, thefts, and frauds from taking place, almost every financial institution in India follows the guidelines set by the regulatory authorities. Still, as technology is progressing rapidly, it can be hard for institutions like the Reserve Bank of India and other regulatory bodies to update their guidelines continuously. Thus, financial institutions have started using innovations like video KYC solution providers that can make their functioning more streamlined and secure.
KYC is an important process as it helps financial institutions to get the data of customers and authenticate it quickly. Various types of risks can be associated with the KYC process and so using video KYC solution providers can address some of them. Let us look at them.
Different Types of Frauds and Their Solutions Provided By Video KYC:
- Document Tampering: In the manual KYC process, there is a high risk of document tampering. It can be done both intentionally and unintentionally. During the manual KYC process, the customer has to fill up the KYC form and provide copies of the relevant documents. After submission, the copies can be swapped or damaged by accident. To prevent such things from happening, the tools provided by the video KYC solution providers are the best option. These tools and software come with artificial intelligence-based technology that captures the data from the online documents submitted by the customer and matches it with the central database quickly. The tools of the video KYC solution providers also have in-built features that check if the identification documents provided have been tampered with or not. Everything happens in real-time during the video-based KYC identification process. Thus, the authentication is completed within minutes and the customer receives a notification regarding the failure or success of the video KYC process.
- Location Spoofing: The video KYC tools come with strong location-based intelligence features that help in safeguarding their customers. When the video-based KYC identification process starts, the live geolocation of the customer, comprising of the latitude and longitude is taken through a web browser or mobile GPS. Later when the subsequent steps of instant OCR of the POA document are done, both of these locations are fed into the distance algorithm of the video KYC tool, and the address of POA is converted to geolocation comprising of latitude and longitude. The video KYC tool then calculates the distance between both these locations, and if it is less than 300 meters then the current location gets tagged as the home location.
- Security questions to check if a human is present in the video KYC process: Nowadays, people can use programmed bots to handle and complete various online tasks. The same can also be done for the video KYC process, although the resources and time used will be a lot. Still, to prevent this from happening, the video KYC verification tools have in-built security questions inside them which the customer has to answer during the video KYC process. These questions are given randomly and can be related to anything that a human mind can solve. These tactics make it harder for bots to take over the video KYC process as they lack critical human thinking ability. It also verifies that the customer is physically present and aware of the video KYC process. Thus, hackers cannot complete the video KYC verification through pre-recorded methods.
These are some of the problems of the KYC process and their effective answers provided by the video KYC solution providers. Before you get any particular video KYC tool, check out if it has these and more such features to prevent frauds from happening.
