In today’s fast-moving financial world, first impressions are very important, especially when bringing new customers on board. Imagine a customer who wants to invest or open an account but finds complex paperwork and lengthy verification processes. This can make many customers give up. In fact, 74% of potential customers are ready to switch to another company when they face such types of problems.
This shows how important it is to have an easy and quick onboarding experience. eKYC, or electronic Know Your Customer, can quickly and securely onboard customers. eKYC helps verify the identity of new users, ensuring compliance with regulations while offering a smooth and paperless experience.
This way, eKYC can make the user experience better and reduce the risk of human error, making the process more secure. In this post, we will talk about how eKYC works and how it can make your onboarding process automated and more secure.
So let’s begin!
The Evolution from Traditional KYC to eKYC
Know Your Customer (KYC) is a regulation that is designed to prevent money laundering and other financial crimes by verifying a customer’s identity and assessing possible risks.
The traditional KYC method uses manual processes where customers need to submit their physical documents like passports and driver’s licenses. Employees then verify each document and feed the data into the system, which takes a lot of time and could have human mistakes.
With ,digital KYC this process becomes much faster. eKYC uses various technology and data sources. Here’s how it works:
1. Automatic Document Capture
Customers can securely upload digital copies of their ID documents, so there’s no need for physical paperwork. Advanced image recognition technology then verifies these uploaded documents against official records.
2. Optical Character Recognition (OCR)
eKYC employs advanced OCR technology that pulls important information like names and addresses from uploaded documents which reduces the risk of human error.
3. Data Verification and Validation
AI-powered KYC solutions connect to different databases to verify the authenticity of the data while ensuring accuracy and mitigating compliance risks.
What are the Benefits of eKYC Solution for Customer Onboarding?
eKYC transforms the onboarding process, offering many benefits:
1. Time and Cost Efficient
eKYC makes processing times much faster. It completes the process in minutes/seconds which used to take weeks. It speeds up customer approval by reducing onboarding times by up to 80%, reducing the need for manual checks.
This means faster & secure customer onboarding and improved conversion rates. This way, it saves you time and money.
2. Enhanced Security
In 2021, fraud affected 42 million customers, costing $52 billion, which is a huge amount. eKYC significantly reduces these risks by using biometric checks and secure electronic ID standards.
3. Enhanced Customer Experience
When the application/onboarding process becomes easier, fewer people give up halfway. And, when onboarding is quick and smooth, customers are happier and less likely to leave.
4. Improved Data Accuracy
eKYC uses multiple data points and verification methods to stop fraud. It makes sure that all the information given by users is correct, reducing the risk of errors and fraudulent applications.
5. 24/7 Availability and Scalability
eKYC solutions operate around the clock, so customers can complete the sign-up process at any time at their convenience. This is very helpful for businesses that operate in global markets with different time zones.
6. Real-time Update
eKYC reduces human errors and the need for manual checks. It provides real-time updates and notifications about the onboarding process, verifications, errors, and fraud detection to stay ahead of the competition.
7. Compliance
eKYC helps your business meet strict regulatory requirements effortlessly. This reduces the risk of non-compliance penalties.
The Future of Identity Verification
eKYC is transforming how your business board customers, moving from tedious paperwork to quick digital processes.
By 2024, eCommerce fraud costs are expected to reach $206.8 billion, showing the importance of secure identity verification. eKYC not only simplifies onboarding but also boosts security against fraud, enhancing trust between service providers and customers.
Conclusion
eKYC is a powerful tool for automating and securing your customer onboarding process. By integrating advanced solutions, your business can ensure a seamless and efficient onboarding experience for your customers, setting the stage for a successful long-term relationship.