Just like the way traditional banking institutions were used to verify an identity, online KYC verification is performed. KYC verification process steps include;
Collection of Information
The first step in KYC process verification involves the collection of personal information from an online user. The user is supposed to enter all the personal details at the time of account registration.
Ask the user to Upload an Evidence
After collecting information, in the second step, ask the user to upload a supporting piece of evidence as an identity proof. This helps the system verify that the user-entered information is not fake and holds authentic data.
Verification of information
Once the user uploads a document as proof, the document template is identified and examined against several checks. It is to ensure the uploaded document is not tampered or photoshopped. Once it’s validated, the data is extracted. There can be two ways to fetch the data from documents:
Data extraction through OCR in which the system automatically extracts the data from the identity document and check the authenticity of the information.
Data extraction without OCR in which the user manually enters the information and the IDV solution checks the user-entered information against the one present on the identity document.
Customer Identification Program
In the KYC procedure, the Customer Identification Program (CIP) is the initial step. The identification of high-risk customers should be done beforehand to mitigate the risks. The mandate of CIP is to ensure that the entity performing a financial transaction is verified. This is necessary to curb money laundering, terrorist financing and other illegal criminal activities that disrupt the overall financial system.