The importance of online identity verification cannot be overstated in the contemporary digital world, as it has become a crucial element for businesses and organizations. Before digitizations, KYC services were done manually. It mainly concerned financial institutes i.e., banking. Some businesses still perform customer verification in the traditional way, but most of them have transitioned to digital customer verification services.
Video verification is much safer than classic verification; it allows for easier detection of potential fraud. Customers are able to complete all tasks remotely from their homes or places of employment, eliminating the need for them to physically visit the organization. Video verification provides a safe way for businesses to verify their customer remotely using robust digital tools.
This post takes a deeper look at the concept of video verification online and how digital identity verification services are using this technology to protect businesses and organizations.
What is Video Verification?
Video verification is a process that involves recording a video of yourself answering a set of questions to verify your identity. Video verification allows you to save valuable time, as the whole process only takes a few minutes and can yield almost instant results. This process is usually done using digital identity verification services that use advanced algorithms and machine learning to ensure that the video is genuine and that the person in the video is who they say they are. Video verification has become an important aspect of online identity verification, especially in industries where security and trust are paramount, such as finance, healthcare, and e-commerce.
How Does Video Verification Work?
Businesses use video verification in a variety of ways in their KYC procedures. The two most common methods include:
Method 1: KYC Video Interview
The first method is a KYC (Know Your Customer) verification video interview. A video verification interview is a face-to-face interview between a customer and a KYC agent via video call. Video interviews have the potential to reduce KYC risk effectively. However, because these interviews are conducted by live agents, a company must hire a team large enough to handle the volume and demand in order to successfully incorporate them into the KYC process. Similarly, video chat may result in significant, unanticipated friction for users. A KYC programme that uses video interviews can be hard to scale, especially for businesses with smaller teams, for these reasons.
Method 2: Automatic Video Recording
There is another method that many businesses use to automatically record video and audio during the registration process. Some businesses may choose to video the entire session, while other businesses may choose to record video only at key moments in the registration process, such as uploading documents or verifying selfies. During the manual, this analysis is carried out either algorithmically or by a real agent.
Who Needs Online Video Verification?
The types of entities that are required to perform video KYC are as follows:
- Credit institutions
- Financial service providers
- Electronic money institution
- Electronic money agents
- Investment management companies
- Cryptocurrency Service Providers
How Do Businesses Benefit From Online Video ID Verification?
The process of video KYC digital verification may be a complex process, but it still provides businesses with a remote and secure way to connect with users. KYC video verification solutions can maintain high conversion rates, protect against fraud, and ensure compliance with regulatory requirements
KYC/AML Compliance
KYC/AML compliance is crucial for regulated industries like banking, as they must comply with local anti-money laundering laws to prevent money laundering, terrorist financing, and regulatory sanctions in a cost-effective manner. By adhering to these laws, banks can safeguard their customers, prevent financial crimes, and maintain the trust of regulatory bodies.
Fraud Protection
Fraud is a persistent challenge for online businesses in a range of industries, including e-commerce, and car-sharing. Often with malicious intent, fraudsters gain unauthorized access to these services by using fake documents and stolen identities. As a result, an increasing number of businesses are turning to video identification solutions for greater assurance that only legitimate and authorized customers are able to use their services.
Conversion Rate
Conversion rate is a critical aspect for businesses, and losing customers during the onboarding process can be a major concern. However, KYC video verification provides a more user-friendly approach. This allows businesses to strategically select users they want to verify through video, based on their risk profile and transaction volume, minimizing the risk of losing potential customers.
Conclusion
To summarize, video verification is a useful tool for businesses to accurately detect and prevent various forms of fraudulent activity during the registration process. Regulations regarding video KYC verification may differ depending on the country, and there are some regions where video KYC is mandated or officially allowed. Businesses can choose which users to have video verified based on their risk profile and transaction volume, allowing them to maximize the number of passes or comply with legal requirements.
The post Securing the Future: The Role of Digital Video Verification in Today’s World appeared first on Datafloq.
