Know Your Customer (KYC) is a legal requirement that is necessary to comply for real-time security and seamless working of any organization. Due to growing criminal activities and fraud attacks, legal authorities have designed various regulations that are necessary to comply with. Regular authorities make KYC a necessary compliance; its violation brings financial, legal, and reputational complications.
There are various steps to complete the KYC process; among them, liveness detection is highly important. It allows organizations to evaluate customers in real time and give access to their risk potential. The Know Your Customer (KYC) compliance process involves automated checking of user identity and a due diligence process for risk management.
Importance of the Liveness Detection Technology
Without liveness detection technology, companies may onboard fake entities remotely. After the pandemic of COVID 19, organizations continued remote business processes and onboard entities digitally. Criminals always remain active in the identification of loopholes to bypass for their illicit activities. Where the remote onboarding process brings various positive outcomes for organizational success, it also makes firms vulnerable to cyber attacks. Fraudsters employ deepfake detection technology and generate synthetic content, which they use in the remote onboarding process. Liveness detection technology uses authentication to identify spoofed content.
Face liveness detection technology works through the pre-trained algorithms of artificial intelligence. It includes deep learning models that verify facial data and enable them to be authenticated. The face liveness detection process involves the following processes:
Companies offer user online cameras to face for their image capture. These cameras capture images and process them through automated checks. These checks analyze facial nodes, including skin tone, depth of eyes, the distance between the nose and forehead, length of nose, and various other angles. Then, these facial nodes are converted into digital face prints, which become part of the electronic database and allow cross-matching with various records.
Role of 3D Liveness Detection in KYC
For the KYC process, facial liveness detection technology serves to cross-check digital face prints across watchlists and sanctions. It allows real-time security from criminal activities. Additionally, digital facial data allows PEP screening which helps to evaluate the risk potential of an individual. Hence,3D facial liveness detection in KYC works for enhanced security and seamless working of firms. Firms that do not comply with regulations become victims of financial losses and reputational damage.
Businesses are no longer using paperwork and manual identity verification systems. They are replacing paper records with cloud-based storage systems and automating the processing of various operations. Remote working operations enable organizations to have streamlined processes for better user experience and organisational credibility. Manual identity verification processes give way to criminal attacks and fraudsters. Online facial recognition services help to verify user ID through artificial intelligence checks and increase the conversion rate of their users by providing faster, more efficient service.
Why is KYC Compliance Necessary?
Due to the rise in the popularity of financial crimes, including money laundering and terrorist funding, KYC (Know Your Customer) services are necessary to employ. Moreover, companies that handle large sums of money regularly must guarantee adherence to strict KYC rules.
In addition to this, the KYC verification process consists of the following three essential steps;
Identification
The KYC processes enable businesses to confirm their users’ identities and limit the possibility of data breaches. In addition, the company’s administrative employees verify the user’s information against the record in the firm database. Thus, it makes it simpler for companies to check their clients’ identities and screen out those involved in illegal behavior. In this way, organizations can protect their business from criminals.
Customer Due Diligence (CDD)
Customer Due Diligence (CDD) assists businesses in conducting thorough user background checks before onboarding. Moreover, it analyses the user’s background by checking their name, address, and official identification document. Risk-based approaches to Anti-Money Laundering (AML) depend primarily on Customer Due Diligence (CDD) in the fight against cybercrimes.
Enhanced Due Diligence(EDD)
Enhanced Due Diligence (EDD) is a process that verifies the risk involved with clients to adhere to KYC and AML legislation. In case of unusual transactions, it thoroughly examines the client’s account details. As a result, the system collects and analyses users’ data appropriately to safeguard businesses against potential fraudsters.
Final Words
KYC is necessary for compliance for organizations, and its process is responsible for identity verification as well. Face liveness detection technology in KYC allows organizations to have both legal and financial security. IT is responsible for customer due diligence and managing and helping in user risk profiling and management. Additionally, the KYC compliance serves organizations with streamlined working processes and enhanced security from cyber attacks in remote onboarding processes.
