KYC automation in the BFSI sector is crucial to fulfilling customer onboarding and due diligence measures. The BFSI (banking, financial services, and insurance) sector is most prone to money laundering and identity fraud.
BFSI ID verification automation is important to release banks of regulatory burden and avoid heavy non-compliance fines they often have to pay due to unmanageable workload and subsequent negligence in KYC risk mitigation procedures.
What are the main KYC Verification Steps in BFSI ID Verification Automation?
KYC automation in the BFSI sector is the need of the hour. Recently, the industry has witnessed an increasing number of financial crimes in the banking and insurance sector linked to converting illicitly gained money into legally acceptable forms. Let’s talk about the main BFSI Robotic Process Automation (RPA) processes that could make KYC verification steps in the BFSI sector time and cost-effective to a great extent.
1. BFSI Robotic Process Automation (RPA)
Manual KYC verification methods take a huge toll on operational costs. The BFSI sector needs to apply automated KYC verification methods, for instance, Optical Character Recognition (OCR) based data pulling and verifying those data on Artificial Intelligence (AI) and Machine Learning (ML) algorithms.
This robotics involves verifying customer documents to detect fraud in real time. The OCR technology can read the information on the IDs; the information is then verified against a set of databases using AI and ML-based anti-fraud filters.
2. Video KYC Verification
Real-time identity verification with video-based KYC as part of customer due diligence is a proven automated process that has substantially aided the banking, financial, and insurance sectors in recent times.
Video-based KYC is an important BFSI Robotic Process Automation (RPA) step that has helped organizations expedite customer onboarding and lending procedures. The process involves capturing the customer IDs with live customer footage and includes a list of questionnaires to validate that the customer is who they claim to be.
Liveness detection is one of the most crucial BFSI ID verification automation that has significantly reduced the due diligence turnaround by 60-70%. As a result, the customer-onboarding abandonment ratio has also significantly lowered as its usage becomes more prevalent.
Merging BFSI ID Verification Automation with Great Customer Experience
Low code automation to connect databases with technology is helping the banking and finance industry to create a user-friendly onboarding process for their customers. Today, every organization is seeking a competitive advantage over its equals. Financial organizations continually improve the customer experience while adhering to fraud mitigation and regulatory standards.
BFSI ID verification automation has helped banks to structure their various operations. Orchestrated data linked to various systems are processed and placed together in one securely accessible location. This system has accelerated commercial lending and onboarding processes as the bank employees get access to a 360° customer KYC life-cycle view and respond in real-time with minimal friction.
Fraud Risk Mitigation with KYC Automation in BFSI Sector
Financial crimes in the BFSI sector have come of age as sophisticated banking cons are untraceable, and today only 20-25% of the customers can recover the losses. Many fraud case studies have shown that the siloed data storage structure – in banks and conventional financial institutions – has made fraud risk mitigation cumbersome.
Even today, most financial organizations do not have a platform for a holistic view of customer data and life cycles. Finding suspicious behavior patterns for suspicious activity reporting (SAR) is challenging for the risk team. Effective deployment of a BFSI automation tool can stimulate SAR filings by tracking customer behavior in real-time and connecting the patterns with the data points to produce customer case management.
Many advanced automation tools auto-populate the SAR filings based on customer risk patterns and auto-generate the submission forms for timely inspections.
Accelerate your digital transformation journey with IDMerit customer onboarding and BFSI Robotic Process Automation (RPA) solutions. Learn more about automated KYC verification steps and book a demo to see how IDMerit flagship products IDMkyb and IDMkyc help businesses with KYC automation in the BFSI sector across various global industries.