eKYC Process Flow – How to Do KYC Online

The widespread adoption of digital technologies, such as mobile devices and biometric authentication, has made eKYC more feasible and accessible for businesses and customers alike. In addition, the increasing number of laws and regulations like the Anti-Money Laundering (AML) and Know Your Customer (KYC) laws are also augmenting the growth of the global eKYC market. 

In fact, Vantage Market Research has found that the global eKYC market will reach $1374 million by 2028. Interestingly, the global banking and financial institutions are at the forefront of this adoption. 

This information highlights the widespread adoption of eKYC in various companies. 

In this post, we explore what eKYC is, how to do it, and what other companies do with it. 

What is eKYC? 

Electronic know-your-customer (eKYC) refers to a range of solutions to electronically verify a customer’s information and identity. Basically, eKYC offers a digital solution to traditional know-your-customer (KYC) functions by providing a paperless approach and without the need for face-to-face interaction. 

With eKYC, the time to verify the identities of customers is significantly reduced. As such, it greatly reflects TRUDSTDOCK’s belief that eKYC is a gateway that leads to customer happiness! 

How to do it? 

The process of eKYC typically involves the following steps: 

1. The customer provides personal information such as their name, address, date of birth, and government-issued ID number, to the company.
2. The company verifies the customer’s identity using various methods such as document verification, biometric authentication, or facial recognition.
3. The company assesses the customer’s risk profile based on factors such as the customer’s information, location, and transaction history.
4. The company collects, stores, and uses the customer’s data in a secure and privacy-compliant manner. 
5. The company implements compliance programs. They also report suspicious activity to comply with legal and regulatory requirements. 
6. The customer is onboarded as a new customer and can now access the company’s products and services. 

Essentially, the process of eKYC involves collecting and verifying the customer’s personal information, conducting a risk assessment, managing customer data, and complying with legal and regulatory requirements. That said, the specific steps involved may vary based on the company, industry, and the location of customers. 

What do other companies do? 

There are various ways in which companies do basic eKYC: 

External Vendor

This refers to a company’s use of third-party vendors or providers to perform customer identity verification for businesses. These vendors typically offer a suite of eKYC solutions, including biometric authentication, document verification, and risk assessments. These are offered to help businesses comply with legal and regulatory requirements and reduce the risk of fraudulent activities.

In-House Team 

Some companies have an in-house team. This refers to a group of individuals within a company who are responsible for implementing and maintaining the company’s customer identity verification process. 

An in-house eKYC team is typically composed of individuals with expertise in areas such as customer service, IT, compliance, and security. The team works together to ensure that the company’s eKYC process is effective, efficient, and compliant with legal and regulatory requirements.

Hybrid (External Vendor + In-House Team) 

Some companies employ the use of both an external vendor and an in-house team.

With this setup, a company has two layers of protection. For example, the external vendor can be the first layer and can do the ID check and selfie verification. On the other hand, the in-house team can be the second layer and do AML checks.

Another hybrid setup could be that the external vendor can provide the technology and expertise necessary for the company to perform customer identity verification. Then, the in-house team can be responsible for overseeing and managing the eKYC process.

Example of eKYC features used by companies

eKYC has various features. That said, its main feature is the identity verification of customers through the submission of government-issued identification documents such as a passport, driver’s license, or national identity card. 

Likewise, there are also features like face recognition, signature verification, mobile verification, document verification, and a lot more! 

In addition to the above features of eKYC features, some customers request a feature called Proof of Address. This feature helps companies to confirm the residential address of a customer, which is a key element of customer identity verification. It also complies with AML and KYC regulations. 

Interestingly, proof of address can be implemented using a variety of technologies such as optical character recognition (OCR), manual verification, and electronic verification through government databases. Nevertheless, since technology is still limited on this front, the human eye is critical in this verification process. 

Final Thoughts 

eKYC is a very useful tool for verifying customer identity. Since it is being done electronically, things are more seamless and efficient. Interestingly, various companies have varying ways of how they implement their eKYC.

In conclusion, regardless of how companies do it, when eKYC is efficient and effective, it definitely becomes a gateway to the happiness of the customers. Likewise, it also leads to the success of the company.