Traditional institutions which include financial institutions and insurance companies are in dire need of conducting due diligence processes. Know Your Customer (KYC) is the primary step towards customer verification. A backbone process to screen the onboarding traffic before giving space in a legitimate business. Even, regulatory authorities are active and focusing on the need for KYC as it helps to prevent the ruinous circumstances of money laundering and terrorist financing. KYC vets the businesses and entities to establish a healthy relationship with traditional institutions. It helps uncork corporate structures and shell companies that give birth to illicit funds flow.<\/p>\n
Today, the emergence of technological advancements such as Artificial Intelligence (AI) and Machine Learning (ML), have open ways to automate the processing that was done manually. Technologies have provided opportunities to streamline the KYC\/AML<\/a> processes, which were cluttered and complex before. Therefore, now instead of paper verification, businesses have taken in place innovative solutions that conduct digital identity verification through various means. These methods include; real-time document verification, biometric authentication and id card verification. Now in mere seconds, financial institutions can verify the Ultimate Beneficial Owners (UBO), nature of the business, third-parties, and customers.<\/p>\n
One of the major challenges is the number of sources where company data is found but is not consistent. Different information at different platforms is confusing for the beneficial owners to tackle. For this, businesses should have access to government business registers. They carry authentic records and information related to businesses which can be helpful to verify businesses through corporate KYC\/AML verification. All this information should be updated to verify against recent addition\/removal of business standards or specifications.<\/p>\n
Traditional banking verification mechanisms are time-consuming. Also, they are labor-intensive, require too much human power and time to undergo manual verification. The customers also have to wait in queues for their turn which becomes hefty. Time-consuming methods frustrate customers. Moreover, manual verification are prone to human error.<\/p>