Top 3 Technologies Used In The KYC Process



Know Your Customer compliance is vital for every business as it helps to monitor and evaluate customer risk. Every business that is KYC integrated will be able to monitor transactions and prevent money laundering practices. In this article, we will discuss the top technologies used in the Know Your Customer procedure, including social biometrics, blockchain, and AI.

1. Social Biometrics

Social biometrics is used by financial institutions that require big data technologies, Know Your Customer procedures, and modern transaction monitoring methods. With this tech, the footprint of an individual collected through Instagram, Google, Twitter, and other social media platforms can be valuable. Through them, businesses can obtain important data about their customers that cannot be found elsewhere.

Organizations that use biometrics can capture the data from both the under-financed and those who don’t use banks. Although such individuals usually have few credit ratings, they often use social media. That aside, this tech carries internet data that continuously fluctuate. As a result, businesses that use social biometrics have a more reliable way of evaluating identity theft, risk, and scam.

2. Blockchain

Blockchain enables financial institutions to stay up to date with fluctuating regulations. Although this tech is mainly used for cryptocurrencies, it allows these institutions to verify customer data for KYC compliance swiftly and provide their customers with better services. Blockchain technology is based on a dispersed and dated ledger with blocks included for each transaction. Consequently, blockchain data is never loaded in a central location and is impenetrable to scammers and hackers.

Businesses that use blockchain can perform client verification easily with information such as the source of income and business capacity, and constantly monitor operations. Financial institutions must utilize the Know Your Customer procedure and transfer the due diligence data to the central registry. The central registry keeps computerized information attached to a special identification number for every client.

With the use of the reference number, organizations can offer new services to clients with whom they have banking relationships. This is possible as they can access the saved data to carry out due diligence.

3. AI

Artificial Intelligence is the foundation of several new Anti-Money Laundering and Know Your Customer processes. It includes various categories such as Natural Language Processing, Fuzzy Logic, Machine Learning, and Neural Networks.

These technologies enable programs to think and train them to predict results accurately. A system that is integrated with Artificial Intelligence can offer an effective questionnaire that can be adjusted in accordance with clients’ responses. The Artificial Intelligence’s IPA effectiveness would assist in reducing the FIs’ Know Your Customer portfolio update significantly.

Final Thoughts

The KYC procedure is crucial for every organization as it assists entrepreneurs in observing and assessing customer risk. Every Know Your Customer compliance integrated organization can inspect transactions and avert money laundering operations. Study the top technologies used in Know Your Customer compliance and integrate them into your businesses to minimize the risk of money laund





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