The Differences Between Traditional Know Your Customer (KYC) and Video-Based KYC Processes

In today's highly digitalized world, businesses are constantly seeking efficient and secure methods to verify customer identities. Two primary methods commonly used are the traditional Know Your Customer (KYC) process and the recently popularized Video-Based KYC.

What is KYC?

Know Your Customer (KYC) is a process employed by businesses to identify and verify the customers they deal with. This is essential for compliance with anti-money laundering (AML), counter-terrorist financing (CTF), and other regulatory requirements. KYC typically involves visiting a specific location, such as a bank or business office, where the customer submits required documents and undergoes face-to-face identification.

What is Video-Based KYC?

Video-Based KYC is a digital identity verification solution that facilitates the identity verification process through a live video call. This method is gaining traction due to its convenience, especially in the ongoing pandemic era. In this process, a KYC expert and the customer engage in a video call, during which documents and identity details are verified.

Key Differences Between Traditional KYC and Video-Based KYC

Verification Method: Traditional KYC involves in-person submission of documents and face-to-face interaction. Video KYC, on the other hand, uses a digital platform for document submission and verification through a video call. Convenience: Video KYC eliminates the need to physically travel to a location, making it more convenient and reducing logistical and time constraints. It is particularly advantageous in a remote or pandemic environment. Security: Although both methods are designed to be secure, Video KYC can be enhanced with additional layers of security provided by sophisticated AI models and biometric verification.

Benefits of Video KYC

Cost Efficiency: Video KYC reduces the need for hiring personnel to manage the manual verification process, thereby lowering operational costs. Reduced Error Rate: Automating the verification process with AI and biometrics helps minimize human errors, leading to increased accuracy. Real-Time Validation: The live video nature of Video KYC allows for real-time verification, making the process more efficient and responsive.

Conclusion

Both traditional KYC and video-based KYC serve the same purpose of verifying customer identities, but their methods and benefits differ significantly. Consumers increasingly favor digital solutions for their convenience and speed. As technology continues to evolve, the integration of video-based KYC is likely to become more prevalent, offering a seamless and secure identity verification experience.