Video KYC Solution – Important Tool for AML Compliance in Finance Sector
Change is known as the only constant, and it manifests itself everywhere. The revolution in information communication technologies is also evidence of this. Digital technologies have rendered convenience and ease of carrying out everyday activities. Digitalizing the finance sector, in particular, has led to efficient regulation of customer accounts for AML compliance. Banks have significantly transitioned to digital processes, and adopting the video KYC solution has proved to be a revolutionizing step. The video KYC solution has increased the banks’ efficiency in the KYC process and proved effective in keeping checks on high-risk customer profiles.
KYC Video Verified Customer Onboarding
As hinted before, video KYC solution has allowed financial organizations, specifically banks, to monitor customers’ financial transactions. Banks conduct KYC video verified customer onboarding through face-to-face interaction with the customers via a video call. When a bank registers any client, it requires the customer’s personal information through a video call for an effective identity authentication process. Using the video KYC solution, a bank can mitigate the chances of financial crimes like money laundering and terror financing. Customer identity verification has become much more convenient for banks because of video KYC solution as they can strictly regulate individuals with a high risk of being involved in illegitimate financial activities.
KYC through Video Call – an Ultimate AML Solution for Banks
Although the video KYC solution was already in use during the pre-covid 19 times, it gained more significance with the onset of the global pandemic. Like online education and Zoom meetings from home, banks shifted to a new KYC verification procedure, i.e., using video calls. Moreover, its primary objective was to enhance the banks’ regulatory protocols for anti-money laundering compliance. Since then, KYC through video call has gained paramount significance in financial institutions like banks and cryptocurrency exchanges. Also, it has enabled them to secure the customer database from potential threats from fraudsters and money launderers.
The Potential of Video KYC Solution in Present Times
The importance of video KYC solution in customer onboarding can be gauged by the astounding facts and figures provided by a Facts and Factors report. As per the report, the global video KYC market stood at USD 154 million in 2019, but due to its growing demand, it is expected to reach USD 500 million by 2026. Moreover, according to the projections cited by a report, the global video KYC solution market is forecasted to rise considerably between 2023 and 2028. It is already growing at a steady pace. In 2022, the global market size accounted for 212.68 million, and it is anticipated to rise rapidly during these five years to about USD 499.57 million by 2028. These figures showcase the immense potential of video KYC solution for the finance sector.
Growing Demand for Video KYC Vendors in Finance Sector
KYC is crucial in combating threats of money laundering, terrorism financing, and other financial crimes. Hence, it is vital for financial institutions, specifically banks, to ensure transparency in monetary transactions flowing through their institutions. For this purpose, they seek video KYC solution from relevant providers. The video KYC vendors or service providers are third-party companies collaborating with banks and other financial organizations. They provide sufficient training to the employees in video KYC customer onboarding. There is a surge in this industry as various companies are rushing to offer their video KYC solutions. Thus, banks and other financial organizations must choose a video KYC solution provider with sufficient mechanisms to provide its service and AML compliance.
How do KYC Video Vendors work?
The trustworthiness of a vendor is displayed through its track record of efficient performance in confirming customers’ identities and combating potential threats. A reputed video KYC vendor, with regards to abiding by the regulations, is the key to ensuring a safe digital onboarding for any financial institution. Video KYC vendors create an easy way for the banks to verify their customers’ identity and location by interacting face-to-face with them through a video call. The vendors provide customer-friendly features on the bank’s website through which the users can register themselves. After completing the registration process, the bank conducts a video call through its representative, trained effectively by the video KYC vendor. The representative checks the customer’s liveness through features like geo-tagging. Transparent and efficient customer onboarding in financial organizations is solely possible because of the tools and features provided by these vendors.
Video KYC: Highly Beneficial against Financial Crimes
Video KYC solution has proved to be a ground-breaking tool in KYC AML compliance procedures. Its precise, accurate, and practical nature has enabled financial organizations to work more efficiently. Moreover, it aids banks in customer onboarding by verifying, monitoring, and regulating customer data. Therefore, it is immensely beneficial in preventing all forms of financial crimes, such as money laundering and terror financing.
