Category: Technology

Welcome to our Technology category, a dedicated hub crafted to explore and delve into the latest technological trends reverberating through the fintech industry. As an innovative fintech entity, we stand firmly in our belief in the transformative power of technology. We see it as the catalyst reshaping the financial landscape, making it more efficient, secure, and customer-oriented.

The articles housed in this category dive into a multitude of tech-centric topics. We discuss everything from the role of artificial intelligence and machine learning in reshaping finance to the profound impact of blockchain on financial transactions. Our objective is to provide an exhaustive perspective of the tech landscape, spotlighting how technological advancements are revolutionizing the financial industry and opening up new avenues of opportunity.

At Signzy, we harness the power of cutting-edge technologies to craft our innovative fintech solutions. We remain steadfast in our commitment to stay at the forefront of technological advancements, continuously evolving our product offerings to deliver the best, most efficient solutions to our clients.

Whether you’re a fintech professional immersed in the sector, a technology enthusiast passionate about the latest developments, or simply an individual curious about how technology is driving transformation in finance, our Technology category offers a wealth of valuable insights.

We cordially invite you to join us on this fascinating journey as we explore the world of fintech technology, discussing its pivotal role in shaping the future of finance. Step into this exciting realm with us, as we unravel how technology is not just influencing, but defining the next generation of financial services.

How Video KYC Can Stop KYC-Led Financial Fraud In India

Posted on | by Signzian

In recent times, wallets and UPI have taken over the Indian digital payment ecosystem. Since its introduction in 2016 by the National Payments Corporation of India (NPCI), UPI has changed the payments paradigm.

But even as the reduction of friction in payments is driving the growth of new businesses, it is also orchestrating fraud. And with a likely influx into new-age payments platforms in the aftermath of the coronavirus outbreak, things may only get worse.

KYC is basically the collection and collation of customer data which is the most effective way of fraud mitigation. Newer and faster ways of getting KYC done are being implemented with the advent of AI and ML gradually taking over the legacy systems. So instead of having an agent visit the customer to manually check the details, more efficient ways like;

  • Aadhaar Offline KYC (Processing KYC without the use of biometrics)
  • Electronic KYC (Accessible to only customers with Aadhaar number)
  • Central KYC
  • Video KYC. This involves capturing all details and identification via a video.

Types Of KYC Related Frauds In India

 

Fake/Emergency Re-KYC

Usually, a re-KYC is required, to ensure an updated database of the customer in areas where they might have been a change. For instance, address or marital status or in case there was a minor mistake in the data.

This is the most common attempt of KYC fraud in India where the fraudster places a forged phone call pretending to be a bank/company representative. He/she asks you to provide your KYC information on an emergency basis otherwise the account will be “blocked”.

They will collect your information from social networking sites like Facebook, Linkedin, Twitter and so on. Once they have enough information, they will call you to talk to you about an ‘emergency’. Once they are confident that you are sold on the idea, they will ask you about your personal account details citing those ‘emergency’ reasons. Once you provide the details, he/she will further transfer the money from your account to some other account.

Vishing

Vishing (voice phishing) is an attempt where fraudsters try to seek personal information like Paytm Bank PIN, Paytm OTP, Card expiry date, CVV etc. via a phone call. The miscreant acts as an employee from Paytm, the government or a bank. He/she asks you for your KYC details. They will state various reasons like reward points, free cashback, reactivation of account, etc for this. These details are then used for accessing your account without your knowledge.

Smishing

Smishing (SMS phishing) is when a SMS/Email/WhatsApp message is used to lure you for calling back on a fraudulent phone number, visiting fraud websites or downloading malicious content via your phone. Fraudsters will send you SMS/Facebook Requests/WhatsApp messages to inform you that you’ve won some prize money, cashback offer or the like. They’ll ask you to share your Paytm account/Paytm Payments Bank account details. Unaware of what might happen, once you do that, they will initiate fraudulent transactions using your account details.

Identity Theft

Identity Theft occurs when someone uses your KYC information to obtain a Credit Card, Loan and other services in your name. Then those will be used for fraudulent transactions. They try to gain access to your details through any of the measures stated above. They contact you and try to collect KYC details pretending to be a Paytm employee!

Common KYC Frauds In India

According to CNBC, The Government of India has announced many beneficial schemes to help small businesses. Example: interest/EMI waive-off for MSME, microloan for unorganized vendors, a moratorium of EMI for various loans up to 6-months. But in most cases, common people might find it challenging to avail of these schemes. This is due to the amount of paperwork and the general complexities involved in dealing with banks. There is also a possibility of many bogus agents approaching small business owners. They provide fake offers of support in exchange for money. These fraudsters may use fake KYC documents to avail such benefits or could run a racket of fund diversion.

 

Some examples :

  • In a May report by Times of India, A 70-year-old retired government employee from Hyderabad lost Rs 4.2 lakh in a KYC (know your customer) fraud case. An unidentified man, posing as a Paytm employee, lured him into completing the fake KYC process and the customer provided all bank account details for fear of account termination.
  • In a Hindustan Times report, a senior citizen (67) from Borivali, Mumbai was duped by a cyber fraudster of Rs 3.18 lakh. The fraudster posed as an executive from a popular e-wallet service provider and under the pretext of updating his KYC (Know Your Customer) details he ricked him into sharing his bank details, including OTPs (one-time passwords). The accused used these details and fraudulently transferred money to another bank account. The complainant is a retired government employee and lives in a Borivali (West) housing complex, the police said,
  • In July, as per a report by Hindustan Times, a 38-year-old woman from Kothrud, Pune had been duped of Rs 14.49 lakh in a KYC (know your customer) fraud. According to the police, the complainant owns a business in the city.
  • The cybercrime wing of Maharashtra Police has received a number of complaints against eSIM swapping scams. In this, people have lost large sums of money in cases reported across the country. A July article by Indian Express mentions how the target user initially receives a call from a person posing as a customer care representative of the service provider, who, under various pretexts, deceives the user into forwarding an email sent to the user’s registered mail address with the service provider. In many cases, the user is contacted under the pretext of updating Know Your Customer (KYC) details.
  • Earlier this January, reports by Times Of India indicated that frauds through KYC were on the rise in Chandigarh with over 50 complaints in just 15 days. According to the Cyber Crime Investigating Cell, complainants have lost amounts ranging between Rs 10000 to Rs 45000.
  • In June of this year, a resident of Ballygunge, Kolkata was duped by an unknown fraudster who called the wife of the complainant on the pretext of KYC update. The caller convinced her to click on a link shared with her and enter OTPs multiple times after login. The complainant has lost Rs. 48000 in this process.

The Right Way To KYC For Banks & Financial Institutions

In order to clarify and strengthen KYC in the financial sector, the four minimum elements needed for an effective program are:

 

However, none of these processes require customer bank account information. The data rests with the organization itself while the customer account is created. Most organizations tend to offer to warn their customer channels on the same.

Video KYC — Fighting Financial Fraud

To prevent fraud and money laundering, the BFSI sector needs to comply with KYC norms. These were introduced by RBI and are based on the Government of India’s (GOI) PMLA Law of 2002. Aadhaar-based KYC verification had simplified the process. It also reduced the time taken by the BFSI sector to on-board customers drastically.

But, things changed with the Supreme Court order dated September 26, 2018, made the use of Aadhaar-based KYC by private players as unconstitutional. To overcome this hurdle, RBI brought Video KYC as an alternate tech-driven mode of KYC in its notification on January 9, 2020. It is based on the Aadhaar and Other Laws (Amendment) Bill, 2019, which was introduced by the government on June 24, 2019.

The process involves

  • Information about the user is received via API
  • User can opt for authentication using their smartphone/computer
  • Document details are captured on live video: screenshots of PAN Card, other identity documents, selfies etc.
  • Documents are scanned and data is automatically extracted and authenticated.
  • Facial recognition between the picture on document and person showing it is done
  • Liveliness and fraud prevention checks are conducted
  • The whole process is recorded on live video
  • The outcome of the verification process is assigned
  • The data retrieved during the procedure is automatically forwarded to the client via API

Conclusion

While most people will tell you that being cautious and aware is the best way to fight fraud, the modern age is no longer just a battle of wits but of technology. If fraudsters can use advanced software and hardware to hoodwink your judgment, it is only fair that technology should come to the rescue. Besides, with novel ideas like Video KYC, ven users with minimum knowledge about frauds and cyber threats can secure their accounts. After all, what might escape the human vision cannot defy computer vision.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

 

Democratizing AI

Democratizing AI: Live Face Detection

Posted on | by Signzian

Artificial Intelligence (AI) has been making waves in various industries, but its power is often concentrated in the hands of big corporations and research institutions. The concept of democratizing AI aims to make these powerful tools available and accessible to a broader audience. One such domain that stands to benefit is face detection technology, which has versatile applications in security, healthcare, retail, and even social interactions.

Since the dawn of A.I, facial recognition systems have been evolving rapidly to exceed our expectations at every turn. In a few years’ time you’ll be able to go through the airport basically just using your face. If you have bags to drop off, you’ll be able to use the self-service system and just have your face captured and matched. You’ll then go to security, the same thing happens just use your biometric. The big tech giants have proved this can be done at massive scale. What the world now needs is higher adoption through democratization of this technology, where even small organizations can use this advanced technology with a plug and play solution.

The answer to this is Deep Auth, Signzy’s inhouse facial recognition system. This allows large scale face authentication in real-time, using your everyday mobile device cameras in the real world.

Democratizing AI : Deep Auth, Facial Recognition System from Signzy

While one to one face match is now very popular (thanks to latest Apple Iphone X), it’s still not easy to authenticate people from larger datasets, that is identifying you from thousands of other images. What is even more challenging is doing this in real-time. And just to add some bit of realism, sending images and videos over mobile internet slows this down even further.

This system can detect and recognise faces at real time in any event, organization, office space without any special device. This makes Deep Auth an ideal candidate to use in real-world scenarios where it might be not possible to deploy large human workforce or spend millions of dollars to monitor people and events. Workplaces, Education Institutes, Bank branches even large residential buildings are all valid areas of use.

Digital journeys can benefit from face based authentication thus eliminating the friction of username, password and adding security of biometrics. There can also be hundreds of other use-cases which hopefully our customers will come up with, and help us improve our tech.

access

Deep Auth doing door access authorization.

Deep Auth is robust to appearance variations like sporting a beard, or wearing eyeglasses. This is made possible by ensuring that Deep Auth learns the facial features dynamically (Online training) .

access granted

Deep Auth working across different timelines

Technology behind Democratizing AI 

The technology behind face recognition is powered by a series of Convolution Neural Networks(CNN). Let’s divide the tech into two parts :

  • Face Detection
  • Face Recognition

Face Detection:

This part involves a 3 stage cascaded CNN network. This is to ensure the face is robustly detected. In the first stage we propose regions (Objectablility score) and their regression boxes . In the second stage, we take these proposed regression boxes as the input and then re-propose them to reduce the number of false positives. Non-maximal suppression is applied after each stage to further reduce the number of false positives.

cascaded cnn for face detection

3 stage cascaded CNN for face detection.

In the final stage we compute the facial landmarks with 5 point localization for both the eyes, nose and the edges of the mouth. This stage is essential to ensure that the face is aligned before we pass it to the face recognizer. The loss function is an ensemble of the center loss and IoU (Intersection Over Union) loss. We trained the network for 150k iterations on the WIDER Face dataset.

Face Recognition:

The extracted faces are then passed to a siamese network to where we use contrastive loss to converge the network. The siamese network is a 152 layer Resnet where the output is a 512-D vector depicting the encodings of the given face.

resnet

Resnet acts as the backbone for the siamese network.

We then use K- Nearest Neighbours(KNN) to classify each encodings to the nearest face encodings that was injected to KNN during the training phase. The 512-D vectorization used here compared to 128-D vectorization used in other face recognition systems helps in distinguishing fine details across each face. This provides high accuracy to the system even with a large number of non-discriminative faces. We are also working on extending the siamese network to extract 1024-D face encondings.

Benchmarks

Deep Auth poses impressive metrics on FDDB database. We use 2 images to train each of 1678 distinct faces and then evaluate the faces with the rest of test images. We then calculate the Precision and recall as 99.5629 and 91.2835 respectively, and with the F1 score of 95.2436.

Deep Auth’s Impressive scores!

We also showcase Deep Auth working in real-time, by face matching faces in a video.

https://youtu.be/mTgBw8lAHF0

Deep Auth in Action!

We tried something a little more cheeky and got our hands on a picture of our twin co-founders posing together, a rare sight indeed! And checked how good the Deep Auth really was. Was it able to distinguish between the identical twins?

And Voila! It worked

Deep Auth is accessed using the REST API interface making it suitable for online training and real-time recognition. Deep Auth is self servicing due to the fact it is robust to ageing and appearance, which makes it an ideal solution to deploy in remote areas.

Conclusion

Democratizing AI in the realm of live face detection offers immense potential to transform various industries. As the technology becomes more accessible, it is crucial to address the ethical implications to ensure its responsible use. By focusing on accessibility and ethics, we can harness the full potential of live face detection to create a more efficient and secure future.

Hopefully this blog was able to explain more about Deep Auth and the technology behind it. Ever since UIDAI made face recognition mandatory for Aadhaar authentication, face recognition will start to prevail every nook and corner of the nation for biometric authentication. Thus democratization of face authentication allows even small companies to access this technology within their organizations. This should hopefully allow more fair play and give everyone a chance to use advanced technology to improve their lives and businesses.

If you want to know more about our video kyc product. Read here

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs, easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.
You can reach out to our team at reachout@signzy.com

 

How do banks digitally verify your online identity?

Posted on | by Signzian

Data breaches and identity fraud continue to be a primary security concern for banks and fintechs . They have harmful financial ramifications for banks. They can also damage the reputation of institutions around the world. As technology advances so do the fraudsters’ methods of theft and deception. Banks need to provide online identity verification service to their users to fulfill regulatory obligations and manage risk.

First, banks have to ascertain that you are who you claim to be. Second, they have to determine that you aren’t a terrorist or involved in crimes like money laundering.

This first step in the traditional KYC process in banks is manually verifying the identity of a customer. This could prove to be the weakest link in a bank’s KYC process. Why? Because it is the most vulnerable to human error.

Fulfilling compliance obligations like Anti-Money Laundering (AML) checks & Combating the Financing of Terrorism (CFT) is not easy for all the entities. Common hurdles are:

  1. A lack of resources
  2. Negative effect on customer experience
  3. Maintaining strict standards of data security

Online identity verification is a suitable solution for all these problems. It fulfills regulatory requirements and provides a secure and seamless user experience. The method is efficient and can easily practice robust data security.

Transitioning to Online Identity Verification

Total identity fraud losses reached $16.9 billion (USD) in 2019 according to Javelin’s 2020 Identity Fraud Survey. It is an annual comprehensive analysis of identity fraud trends. To prevent the instances of such crimes, financial regulatory authorities are setup. Examples include the Financial Action Task Force (FATF). Also, local regulators have set up KYC and AML compliances that businesses are encouraged to adhere to. These regulations enable businesses to carry out proper due diligence for their customers. This can be easily done by properly analyzing customers’ documents to verify their identity. This also helps reduce the probability of fraud and scam. This KYC procedure was mostly done with in-person verification (IPV) by banks, financial institutions, and government offices. However, this was a time-consuming ordeal. Currently, the process is seamlessly done with the help of AI driven online identity verification systems.

Now you can conduct your business via your computer and cell phone. In the meantime, the bank or business representative can authenticate your identity. It can detect stolen personal identifiable information and forged synthetic ID documents. This can be done with technology like image forensics.

Capture, Extract, Verify, Screen, Result

How does it work?

  1. Identity documents are uploaded in real-time. The software detects the document and extracts relevant information from it using AI-based OCR extraction.
  2. The data is then analyzed to detect fraud. Next, the name is screened. This determines if the individual poses higher risk from a Money Laundering or Reputation Risk Perspective.
  3. Once the checks are done, a result is procured within minutes.

Document Verification

Detailed customer attributes can be verified through government issued identity cards and documents. They can be a permutation or combination of the following:

  • Personal Credentials (Name, Number, Age, Date of Birth, and more)
  • Nationality & Immigration Status (Residence Country, Place of Birth, Sponsor, Citizenship and more)
  • Documentation for Demographic Information (Tax Numbers, ID Number, Birth Certificate Number, Domiciles and more)
  • Employee Data & Employer Registration (Employer ID, Year Of Registration, Permit Type, Invoice Details and more)

The types in which these can be falsified are:

Illegitimate documents: These documents are completely fake. They consist of characteristics like missing holograms or other set standards. These form the essential parts of a legitimate version of that document.

False documents: This document is originally owned by another person. The fraudster tries to utilize it to authenticate himself.

Modified documents: This signifies an ingenious document which has been altered. This is where the fraudsters change the font and writing style to manipulate the system.

The online identity verification software can distinguish between all sorts of duplicate documents. Ex: fake, illegitimate, and counterfeit documents. The digital document verification is about 98.39% accurate. Much more precise than traditional manual document verification. It also saves time and resources, allowing customers to verify themselves in the comfort of their homes and offices within a few seconds.

Databases & negative lists

The next step after document verification is a background check for AML compliance. A name is screened against multiple sources and databases to reveal anything suspicious or risky. The sources can be:

  • Government Databases

A person is accurately identified by tallying information on their ID and publicly available government databases. A PAN card database is maintained by the central government. Aadhaar data is centrally based, with the central database resting with UIDAI. For entities, databases exist like the Registrar of Companies maintained by the Ministry Of Corporate Affairs. There are databases according to profession for Chartered Accountants, lawyers, government officials etc.

  • Negative Lists

Negative database APIs are used to see if the name appears on any black lists.

  • AML/ CFT

As per Reserve Bank of India guidelines, banks are required to ensure that before opening any new accounts, proposed customers do not appear in the United Nations’ List under Security Council Resolutions (1267) and the terrorist lists circulated by RBI. Other lists include Interpol Most Wanted, Central Bureau of Investigation, Lists issued under other Resolutions by the United Nations. The FATF blacklist or OECD blacklist is furnished by the by the FATF of the Organization for Economic Co-operation and Development (OECD) from 2000, and highlights the countries which OECD judges to be non-cooperative in the global initiative against money laundering and terrorist financing, dubbing them as “Non-Cooperative Countries or Territories” (NCCTs).

  • Sanction lists

Financial sanctions form a crucial aspect of the global fight against financial crime and are harnessed by governments across the globe to restrict or prohibit trade with foreign targets which are involved, or suspected of being involved, in illegal activities. Governments and financial authorities globally maintain a diverse range of targeted sanctions lists. An example of a sanctions list includes the United States’ Specially Designated Nationals and Blocked Persons (SDN) List.

Some other examples include:

UN Security Council Sanctions

The Security Council maintained by the United nations can authorize action to maintain or restore international peace and security under Chapter VII of the United Nations Charter. Sanctions measures, under Article 41, constitute a wide range of enforcement protocols that do not involve the use of armed force. Internationally, these sanctions also constitute AML/CFT regulations.

Her Majesty’s Treasury Sanctions List

The HM Treasury Sanctions List possesses the demographics (and other identifying information) of individuals/entities who are subject to UK regulations. Those sanctions comprise freezing of assets and market access restrictions — these are in tandem with UK AML/CFT policy. They are designed to curb criminal behavior from regimes around the world.

Bureau of Security & Industry

The Bureau of Industry and Security (BIS) is a security agency under the jurisdiction of the United States Department of Commerce. This organization specializes in issues involving national security and high-level technology. The primary objective for the bureau is helping stop the proliferation of weapons of mass destruction, as well as enhancing the growth of US exports.

Interpol Most Wanted List

The International Criminal Police Organization, commonly known as INTERPOL, is an international organization that facilitates worldwide police cooperation and crime control. Headquartered in Lyon, France, it has seven regional bureaus worldwide and a National Central Bureau in all 194 member states, making it the world’s largest police organization.INTERPOL maintains a most wanted database and this can contain millions of records with information on individuals such as names and fingerprints; stolen property such as passports and vehicles; and weapons and threats such as firearms.

Central Bureau Of Investigation

The Central Bureau of Investigation (CBI) is one of the primary investigating agencies of India. The organization falls under the jurisdiction of the Ministry of Personnel, Public Grievances and Pensions. The agency is renowned for investigating several economic offenses, special crimes, charges of corruption and other high-profile cases. Similar to Interpol, the CBI database also contains criminal information pertaining to AML/CFT data.

Signzy adheres to the above mentioned global sanction lists along with hundreds of other databases, making our products and solutions globally compliant.

  • PEP (politically exposed persons) lists

In financial regulation, a politically exposed person (PEP) denotes an individual who has been entrusted with a distinct public function. A PEP ideally is a higher risk for possible involvement in bribery and corruption by virtue of their position and the influence that they may possess.

  • Panama Papers

11.5m files from the database of the world’s fourth-biggest offshore law firm, Mossack Fonseca, were leaked in 2016. The International Consortium of Investigative Journalists (ICIJ) revealed with the documents how the rich and famous exploited secretive offshore tax regimes. With AI-based screening profiles from the data can be cleansed, and curated, revealing entities with negative information. A risk profile can then be created from the information.

Why is such a list important?

If a client possesses an offshore company, it’s quite possible that they are doing so to avoid taxes — or, even worse, so they can hide the flow of potentially illegal money. This could result in non-compliance and reputational risk. Financial institutions can decide if they want to accept the customer. If accepted, the client would be placed in the high-risk segment, with advanced due diligence.

Adverse Media & Negative news

This can include going through TBs of data from online sites, printed media sources to expose any negative news on the entity or individual.

Benefits of an Online Identity Verification system

  • Automated document forensics with accurate results
  • Real-time analysis with results within seconds
  • ID verification for one or more types of the connected device (mobile, tablet, kiosk, PC)
  • Facial recognition to match the photo on the ID with the person presenting the card
  • Faster enrollment using automatic form fill/pre-fill using ID data
  • Integration with back-office for audit optimization

AML at Signzy:

WorldWatch Risk Screening APIs: This API covers background checks and risk screening through AML/CFT, Politically Exposed People. It also conducts Negative Media checks for individuals as well as entities globally. This data is refreshed every 24 hours. This is because the search results are the most up-to-date information. The data is available from over 8000+ watch lists and sanctions sources globally. The APIs also include monitoring facilities to receive regular alerts.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

 

 

Automating Online KYC The Intelligent Way Using IPA

Posted on | by Signzian

KYC or Know Your Customer has been a crucial process in the banking sector for onboarding customers. However, traditional KYC involved several manual steps for the unique identification of the client. These steps were time-consuming, tedious and added to the expenses of the institutions. A report by X-Infotech states that banks across the world spend around $500 million yearly on KYC compliance. Financial Institutions (FIs) have also been additionally fined over $12 billion over violations of KYC and AML (Anti-Money Laundering) regulations since 2009. [1]

In a world where entities are ramping up online, digital authentication of one’s identity has become a necessity. With the pandemic taking the contactless process to a different level, institutions started to adapt themselves to a more efficient and cost-effective solution- Online KYC.

Online KYC has helped institutions verify the identities of their customers while at the same time providing them with a simple, secure, and compliant solution. It has provided customers with ease of moving through and completing the long process within minutes. In this blog, we discuss the challenges and benefits of the process.

Scrutinising Initial Challenges Of Digital Onboarding

Traditional onboarding involves several steps for the unique identification of the client. For a long time, in-person verification of the client’s identity was a must to ensure authenticity. Visiting the bank branch, face-to-face meetings and manual verification of documents was time taking. Along with this, it also left room for errors and a higher client dropout rate.

A lengthy onboarding process burdens the financial institutions. Online KYC helped make this process faster, secure and more efficient. However, there were many initial challenges that delayed the shift from offline to online. Some of these challenges included-

Lack of compatibility and compliance-
One of the major challenges of digital onboarding is the fact that users might have various devices with different internet bandwidth. In areas of weaker internet connection, onboarding can prove to be challenging. Different institutions can have their own set of regulations and specifications. This disparity and lack of standardization make the process confusing for customers with many accounts.

Inconsistency in recording data-
Outdated recorded data can prove to be a hurdle in the verification process. Performing accurate, efficient and verifications is central to maintaining a solid customer base and establishing a brand as a trusted service provider.

Privacy risks-
Verifying the information by a single FI and then using the same with others seems an efficient plan. But this also puts the information at higher cyber risk. Both global regulators and stakeholders expect that this will increase customer risk. Basic credentials and personal data on credit history involves many security risks. This might expose personal data to the very real threat of digital hacks.

Fraudulent-
Scamsters posing as officials have duped people of money. They usually do it by gaining remote access to the victim’s mobile phone screens through an app. They hack into the victim’s account by telling that their KYC needs validation.

 

Curbing Hurdles And Adapting To A New Way Of Banking

A report on RPA by Capgemini states that onboarding takes 24–30 days on an average. The same report also states that 9 out of 10 customers were not satisfied with their bank’s KYC processes. [3] As a result of which, they had to switch banks. IPA (Intelligent Process Automation) solutions can help FIs optimize their operations. These will help in reducing the costs and improve the accuracy of data verification. Emphasis on online KYC regulations ensures businesses with an efficient experience.

  • According to a study by CACI, by 2022 customer physical visits to their retail bank branches will drop by 36%. Mobile transactions will also see a rise of 121% in the same period as reported by x-infotech. The same report also estimates that 88% of all interactions will be mobile by 2022. [1]
  • Financial institutions are now moving towards remote and online verification processes.
  • Automated biometric verification and video conferencing tools provide a secure and efficient alternative to the traditional KYC method. A smooth, hassle-free client experience helps institutions grow their revenue.
  • A report by Acuity Market Intelligence estimates that 1.9 billion bank customers will adopt biometrics for financial services by 2020. [1]

Combining AI + RPA to Transform Onboarding using IPA

Financial Institutions have now started to address this anomaly and have started to adapt themselves to the ever-evolving technology. This helps them make the process efficient for both themselves and their clients.

  • IPA blends AI and RPA to create solutions that perform unstructured tasks efficiently. It shouldn’t be viewed as completely different from RPA (Robotic Process Automation) but rather an upgrade to it.
  • IPA is capable of handling complex processes to provide a seamlessly integrated framework. It uses image recognition and Optical Character Recognition (OCR) to understand, recognise and process the data according to the required task.
  • Introducing IPA (Intelligent Process Automation) can help cut down the probability of error and manual efforts of conducting repetitive steps.

Here is a list of benefits of IPA and how it is transforming the KYC process-

A smooth client onboarding solution

The faster process can allow financial institutions (FIs) to add value to their client services. The consistent and smooth customer experience can benefit them to transact or trade. eKYC reduces the manual efforts spent on collecting the client’s documents. Faster client onboarding proves to be an effective way of revenue generation.

Reduction in operational time and cost

An automated and standardised process reduces the inefficient steps in onboarding customers. Institutions can review and store the data. This reduces contact points and client drop-out rates. Capgemini reports that a centralised source could help the financial institutions save crucial back-office hours. It also helps and reduces costs by up to 50%.[3]

Increased operational accuracy

Manual entry of data can often lead to errors. This can amount to application rejection and loss of office hours and resources. eKYC registration online eliminates that risk. Accurate and secure storage of data helps combat the issue.

Better regulatory compliance and a holistic digital transformation

Financial institutions can harness better relationships with their clients. The details are up to date and transparent. This leads to better business partnerships and networks.

Quick ROI And Employee Satisfaction

Capgemini reports that the return on investment (ROI) on RPA implementations is as short as six to nine months [3]. Reduction in the manual processing of data helps in the reassignment of higher value tasks to the back-office staff. Allocation of new and improved objectives improves the work-life balance of employees.

How is Signzy providing a solution to these challenges?

Signzy’s AI-based solutions offer a simple, secure KYC collection process to financial institutions. We provide digital onboarding services to over 70+ financial institutions including 7 major banks in India. After implementing our solution, our clients have seen-

1. 75% reduction in operational costs,
2. 66% reduction in customer dropout
3. 3x increase in sales

Here are the overall benefits of our digital onboarding products-

Better compliance and compatibility-
Our services are compliant with the latest regulations. Through our smart AI-enabled onboarding solutions, we offer our clients to customize their workflow according to their needs. In addition, these solutions are compatible with most user devices. They have proven to be effective over various platforms, browsers and low-internet scenarios. This offers the users a seamless onboarding experience. Customers receive notifications about the required documents for the verification beforehand. Clients can schedule a time for verification through VideoKYC.

Improved BackOps, better efficiency-
Our Patented AI reduces 90% Backops effort. This makes the onboarding of investors effective. The details of the customer are extracted from the identification document uploaded by them using advanced extraction services. These details are then verified against forged data using Signzy’s proprietary technology.

Reduction of TAT-
The traditional method of KYC involves the submission of a lot of documents. Followed by processing and verification by several departments and their officers. This can be a time-consuming process. The automated process of VideoKYC saves a lot of time. Real-time verification of documents reduces the hassle of collecting photocopies.

Better background checks-
A unique set of APIs does comprehensive credit checks against potential frauds. Through advanced AI technology, we have been on the frontline of providing credible background checks. Some of which, for instance, include-

  • Document recognition- Real-time PAN verification extracts the data from the displayed ID proof by the customer. At the same time, it verifies the data against digital forgery, frauds or risks.
  • Video liveliness check- Video forensics detects pre-recorded videos and potential spoofs.
  • Image and video forgery- Face on the ID is matched against the face in the video and a match (or confidence) percentage is shown.

Best-in-class data protection and privacy-

The data shared on our platform is end-to-end encrypted. Our platform prevents leakage of data and malicious activities by any third party. Our video conferencing tool allows recording and the safe storage of calls for call audits. Any breach of privacy can be understood during auditing.

Conclusion

Today, a lot of financial institutions are heading the automation way. Yet, there are still some exploring the scope of it. Ever-changing regulations and policies in the KYC process appear as a hurdle. This creates challenges for both financial institutions and their clients. A standardised process will help FIs with better client onboarding solutions. While such problems may continue in the future, IPA solutions hold the potential to combat such issues. Digital Onboarding is simple and secure and at the same time provides a seamless customer experience.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

 

Video KYC

Video KYC: A game-changer for Non-Banking Sector

Posted on | by Signzian

It isn’t just the finance and banking sector that is going digital. Every aspect of our lives, every industry we can fathom is undergoing a digital transformation. From the comfort of one’s home, a car can be rented, a fiancé found, a house booked, and a loan taken. The common prerequisite for each of these pursuits is verifying that the person is exactly who they say they are. (A little more than) a click of a button can authenticate the user with the help of a remote id verification service. Irrespective of workflow, the Know-Your-Customer (KYC) process is shifting to the digital for each step, end-to-end.

The Need for online ID verification & Video KYC

With the COVID-19 pandemic forcing everyone into their homes, there is a growing need for an efficient, cost-cutting paperless system. A system where the person seeking the service never has to come in contact with the organization providing it.

The problem NBFCs are facing

Due to the privacy judgment by the Supreme Court, Non-Banking Financial Companies (NBFCs) are not mandated to use Aadhaar eKYC as a means to simplify onboarding. This creates a gap for a simple, secure, and compliant solution.

The Precedent: Video KYC in India

On 9 January 2020, the Reserve Bank of India (RBI) approved Aadhaar-based video authentication as an alternative to e-KYC. Now banks and other lending institutions regulated by the RBI can adopt a Video-based Customer Identification Process (V-CIP). It is a consent-based alternative method of id verification for customer onboarding.

The amendment to the KYC norms are a great way to push digital financial inclusion. The benefits of VideoKYC for banks are often discussed. But, what many fail to see is the future VideoKYC holds for non-bank institutions.

Non-banks, whether performing a financial function or not, can adopt VideoKYC as a solution to all their onboarding challenges. This blog will discuss the different industries that can adopt VideoKYC. It will also delve into the regulatory paths that exist, and those that can be potentially created to include NBFCs and non-financial institutions in the VideoKYC revolution.

The Potential Paths of KYC in India

Video KYC can fill in the gap of a simple, secure, and compliant solution for NBFCs. It is also useful to various non-financial institutions. It boils down providing a faster solution for all those sectors that erstwhile used electronic form filling.

RBI is the regulator of banking in India. Currently, different bodies regulate different finance related aspects carried out by non-banks. The future can only hold one of two options:

  1. The potential of non-bank financial institutions regulated by the RBI
  2. The current situation of non-banks not regulated by the RBI but other specific authorities

Either way, VideoKYC can be freely used by the following without any regulatory roadblocks:

Regulated non-bank institutions

The following 4 functions are financial in nature and the non-bank institutions performing them are currently regulated by different authorities.

  1. Asset Management Companies (Regulated by the Securities and Exchange Board of India): The VideoKYC onboarding customer journey allows full KYC, AML/CFT and authentication resulting in significant reduction of costs. Apart from individuals, it can also be beneficial to onboard non-individuals such as SMEs. The solution eliminates back and forth to reduce onboarding time.
  2. Insurance (Regulated by the Insurance Regulatory and Development Authority): Technologies such as a livliness check and digital fraud detection enable an enhanced user experience and reduces digital risk in the insurance arena.
  3. Lending: Using VideoKYC for the SME lending process can result in faster decision making and improved user experience. It can also be used for other forms of lending by NBFCs such as individual retail lending.
  4. Payments: KYC had been a primary barrier for mobile wallet companies who were relying on Aadhaar to onboard customers. They had to resort to cumbersome traditional processes. Video KYC can streamline the clunkiness of this experience.

Non Financial institutions

  1. Telecom industry: Authentication of a user is imperative to be issued a SIM card. Till now a physical visit to the service provider was mandatory to activate the SIM card. With the safe, contactless option of VideoKYC now in existence, the telecom industry should switch to this method of id verification.
  2. Rental/shared vehicle economy: Players like Ola Money which had a firm base of users using their wallet to pay for cab rides, had to perform the full KYC ritual to keep their accounts operational when eKYC was banned. With RBI accepting Video KYC as a potential alternative for digital KYC in 2020, Signzy’s Video KYC technology has the potential to provide the solution.
  3. Co-working spaces: Co-working spaces have been cropping up in the past few years. For the safety of all those working under one roof, KYC is done. Like any other long-drawn out process, VideoKYC can help reduce the time it takes to begin working from one’s new work place.
  4. Co-living and accomodation rentals: Driven mainly by urbanisation, the lack of affordable housing and technological innovation, co-living is gaining popularity. Documents may take time to be verified due to obstacles like blurred images or the possibility of forgery. A trustable solution must be used for the peace of mind of all tenants and VideoKYC is the best solution in the foreseeable future.
  5. Consumer goods rentals: Rental companies also follow the same approach where the owner never meets the buyer. In order to authenticate users, KYC collection and id verification is a must. But traditional forms of KYC collection can be cumbersome and require a lot of manpower, time and infrastructure. Just like every other paragraph in this blog, we cannot stress enough how much easier VideoKYC can make this.
  6. Educational platforms & exams: Although not used as widely as other sectors yet, with homeschooling now a forced practical reality for many students worldwide, VideoKYC can be used to onboard students to a new platform for learning. It can prevent cheating in competitive exams ensuring the person taking the exam isn’t someone else.
  7. Gaming: Cybersecurity and fraud are a huge concern for the gaming world. With money at stake, KYC is important to detect and shut down fake accounts and fraudsters.
  8. Dating and matrimonial sites: Trust is the foundation of any relationship or marriage. To get to that stage the user must trust the platform they are using to find their significant other. VideoKYC can ensure all suitors are exactly who they claim to be online.

But, why exactly are we calling Video KYC the future? You can find out through this blog.

Whether you are a bank or a non-bank, VideoKYC provides id verification solutions for any industry. Signzy’s VideoKYC solution has matured over dialects, browsers and low-internet scenarios. Use our new-age trust protocol to improve customer experience, cut down costs, and simplify onboarding. It will soon become a multi-industry standard. Adopt it to stay ahead of the curve.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

 

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