Online KYC To Prevent Data Breach- 4 Things To Understand Its Relevance In Cybersecurity

According to IBM, the typical cyberattack costs $3.86 million, and it takes 280 days to discover and contain. Additionally, the market for basic cybersecurity worldwide will be worth $403 billion by 2027, growing at a 12.5% compound yearly growth rate. For the longest time, KYC in all forms (including Online KYC) and basic cybersecurity have operated as independent fields. Protecting businesses against external threats like antivirus software, firewalls, etc., has been referred to as cybersecurity. However, the KYC process has been incorporated into the company’s client onboarding procedure to guarantee that the new user is qualified after passing the security tests.

Another effect of the coronavirus outbreak is the fusion of Online KYC and basic cybersecurity. Online businesses proliferated when lockdowns confined individuals inside of their homes. But regrettably, it also puts daily life subject to cyber attacks. Since the pandemic breakout, 71% of IT and security experts worldwide have noticed increased security risks and attacks.

Here are 4 things to understand about the use of Online KYC in basic cybersecurity.

1. What Exactly Is The KYC Process?

In the global economy, financial institutions are more exposed to criminal activity than ever before. Know Your Customer (KYC) guidelines have been developed to safeguard financial institutions from fraud, corruption, money laundering, and financing of terrorism.

KYC is used in the following:

  • Determining the identity of the customer
  • Recognizing the kind of activities that customers engage in
  • Make sure the money is coming from a reliable source.
  • Evaluating the danger of money laundering

Business owners have traditionally valued KYC Processing. It used to be required for regulated companies, but since technology has evolved and the bulk of services are now provided online, it has become increasingly important for every company. It serves as the customer’s first point of identification because it includes biometric data like fingerprint, IRIS, and face. They make sure to verify uniqueness before offering any services as a result.

2. KYC and Basic Cybersecurity?

Businesses reported fraud-based losses resulting from account opening and account takeover in 57% of cases. It indicates that cyber dangers are gaining access to KYC procedures and that further security measures are necessary. Businesses currently provide safe Online KYC solutions for increased cybersecurity.

Facial liveness solutions that employ artificial intelligence and machine learning technology to provide a failsafe verification process are assisting in preventing fraud. Today, the same can be done with a selfie or fast video chat, contrary to earlier perceptions that it was impossible to do facial liveness checks without physical verification. As a result, social media networks can use such technologies to stop cybersecurity frauds.

3. Online KYC’s Role In Ensuring Seamless Identity Checks

Companies and enterprises can choose to integrate ML algorithms and Online KYC APIs easily. They are simple to integrate into any organization’s primary business applications. It makes it possible for verified consumers to be onboarded and for the customer experience to be smooth. In addition, document validation uses AI and ML technology.

Technologies like document verification and optical character recognition (OCR) extraction are also emerging. They provide the businesses the authority to collect altered photographs. Similar to how OCR software identifies, extracts, and assembles letters into words and phrases from an image. Additionally, it is advantageous against data breaches.

4. What Can Governments Do?

Governments can actively assist businesses by assisting with consumer identity checks. Unique IDs, like the Aadhaar cards used in India, are one such method. Governments’ readiness to give necessary APIs to the private sector, where possible, can ensure that KYC processing is completed in addition to setting up Unique IDs. Additionally, it will help to eradicate cybersecurity fraud and data breaches.

Conclusion

Nowadays, Online KYC can be completed quickly and affordably thanks to contemporary technology, which also improves cybersecurity. At the moment, Online KYC and basic cybersecurity coexist in the same world. Companies are now asking pertinent questions about cybersecurity due to the post-pandemic shift in the security paradigm. They want to integrate seamless and secure operations to maintain their customers, data, and reputation. Never let your guard down as a corporation, and keep an eye out for technological solutions that guarantee cybersecurity during the Online KYC processes.

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.

 

India’s Project $5 Trillion- How The Fintech Industry Will Fast Track The Nation’s Economy Goal For 2026

In 2019 Prime Minister Narendra Modi envisioned making India a titan with a USD 5 trillion economy and a global powerhouse by 2024-25. With this, India would be the third largest economy in the world with every financial company powering the change.

Although almost all industries have contributed to India’s growth in the past decade, financial technology significantly impacts achieving the goal. A major factor for this is the relentless adoption of automation in the sector.

India’s digital journey has been a unique one. It probably started with the Digital India campaign in 2015, which aimed to promote greater financial inclusion – India’s population has grown to over 1.4 billion, and significant steps have been taken toward digitization.

The Government’s Role In The Fintech Industry

The government-initiated campaign had three main components: 

  • Digital Infrastructure Creation
  • Digital Delivery of Services
  • Digital Literacy

To a large degree, the movement empowered the people and continues to impact the country’s growth positively. 

Today, we have the following:

  • Aadhaar ID system
  • Unified Payments Interface (UPI)
  • Enhanced internet connectivity
  • A nation with a large portion of digital natives
  • Some of the fastest-growing and most successful fintech industry startups

With the digital revolution that has been happening, people are getting greater and easier access to financial services. This fundamentally changes consumers’ financial behavior from a preference for cash to e-wallets and UPI. UPI is one of the significant driving factors in India that has gotten consumers to use payment services on their mobile phones. Changing payment habits are driving changes in banking and financial services in India.

Financial Companies Into E-Commerce

As e-commerce took off in India, with companies like Amazon and other e-commerce players entering the market, consumers transitioned to digital payments like Google Pay, Paytm, QR payments, etc.

They also became habituated to using digital authentication methods from:

Some of these were introduced out of necessity to cater to consumers in cities with varying internet access and mobile penetration levels.

As account opening modes transform from in-person transactions to in-person remote events, the question, ‘is the client legitimate?’ becomes difficult to answer. Moreover, with the growth of digital businesses comes the growth of fraud and risk. So it’s critical for banks, financial services providers, and non-financial banking institutions (NBFCs) to ensure a secure verification process from the point of onboarding.

Interestingly, over the last few years, video/online KYC has revolutionalized the KYC process between banks and consumers, whether it happens in person or remotely. In addition, consumers have also become habituated to smartphone verification as it becomes part of an account opening process or ongoing banking transactions.

Fintech For Five Trillion- Together, We Shall

The payments revolution also drives other shifts within the ecosystem, particularly in the lending industry, as banking and financial services move away from conventional operating methods. We are seeing more “openness” from the overall digitization of products, services, and offerings to API unification across some of the larger banks in India. Banks also collaborate with fintech industry startups to bring some innovative products to life.

These collaborative projects, along with new initiatives by the government, including the open banking drive, have propelled India to the forefront. 

At the organization level, high-growth companies need working capital to ensure their innovative ideas and services can launch successfully. These companies may be smaller compared to typical multinational corporations. If they are being evaluated using traditional financial instruments used by banks and NBFCs, they would be less likely to get approval for the loans required because several data points wouldn’t be available. As part of the government’s vision to bring the Indian population into the digital age, IndiaStack and other vital frameworks help make some of these data points available.

On the consumer level, with the amount of transactional data available as digital activity increases, data privacy and security will be of concern. For example, how risk profiles are being built from payment transaction data, what is in payment transaction data, how fraud is being managed, etc. – these topics that we often hear from consumers, banks, and the fintech industry.

Fintechs Are Improving 

Although Fintech has seen considerable developments in the past few years, creating a new-age financial framework in a country with diverse demographic and linguistic diversity can be daunting.

All stakeholders, from banks, fintech companies, financial services firms, government regulatory institutions, and value-added services, must address the current challenges and ensure inclusive growth through valuable innovative services and products.

Some more improved and relevant fintech innovations include:

  • Fraud-proof e-Stamp with unique identification number
  • E-Way bill – a goods movement compliance mechanism
  • GeM- Government e-Marketplace
  • TReDS- Trade Receivables Discounting System that facilitates MSMEs to receive payments from any corporates through e-banking rightly
  • GSTN for any checking claim on input tax credit
  • Bharat Bill Payment System- an integrated bill payment system where customers can through a network of registered agents through multiple payment modes.

It is necessary to supplement these initiatives with strong policy measures that enable their adoption at scale rather than just being siloed and fragmented success stories.

New-To-Credit (NTC) Customers And Risk Management

India’s current credit gap is nearly INR 16.6 lakh crore. Most of these are small-ticket loans sought by New To Credit(NTC) customers or individuals. They are usually unserved or underserved by conventional financial companies. Financial technology startups are striving to bridge this credit gap with flexible loans. They combine low-cost digital payment modes with innovative delivery models and data science to assess creditors’ creditworthiness and avoid payment defaults.

Many verification tech providers using traditional data points effectively exclude most of India’s population because many of us are new to credit. An excellent financial technology service provider should ensure accessibility with documents such as passports, driver’s licenses, residence permits, and of course, Aadhaar. They need to provide the right resources

Alternative credit scoring is also part of our solution for Indian companies. Credit scoring impacts how businesses evaluate their prospects and customers, from insurance to Ola or Uber rides. Consumers without specific financial data points aren’t necessarily unlendable. De-risking through a broad exclusion of NTC customers in India means losing out on a significant potential consumer base. Multi-platform score, joint modeling, and email detection are part of what we can offer as a more comprehensive alternative scoring solution. I think it’s also noteworthy that these data and insights don’t just help verify customers; they also help businesses build a better understanding of their customers and make better decisions for a longer-term business impact.

Why And How Signzy Enables Financial Companies With The Goal

At Signzy, we consider all the above concerns while crafting solutions. To improve digital payment penetration, we create resources that require very little expertise to integrate and, more importantly- use.

NTC customers need special attention, which we ensure with good ID Optical Character Recognition (OCR) for documents and Face Recognition tech for individuals. It will help make sure businesses can recognize high-risk and unsuitable customers right at the beginning and in an automated fashion.

All this is done using No-Code AI-driven resources that can be integrated seamlessly. We also have patented tech and no code workflow builders that shape the new edge tech required in the market.

So if you seek to improve your venture’s processes, Signzy certainly can help you. Check out our website.

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.

 

Exploratory Data Analytics To Fight Financial Crime- How To Effectively Prevent Fraud In The Fintech Industry

Combating global financial criminal activity, from money laundering and market misconduct to sanctions, terrorist financing, bribery, and corruption, costs an estimated US$1.3 trillion annually, according to a 2018 Refinitiv Survey. Moreover, with global regulators imposing nearly US$26 billion in fines in the last decade for non-compliance with AML(Anti-Money Laundering), Online KYC(Know Your Customer), and Sanctions regulations, there is a material need for change. Exploratory data analytics can bring this about

Governments and regulators put financial companies on the front line to fight against financial crime with increasingly rigorous compliance requirements. However, trade institutions are finding it challenging to meet these expectations due to legacy technologies and manual processes that no longer keep up with the vast volumes of information produced and the complexity of the global banking ecosystem.

Banks innovating and adopting new technologies and techniques to address regulatory compliance demands will be industry leaders in the years to come. 

Time To Evolve The Fintech Industry With Exploratory Data Analytics

Conventionally financial companies have relied heavily on manual, human intervention in the regulatory reporting process. This remains the common practice today, particularly in the case management workflow. For example, several case investigators review details and write disposition narratives physically before suspicious activities and other compliance issues are reported to them.

However, with the flow of information in and out of banking systems, humans can’t keep pace with demand. As a result, risk alert backlogs are growing faster than operations teams can handle, more often than not. We can use advanced and exploratory data analytics techniques such as AI, machine learning, natural language processing, and cognitive automation to accelerate or automate a significant portion of the labor-intensive work. This reduces operational costs and leaves people free to focus on preventative interventions.

As well as decreasing operational workloads in case management, compliance teams also leverage advanced analytics in many preventative financial crime use cases, including enriching the KYC process, enhancing sanctions screening performance, and monitoring transactional activity, helping to identify risks and opportunities proactively.

Machine learning models accelerate the closure of a risk alert backlog and have a higher degree of accuracy. 

Innovation- Solution to Legacy Issues Using Exploratory Data Analysis

Following are the three examples of opportunities for financial companies and banks to use innovative and exploratory data analytics methods and technologies to improve regulatory compliance, enhance customer experience and lower the cost of operational risk management.

Transaction Monitoring (TM)

In Anti-Money Laundering, ML models enrich transaction monitoring alerts and boost SMR(Suspicious Matter Report) conversion rates – and predict AML scenarios before they occur. In addition, enrichment adds potentially essential details about the customers, beneficiaries, or accounts associated with the respective alert, such as:

  • Using previous cases, SMRs or TTR(Transaction Threshold Reports)
  • Existing scoring processes that assess the potential risk of a transaction, customers, series of transactions, or accounts
  • External information such as subpoenas, law enforcement inquiries, or negative news

Machine learning models detect “true positive” results with improved accuracy than traditional methods and even predict significant events before they occur.

Online KYC– Know Your Customer

Organizations must collect, manage, verify, and validate customer data for KYC checks and compliance to implement the required due diligence and permit apt customer risk assessments or investigations. However, building a comprehensive ‘single view of the customer’ spanning various source systems and multiple digital interactions has been a challenge for financial companies.

KYC checks and verification have traditionally been manual and inefficient processes, often combined with critical data gaps, errors, and quality issues. However, it’s possible to achieve a better perspective of the customer, enhance the data used to implement due diligence, and provide a contextual basis for determining customer risk and detecting suspicious activity by augmenting human activity with machine learning techniques. So now we can use Online KYC.

Analytics also enables customer segmentation and productive profiling for various business purposes, including compliance and marketing. For example, compliance teams could use customer profiles for risk assessments or investigations. Likewise, enterprises or marketing teams could use this data to create personalized banking offers based on customer preferences.

Effective Sanctions Screening

The performance of screening engines is under pressure due to rapidly altering and increasing regulatory demand. Unfortunately, this is accompanied by the fact that the risk detection capacity of existing systems is unable to keep up. As a result, a typical symptom of inefficient screening is an ever-growing backlog of screening alerts and unsustainable levels of false positives, directly impacting operational costs.

At the core of effective screening, the solution is an uplift of the completeness and the screening engine ingesting the data’s accuracy. Therefore, calibrating the matching and filtering performance of this effective screening engine needs the data to be of high quality, complete, and ultimately resulting in a boost in true positives detection rates and operational efficiency.

In addition to ensuring the screening, the engine is fully operating at peak performance; emerging AI and other analytical assistive options can also be used to address operational efficiency issues related to a particular case investigation.

Machine learning techniques can be combined with predictive calculations based on historical investigator decisions to substantially reduce the number of alerts to be safely dispositioned. In addition, the effort and cost involved are reduced by building processes that result in complete and accurate data and properly optimizing the engine to avoid false positives.

An intelligence-led and data-driven Fight In The Fintech Industry

Financial companies are being challenged internally and externally to keep up with the onerous demands of mitigating financial crime risks. Organizations are finding innovative ways to address issues surrounding SMR conversion rates, KYC due diligence, and screening alert management.

Banks have an increased appetite to go beyond simply flagging suspicious and illegal activities for compliance purposes. The aim is to leverage data and effective technology to cost-effectively identify potential criminal behavior and prevent illegal activities from occurring. Complete and accurate data is vital to resolve these issues, and the uplift of data quality will immediately affect the existing monitoring and screening engines’ performance.

Conclusion

Advanced analytics, such as AI, machine learning, and automation, can help filter out false positives and improve inefficiencies in existing investigative processes. As a result, there are many opportunities for data and analytics to drive efficiencies and operational cost reductions and, more importantly, to identify intelligence-led and data-driven ways to tackle financial crime.

For all of this, you need the best resources you can get. We at Signzy identify your needs and help you forge the solutions using our AI-driven API resources, which are completely customizable. Check out our website to learn more.

About Signzy

Signzy is a market-leading platform that is 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 totally customizable workflows. 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 it 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.