KYC Checks – Part 4

KYC checks are procedures used to confirm customer identity. They are implemented during the customer identification program phase of your KYC process. They are used to confirm key customer identifying information such as name, date of birth, identification number and address. Here we’ll look at what some specific KYC checks are and how you can provide them for your business.

What Are KYC Checks?

KYC checks are steps used to confirm key information provided by customers during the customer identification program phase of the KYC process. Some critical pieces of information which need to be confirmed are name, date of birth, personal or business identification number and address. Confirming this information requires verifying data provided by customers through documents such as ID cards and through biometric means such as facial recognition scans. To do this, KYC checks may perform operations such as:

• Reading NFC chips embedded in ID cards and checking whether they have been tampered with
• Inspecting identification documents for authenticating signs such as watermarks
• Checking pictures for evidence of photoshopping
• Using OCR to extract data from documents so it can be analyzed digitally
• Verifying that documents have name fields filled out
• Verifying that addresses provided actually exist
• Confirming that apartment or suite numbers are provided correctly and are not PO box numbers
• Verifying that items such as utility bills and bank account statements are not more than three months old
• Verifying phone numbers
• Comparing data with data from other available databases, such as biometric scans and government databases
• Checking against OFAC sanctions lists

These checks may be performed manually or electronically, depending on what type of check is being done and what technology is being used.

How to Provide KYC Checks for Your Business

Some KYC checks can be performed manually by brick-and-mortar businesses. For example, employees who review ID cards can be trained to spot signs of fakery, such as discrepancies between photos and cardholders, inconsistent data, peeling edges and absence of security features. However, for online customers and for maximum efficiency both online and offline, automated checks are optimal.

There are a couple ways to employ KYC check automation tools. One is to adopt an identity platform which includes KYC tools. Another is hiring a third-party provider which uses identity platform technology. The latter option may be preferable for smaller companies which lack in-house expertise in identity platform technology and regulatory compliance, while the former may be useful for larger businesses with sufficient in-house resources.

Whether you hire a third-party provider or handle your KYC in-house, an identity platform empowers automation of tasks such as:

• Capturing photo ID images and confirming their authenticity
• Confirming that a photo ID holder is a real person present at the location claimed
• Matching faces to ID photos
• Checking photos against facial recognition databases
• Capturing fingerprints
• Verifying biometric data
• Using OCR to extract and digitize textual data from identity documents
• Extracting, standardizing and verifying addresses
• Verifying driver’s license and Social Security numbers
• Reading barcodes and QR codes
• Capturing credit card data
• Running credit checks
• Facilitating electronic signatures
• Assessing identity fraud risk
• Checking data against existing databases
• Streamlining KYC checks for future transactions

Automating these types of tasks increases the efficiency of KYC checks and reduces the risk of human error.

To understand more about KYC, please read the following:

KYC Introduction

Chapter 1 – KYC Verification

Chapter 2 – KYC Compliance

Chapter 3 – KYC and AML Differences

Chapter 4 – KYC Checks

Chapter 5 – KYC Data Remediation

Chapter 6 – KYC for Banking and Finance

Chapter 7 – KYC Solutions