How well do you Know Your Customers? Sure, you perform KYC (Know Your Customer) checks on all new clients, but is that enough? How do you determine the validity of their ID? Are you skilled enough to tell the difference between a well-faked passport and a real one? Unless you have been specifically trained in the eight identifiers to look for, the chances are you wouldn’t be able to tell the difference.
In an attempt to counter crime and money laundering, all financial institutions are required by law to verify the identity of new customers, and periodically while they remain clients. This process must be repeated once in every two years.
Globally KYC has become mandatory for any transaction that involves business to client interaction. From banks, insurance and councils to legal agencies and accounting firms, the first thing any individual has to provide is proper KYC documents – identity documents and proof of address. These documents are then usually checked, photocopied and recorded in the filing archives of the business.
If KYC is mandatory, why do levels of fraud continue to be so high?
PwC’s 2020 Global Economic Crime and Fraud Survey found that 47 per cent of respondents had experienced fraud in the past 24 months – the second-highest reported level of incidents in the past 20 years.
As with anything that requires manual processing, there is always room for human error. With KYC checks relying on a person to verify the identity documents, a lack of knowledge and training and security complacency can mean that the level of risk for businesses is high, leaving them open to fraud.
The reason fraud is so commonplace is because criminals are good at what they do and are continually innovating to find new, better ways to commit fraud. By simply looking at a document, which is how most KYC checks are performed, it is easy to be fooled into thinking it’s an original and valid document.
Relying on an individual who is untrained in the complexities and latest developments in fraud to correctly verify identity documents is not enough. A British passport, for example, has eight security features that need to be checked in order to verify its authenticity. When you’re presented with a passport from a foreign country, how do you even begin to know how to verify its authenticity? Accountants, lawyers or any other highly qualified financial professional just don’t possess the necessary skills to verify KYC documents to a high enough standard.
Once KYC checks have been completed, organisations must ensure the security of the documents within their system.
According to the Government’s Cyber Security Breaches Survey 2020, 46 per cent of businesses have reported cybersecurity breaches or attacks in the last 12 months. And the frequency of such attacks is increasing.
When customers entrust their personal identification documents with a business, it is in the belief that they will be stored securely and not vulnerable to cyber attack. If your business is hacked and all of your customers’ personal data is leaked, the effect it will have on your business’s reputation will be detrimental.
Galaxkey’s eKYC solution, powered by Yoti
Galaxkey has teamed up with Yoti to solve the problem of both human error and security complacency. Our eKYC product offers a significantly more secure solution for both customers and businesses. It also speeds up the process, allows KYC checks to be completed remotely and lowers the risk of fraudulent transactions.
Yoti is a smartphone app that allows customers to upload their identity documents, which are then checked by a specialist team of experts at Yoti to confirm their authenticity. Once the information has been verified and validated, it’s added to the user’s account, ready to be shared by the customer with anyone who needs to see it.
After the initial seven-day validation period, users’ data is only accessible to the individual themselves – until they grant access to a third party. The Yoti app is free of charge for customers.
When paired with Galaxkey, Yoti enables us to make the KYC process simple, quick and secure. We request KYC via an email that contains a QR code. By scanning the QR code on their smartphone, the recipient can then use the Yoti app to complete KYC.
This data is converted into a customisable report that is stored securely in your organisation’s Galaxkey Workspace. The user will receive a notification on their phone when the data has been sent. All files held in the Galaxkey Secure Workspace are encrypted and only accessible to the intended recipients. In addition, all the identity documents are watermarked to prevent misuse of individual data that is captured.
With Galaxkey’s eKYC solution, powered by Yoti, customers are reassured that your organisation takes fraud seriously and are investing in technology to keep their personal data safe. For businesses, Galaxkey eKYC ensures that all identity documents are properly verified to the highest acceptable standard.
If you would like to find out more about how Galaxkey’s eKYC solution can help your business meet compliance and reduce the risk of fraud and cybercrime, get in touch today for a free 14-day trial.