eKYC is electronic customer identification, which is the activity of creating and attaching digital identity to the subject to simplify procedures and documents, creating convenience for customers. This is an extremely important process of customer service.
What is eKYC?
eKYC (Electronic Know Your Customer) is an electronic customer identification and authentication solution, allowing banks to identify customers 100% online based on biometric information, identify customers using artificial intelligence (AI), … without having to meet in person as in the current process.
Currently, with the approval of competent management agencies, banks in many countries have been converting the form of customer identification from KYC to eKYC because eKYC is the digital transformation of KYC.
KYC stands for Know Your Customer, which is a process to verify the identity of customers when participating in banking services such as opening accounts, withdrawing money, depositing money, etc. Simply put, KYC helps banks ensure that customers are the real owners, thereby assessing and monitoring risks, preventing illegal fraud.
While KYC is performed at a specific location such as a bank transaction counter, eKYC is performed on an online platform, only requiring operations via a smartphone with an internet connection without having to meet the transaction staff directly.
In addition, eKYC is a fully automated process, performed on the basis of biometric technology. Depending on the level of completion of this technology, as well as the level of risk control of each bank, opening an account using the eKYC method has different difficulties and eases compared to opening at the counter.
In the banking sector, eKYC is only applied to authenticate customers when opening a new account; most other services, such as credit, still require going to the counter to perform KYC.
However, eKYC is only applied to authenticate customers when opening a new account and other services, such as credit, still require going to the counter to perform.
Benefits of eKYC
In the era of technology 4.0, eKYC is considered one of the services applied by banks to attract customers. Accordingly, eKYC is also a solution to shorten verification time, save time, costs, and improve the efficiency of bank operations.
Benefits for users
eKYC is a way to help users minimize time and effort when opening an account. Accordingly, users can open accounts and bank cards via mobile phones without having to wait in line at the counter, without being limited by time and space.
In addition, eKYC will identify online using electronic methods such as biometric authentication, customer identification via AI, comparing personal information linked to a centralized customer identification database, through comparing fingerprint samples on government-issued documents and the customer’s actual fingerprints.
With the eKYC solution, customers only need a few minutes to identify electronically instead of the usual identity verification based on documents that you may spend time waiting and filling out forms, documents… Now, users can complete the procedure automatically online without any manual intervention.
Benefits for banks
In addition to benefits for users, eKYC also contributes to cost savings, increases work efficiency and creates conditions for banks to serve and care for customers better.
eKYC is an essential platform for banks to conduct digital transformation in the 4.0 era. Banks in Vietnam are currently racing to gain market share for digital banking services developed by the banks themselves. Like a miniature bank branch on the phone, digital banking applications digitize all traditional banking activities, including customer identification procedures.
Using electronic identification (Ekyc) is the key to performing online identification, comparing customer information with a centralized database. In other words, eKYC contributes to meeting the digitization criteria of digital banking services.
In addition, eKYC helps banks reduce human resources and personnel costs. eKYC data can be transmitted in real time without any manual human intervention, and it only takes a few minutes to verify and issue. As a result, banks can reduce labor and personnel costs.
eKYC also helps banks build a unified customer information database. Instead of physically storing each branch separately when authenticating at the counter as before, all customer personal information fields through eKYC are digitized and stored in a common data warehouse for all branches.
Cross-checking whether a customer has actually registered an account or not becomes easier, avoiding duplication because a customer can transact at many different branches of the same bank.
Security and safety in banking operations are also enhanced thanks to eKYC. Electronic identification operates according to a process to ensure that customers conducting transactions are real, and continuously assess and monitor risks. eKYC allows for permanent online storage of all records and data.
Any abuse, illegal profiteering or illegal activities that occur can be quickly traced back to the customer using that service. This contributes to increasing customer confidence in digital banking services of banks.
