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How to Automate the KYC process with Autonom8’s Low-code Platform

Maria Christine Johnson

Aug 01 2022
How to Automate the KYC process with Autonom8's low code automation platform

Large financial firms spend a reported $150 million on KYC-related techniques, while their average number of KYC compliance experts has skyrocketed to 307. Online banking and payment services’ quick rise has added a layer of complexity to KYC tasks, making validating identities and combating money laundering more demanding than ever.

What is KYC?

Businesses that come under the regulated sector need to comply with Anti Money Laundering (AML) regulations. To enforce these regulations, businesses follow a Know Your Customer (KYC) process that includes onboarding and regular reviews. This regulatory requirement is present in all banks, insurance, and financial companies. KYC consists of identifying the customer, customer verification, risk tolerance assessment, and ascertaining financial frauds and AML lists.

When a customer wants to register in your business or create a bank account, they have to provide their information. This provided information is then verified against various public record databases and watchlists. AML and Customer Due Diligence (CDD) should be followed to check the customer’s information and monitor their financial activities. This process is carried out to prevent the illegal usage of money like money laundering, terrorism funding, identity theft, and various other fraudulent financial transactions using your bank or financial institutions.

If your bank or money lending organization doesn’t follow the mandatory KYC identity checks for terrorism financing and money laundering by not regularly checking the KYC compliance and customer verification, severe penalties and restrictions will be imposed on your banks. Such penalty costs are usually huge and the trust and reputation of your bank will be tarnished leading to business loss.

What is a KYC Process?

For a KYC process to complete successfully, your customer must provide address proof and ID proof. ID proof can be any government-issued documents like a PAN card, Aadhar card, Voter’s ID, Driver’s License, Passport, or a copy of their passbook. Now, for the address proof they can submit their recent electricity bill, landline or broadband bill, ration card, Aadhar card, voter’s ID, driver’s license, current passbook, or rental agreement. KYC process can be divided into five basic steps –

  • Collecting Information – To create an account with your bank or business, your customer’s personal information should be collected. It can be done either by personally meeting them or virtually. You will need to collect their ID and address proofs such as a pan card, Aadhar card, or voter’s ID, current financial documents like a passbook or bank statements or debit/credit cards, and proof of residence and workplace documents. This information is then passed on to your banking or financial institution’s staff, where they perform a risk assessment check.
  • Checking Documents – After collecting your customer’s data, it needs to be checked and validated. The data from your customer’s documents can be extracted via Artificial Intelligence (AI). The extracted data will be checked against the information provided by your customer. If any discrepancies occur, then the application will be rejected. Another process that involves verifying your customer’s identities involves verifying their identity via video or digital signature. Sometimes, if the picture isn’t clear, your staff may ask your customer for a current picture to better determine your customer’s identity. Digital signatures involve a two-factor authentication, which will enhance your bank’s security.
  • Validating Information – This step determines whether your customer has any previous link to money laundering or terrorism funding or more. Your customer’s information is checked against AML and other necessary regulated lists. According to a report in Business Insider, financial institutions such as banks and money lending companies have received up to $36 billion as fines for failure to adhering mandatory regulatory compliances such as AML, sanction regulations, and KYC. So, failure to check and validate your customer’s information might lead to hefty fines, thereby leading to distrust among your customers and partners.
  • Remediation – This is an important process for banks and financial organizations. This process involves checking and updating your customer’s information. Your client’s data is optimized to ensure regulatory compliance. Change of address, mobile number, updating your customer’s age, and performing other periodic reviews (quarterly, monthly, half-yearly, and annually) are included in the remediation process.
  • Approval – After collecting, validating, correcting, and submitting your customer’s data, you will have to accept or reject your potential customers based on their answers and background check. The potential customer is onboarded if there was no irregularity in the KYC process.

Now, this KYC process can be done in two channels. Your customer can choose to do it either offline or online.

In the offline channel, your customer will travel to your bank and fill in a physical application with their signature and photo. The application is submitted along with copies of their paperwork. Submitting a KYC via an offline channel is a traditional process that heavily relies on your bank staff to perform tedious tasks like data entry, sorting the data, verification, rectifying the errors, and approvals. As this manual process utilizes human work, this process takes up time and effort. This greatly increases the onboarding time of your customers, adherence to regulatory compliance, and costs that rectify manual errors.

In an online channel, your customer can upload their documents and furnish their information via an online form. The information and documents are then verified through manual staff. They will then relay to the customer the status of their application.

Related article: 11 Important Banking Processes to Automate with Workflow Management Software in 2022

Automating the KYC Process with Autonom8’s Low-code Platform

All banks and financial organizations require gathering and sorting data that have been collected from their customers. This labor-intensive process has higher chances of human errors and remediation costs. Sometimes, it can take up to a month to complete the KYC compliance and onboard your customers. As this is a time-consuming process, customers usually have to contact their banking institutions multiple times to complete their onboarding process. This slow nature of the customer onboarding process might lose you your prospective customers. A study has revealed that, in Europe, banks have lost up to 52% of potential customers during the onboarding stage.

Due to the competitive nature of the financial sector, banking and other financial institutions have started to use automation solutions to digitally transform their business. At Autonom8, we use machine learning and Natural Language Processing (NLP) to better understand our client’s processes and provide them with an agile and flexible solution. Some of the key features of our low code platform are listed below – 

Drag-and-drop functionality

Drag-and-drop feature is used to create applications that will run seamlessly on windows, android, and iOS. It is an application development tool that allows developers or business users to create apps. It has various deployment, debugging, and built-in simulation tools that help developers to build the app without having to write a line of code. With this feature, you won’t need a development team giving you 100% control over your idea. You can set your own deadlines and meet them at your own pace. As they are easier to learn and navigate, even people with little technical knowledge can use the drag-and-drop functionality to build their app.

Visual programming platform

Visually define the UIs, data models, and workflows using the visual programming platform at Autonom8. Our A8Flow technology allows you to create workflows that run seamlessly for your organization. While developing an application, you can even customize every action in your workflow. This graphical representation of your company’s processes will be depicted in the form of maps, graphs, or charts. You can integrate your workflow across multiple customer channels as well. Your common business workflows can be activated instantly and deployed on the cloud quickly without having to write a single line of code. 

Secure mask technology

Don’t worry about having your or customers’ sensitive data exposed. Autonom8’s specialized secure mask technology will secure your customers’ documents. Our Fine Grained Control feature will mask every individual customer’s data on a field level. It is then sectioned between the fields based on sensitivity and business needs. If any tampering has been done to the image via hacking or unauthorized internal user, then our Tamper Detection component in the A8Flow will identify the changed image and alert the organization. Your data will be encrypted using an SM gateway and stored in a secured enterprise server. Only people with rights-based access can access the stored encrypted data. 

As financial organizations such as banks and money lending firms usually take up to weeks to complete their KYC process, they spend up to 40% of their time handling the customer onboarding process. Our A8 video KYC has automated the entire KYC process and minimized that time to just 5 – 10 minutes, which will greatly benefit your organization and also improve customer satisfaction. As per RBI guidelines dated 8 January 2020, Autonom8’s video KYC solution is an officially approved method for the KYC process.

Our KYC automation solution is created using artificial intelligence and comprises face-matching tools, geolocation verification systems, and document verification tools. The facial recognition feature will match your customer’s current photo against the photo provided in their IDs to ensure no identity theft is being committed. The geo and time stamping feature will confirm the location of your customer. This increases the data security and is adhered to regulatory compliance. You don’t have to use a manual staff to collect your customer’s data. Our complete contactless KYC verification at Autonom8 will protect your customer’s safety during these trying times.

Incorporating the automated video KYC process in your financial organization will reduce your overall costs by up to 90%. As every person has a smartphone with them, this hassle-free KYC process can reach a diverse consumer base. Our automation process will automatically store your customers’ data for future audits. You won’t have to collect them again. Implementing our specialized video KYC process in your financial organization will increase your onboarding rate, as your potential customers won’t have to wait for a longer time.

We at Autonom8 believe that digitally transforming your business by automating processes like customer onboarding can create a massive impact on your organization in terms of cost reduction, employee retention, and customer satisfaction. Our AI and machine learning technology will efficiently notify you and solve any mishap that might occur automatically, thereby eliminating the need for human supervision and reducing the cost to your organization.

Are you interested in experiencing low-code automation solutions for your banking KYC process? Contact us and schedule a demo with us now.

FAQs on KYC process

What is KYC?

Businesses that come under the regulated sector need to comply with Anti Money Laundering (AML) regulations. To enforce these regulations, businesses follow a Know Your Customer (KYC) process that includes onboarding and regular reviews. This regulatory requirement is present in all banks, insurance, and financial companies. KYC consists of identifying the customer, customer verification, risk tolerance assessment, and ascertaining financial frauds and AML lists.

Can we automate KYC of banking customers?

Yes, KYC process automation provides customers with a smooth experience by eliminating the recurring back-and-forths between customers and the bank when further information is required. With an automatic process, customers can get an easy and fast accreditation or identification experience, resulting in quicker account opening.

What is AML and KYC in banking?

KYC/AML/CFT guidelines aim to stop banks from being used, intentionally or unintentionally, by prohibited elements for money laundering or terrorist financing activities.