KYC processes are a tough row to hoe for companies because of the time and costs they spell for them. Financial institutions are shelling out $60 million on an average for complying with KYC obligations and Customer Due Diligence. For some of these companies, these costs even shoot up to $500 million!
The cost of KYC, while bothersome enough on its own, it is just a part of the bigger problem. The complexity of KYC processes is also rising because of evolving laws and regulations around it. The gravity of this issue can be deduced from the fact that Standard Bank was fined £7.6m in 2014 for failing to implement sufficient AML controls. In fact, between 2010 and 2016, banks in the U.S. paid a whopping $160 billion in fines because of their non-compliance with KYC and AML laws.
Owing to the complexity of KYC processes, the amount of time these processes demand is another bitter pill that organisations have to swallow. The Thomson Reuters 2016 Know Your Customer survey revealed that the time taken to onboard a client could exceed 2 months, or even 4 months. The time taken, the tedious paperwork and the communications, all cause friction between the organisation and the customer.
Adding to the gamut of these problems is the lack of sufficiently skilled people for performing these processes. As KYC become more complex and demanding, companies are faced with the pressure of assigning more and more employees towards these processes. Now since a significant chunk of an organisation’s resources are engaged in complying with KYC regulations, it translates into many missed business opportunities for organisations.
A Blockchain-based solution for KYC
Considering all these problems,VeriME, a Singapore-based company has come up with a novel solution for simplifying KYC processes. Using Blockchain, it has made them seamless, automated and almost instantaneous. VeriME’s D-KYC functionality will allow organisations to KYC their customers without any face to face meetings or doing any paperwork.
The organisations, and their customers, both should have the VeriME app to use the D-KYC feature. The customer will have to create a profile on VeriME, which includes clicking a selfie according to the app’s specifications and uploading identity proof documents and payment methods. The VeriME application then uses its computer-vision algorithms to match and verify
Customer’s selfie picture with the photo on identity proof document, payment methods etc., with an accuracy ratio higher than that of human detection. If the match is successful, the customer’s profile status changes to “Verified”on the VeriME app.
With this profile, customers can complete D-KYC formalities with Service Providers in a matter of seconds by scanning the QR code generated by the Partner organisation. Not only this, customers can use their VeriME profile for authenticating themselves during transactions with VeriME’s partners. The D-SECURE process too takes no more than a few seconds, and is more secure and less expensive than traditional two-factor and three-factor transaction authentication methods.
VeriME is already a working product, with partnerships with eminent Vietnamese organisations such as Ngan Luong, Vietnam’s largest payment gateway, Ebay.vn, a leading online marketplace in Vietnam, and Moin, an eminent Fintech company from South Korea. VeriME’s presale is in full swing and it’s token sale will begin on 1st of February, 2018.
Like D-KYC and D-SECURE, the efficiency advantages of blockchain can be extended to other business processes as well, and make them smoother, less time taking and more cost effective. Let us know about other processes which are benefitting from Blockchain technology in your comments.