The COVID-19 pandemic is changing the world in many ways.
The most notable change so far is the adoption and acceleration of digital transformation across many sides of life and business, from home-based work and education to drone deliveries and virtual entertainment over traditional theatres and cinema.
With ever more people finding these new forms of service adequate and more efficient, we can expect that they will now co-exist with or even eventually replace their previous incarnations. Among all of those, the Know Your Customer (KYC) and Anti-Money Laundering (AML) processes are first and foremost to evolve.

“Failure to provide digital services now means that organisations literally cannot do business. For the financial industry, the COVID-19 pandemic is forcing a change in the way technology, people and processes come together to manage daily operations and ensure compliance” — says Saurabh Nagar, PhD at Vellore Institute of Technology and we have no reason to disagree with him.

In these harsh times choosing the right verification approach is essential. Automated, manual or hybrid? Which approach gets the best results today and what is BASIS ID’s choice — read in this article.

Several recent studies reveal that one-third of surveyed compliance professionals still rely on a “fully manual” or “mostly manual” customer onboarding, AML and KYC processes, while another third of respondents describe their procedures as “50% automated and 50% manual”.

Although manual verification continues to be in use by various KYC and AML service providers — in our humble opinion, it is in the vast process of being abolished these days.

Manual verification takes a lot of time and resources, which makes it frustrating for both businesses and customers.

Normally the highest cost for a business is human resources: wages and other costs to find, train and keep professional staff. From this point of view, manual verification is the most costly verification method that can dramatically affect the company’s bottom line. 

Besides, as this type of verification involves manual data entry, it potentially introduces errors into the process. Errors can cause false rejections in verification checks. This means data has to be reentered, information has to be reacquired or accounts get declined straight away. Any of these results can lead to higher costs, bad customer experience and other forms of profit losses.

Automation is a game-changer here that allows performing many steps simultaneously, therefore reducing the number of keystrokes, time, and money plus resources investment. What could take hours for a team or days for an individual can be cut down to minutes with the help of the right tools. Undoubtedly, AI-based technologies can help a lot in KYC verification, AML screening, monitoring of identities, etc. 

Automation offers the flexibility that allows to keep existing processes by replicating the steps company’s analysts usually take manually, or to develop a new process based on increased capacity. AI-powered KYC solutions are used to perform document verification in a matter of minutes, along with the verification of the address and true identities of individuals. This technology captures the template of a document, runs spoofing and photoshop detection to make sure that the document was not altered or manufactured. This is the approach we use at BASIS ID.

Though 100% automation, unfortunately, hides some pitfalls too. The problem is in Machine that stays flexible and accurate yet has no capacities to analyse something outside of programmed frames.

So, as a rule, all the documents with a matching percentage ratio below thresholds are being declined, although most times a person didn’t do anything wrong within the framework of law. This can happen because of different transliteration regulations of various organisations, bad video conditions or poor quality of the costumer’s camera during liveliness verification among many other reasons.

A hybrid approach combines human expertise and machine-learning power to deliver a fast, effective, scalable solution. BASIS ID uses this approach too if our clients desire it. We use absolutely every tool to fight fraud, easily providing the expertise of human capabilities, along with the speed and scalability of machines. That’s something most other KYC and AML service providers simply can’t do.

Although initially many companies in this market had claimed to be advanced and innovative, and used to emphasise that they were applying many AI and machine learning methods in their approach — it was not true in a matter of fact. 

The compliance function remained extremely manual and paper-based. Even when it involved a digital element, often this was done through a traditional system within an on-premise IT infrastructure that could only be accessed from the computers at the office.

BASIS ID model has been always transparent from the very beginning. We always talked about the fact that in addition to AI and learning machine processes which we use in our standards, we also rely on our compliance team when it is needed.

This means that when our software solution refuses to accept a customer by some criteria, we receive a system notification explaining the reasons for rejection and our compliance team inspect it in order to determine if it is a false positive or actual matches that system has declined. After that, if we still want to give that customer an approve — we continue the verification process manually.

During this process individuals assisted by BASIS ID’s human resource are asked to upload the images of documents or proceed liveness check again to get their identity verified correctly. 

Whenever BASIS ID performs checks for our business-to-business clients who want white-label services, we leave an option in our management panel to check the status of requests, where we flag up anything that needs attention. These notes show exactly who is suspicious and why; all the submitted requests and action history with those users.

And although we always take the initial decision that meets the requirements of the regulation, in particular cases their internal team can decide themselves whether the data provided is sufficient and make their own conclusion.

Our KYC Verification includes the mapping of client data against fraud prevention and anti-money laundering (AML) protocols to figure out any red flags. Moreover, the customer is also investigated for involvement with Counter Financing Terrorism (CFT), corruption and other illegal activities.

Our facial recognition technology that performs 3D liveness detection for spoofing is highly efficient and impossible to trick. Generally, BASIS ID uses many different and somewhat unique fake detection layers, including error level analysis, “copy-move” detection, luminance gradient test, glare and blur detection etc.

It wouldn’t be a lie to say that our verification approach as a whole is intelligent enough to know if the documents are original or forged.

Such a system empowered with our compliance team makes it a lot easier to comply with KYC requirements and satisfy both our clients and their customers. We do our best to eliminate all the difficulties related to repetitive document scanning and to create a convenient way of identity verification.

Our solution works across all platforms — from desktop to tablet and smartphone — so users can pick what works the best for them.

In today’s online, mobile world, customers’ expectations of smooth and digital experiences are increasing in standards with every day. People do not want to bring all their personal documents to the bank, or other financial institution, to confirm their identity when they need to open an account or to perform other commercial activity. They also hate to waste time on complex procedures, and literally expect “to get a coffee as soon as they walk into a store” 

More and more transactions are performed on electronic platforms, using mobile phones, tablets, and computers. This makes it easy for companies to provide financial services and expand their customer base.

From all the methods of interaction with customers, automation is the easiest and the fastest approach to client onboarding, as well as AML and KYC verification. Simply perform a quick OCR software run, compare results with existing databases —and voilà, done!   

A hybrid approach is the safest and the most secured, as it minimises the possibility of false negatives to zero. It combines the efficiency of automated machine learning techniques with the expertise of human manual checks. It’s a scalable, effective process, proven to balance both the speed and security while catching scam and frauds.

We can all agree that doing this adequately and efficiently while satisfying the demands of the regulator requires a lot of work, expertise, precision. In this manner, BASIS ID offers a solution that covers all the above-mentioned requirements. We provide identity verification everywhere across the globe including EU, APAC, UA, Arab League and the US. Our documents verification service involves full biometric identification which consists of 500 video frames biometric and liveness analysis, 3D face modelling for motion, rotation and blinking analysis, facial expressions analysis and comparison with the identity document, as well as spoofing detection. Moreover, BASIS ID offers screening of customers against sanctions lists, triggers for enhanced due diligence, risk scoring etc based on 43000+ databases and many more. 

No wonder we have one of the best conversion rates in the market.

As William Shakespeare wrote once “It is not in the stars to hold our destiny but in ourselves”.
On this wise, make the right decisions, prosper and certainly stay safe! 

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