eKYC (Electronic Know Your Customer)

When financial products and services are digital, verification systems should follow the lead. Today, regulatory organizations have implemented measures allowing financial institutions to conduct the onboarding process online. This is accomplished through eKYC, which simplifies the processing of financial services. The availability of eKYC online has made it easier to access digital financial goods and services such as establishing a bank account to investing and even taking a loan.

Digital Transformation From KYC To eKYC

KYC is a technique for identifying and verifying a customer’s identification. The procedure comprises a series of checks carried out at the first stage of the customer interaction to ensure that he is whom he claims to be, taking into account his identity, documents, and persona.

This procedure is influenced by several rules, such as anti-money laundering (AML), terrorist financing, electronic identification standards, and trust services (eIDAS). And what is the primary distinction between KYC and eKYC? KYC processes can be created offline (in person) and online (remotely). Here is where we can see KYC’s transition to eKYC. All organizations and economic agents, particularly financial institutions and banks, are undergoing a rapid digitization process. Digital transformation has been one of the most significant shifts in businesses over the previous decade, causing those that ignore this task to lose prospects or even disappear.

Companies and organizations are battling to change and digitize operations that initially appeared tough to automate and remote. However, specialized firms have emerged to accomplish this work, transforming and optimizing processes with cutting-edge technology such as artificial intelligence and machine learning.

Regtech companies have emerged, assisting businesses in implementing laws and legal procedures with solutions that optimize, enhance, and lower the costs of these processes.