How can online KYC help in fraud & spam prevention? Here's a guide on online KYC verification process, frauds faced by businesses & how KYC helps to prevent fraud & spam.
With the fast-paced growth of digitalization in our everyday lives, we've seen increased internet scams and fraudulent activity. Financial authorities have adopted (KYC) practices to prevent terrorism, bank scams, and money laundering from some unscrupulous players who seek out consumers online for easy targets by opening emails or clicking links that aren't legit. KYC can be a hassle for consumers, but it makes things easier for authorities who use this information to track criminals.
The full form of KYC is Know Your Customer.
Banks have warned people against fraud in the name of KYC updates and advised them not to share critical information, like account details or passwords, with unidentified persons or agencies.
Customer onboarding is the first phase of a potential client relationship with your business. It involves helping clients understand why they are using a product and how they can make the most of it. Often, this involves walking them step-by-step through the processes that may be new or unfamiliar to them, making sure they have what they need to be successful with a product.
KYC (Know Your Customer) practices are valuable to companies in developing and maintaining relationships with customers, clients, and other business entities.
Know Your Customer (KYC) is the practice carried out by companies to verify client identity in compliance with legal requirements and current laws and regulations. It is a crucial step to prevent instances of financial crimes.
KYC is done the first time a customer opens an account with a company and periodically in the future. In simple words, it is done to ensure that the customer who is leveraging the services of an organization is a genuine person.
Financial institutions can deny opening an account if a person does not meet the minimum requirements for KYC.
Since the dawn of the Internet, and with more people becoming so dependent on technology, there has been an unlikely rise in security concerns. It is crucial for business owners to keep their security systems in place and educate their consumers to protect themselves and their consumers from fraud. KYC acts as a deterrent because financial institutions are better at verifying the details of their clients.
KYC procedures defined by banks require all necessary actions to ensure their customers are genuine. These procedures include verifying a customer's name, address, and identification documents such as ID cards, passports, and utility bills to establish that a customer is a real person who exists and is not part of any illegal or criminal operation.
Banks have a legal obligation to follow KYC regulations and anti-money laundering policies. Under the present AML laws and regulations, banks comply with these guidelines. In case of violation, heavy fines could be applied to them.
The most common forms of cybercrime are identity theft, smashing, fishing, and fraudulent online KYC. Scamsters lure unsuspecting users to share their details (can include account login credentials, card information, OTPs, etc.) to gain unauthorized access to their accounts.
Some of which include:
Apart from online KYC Fraud, there are several other frauds that businesses face. Below mentioned are some of them:
When it comes to fraudulent activities, scammers often take advantage of people's lack of awareness. Online KYC frauds can be prevented by increasing awareness among customers. Consumers must be mindful of what they submit online because it might be used against them.
We can also opt for online KYC compliance by visiting the websites of any KYC Registration Agency (KRA).
The following documents are required for eKYC Registration:
We hope you found this article on KYC helpful! Having the correct information can help you stay safe online and prevent you from falling victim to a scam. For more information, please visit https://hyperverge.co/ . We help our clients to empower their applications in the domains of finance, telecommunication, defense, and security.