KYC (Know Your Customer) is an especially relevant practice in the financial sector. Here you will be able to find out why, and its relationship with banking frauds, its problems, and how is improving it.

What does KYC (Know Your Customer) means?

KYC or Know Your Customer is the practice carried by the financial institutions with the objective of verifying the identity of their clients, in accordance with the legal requirements.

Why complying with KYC’s regulation is so important?

In todays world, the vast use of the new technologies and the internet have made necessary the use of rules that will help us fight against online fraud.

Thus, KYC answers with a legal and a global position for the rest of the financial entities.

But, what exactly is Know Your Customer?

KYC is a process of verifying and identifying a client’s identity. In other words, the process is a series of controls made to prevent having commercial relations with people related with terrorism, corruption, or money laundering.

KYC in Mexico

KYC must be complied globally, thus it also affects Mexico. The CNBV has taken a further step with the “Ley de Instituciones de Tecnologia Financiera” released last March. Both this law and the “Ley de Insitutciones de Credito” facilitates video identification in the country.

On the other hand, identification based in simple images or selfies are not eligible by Mexican standards.

Why are selfies and images not valid for KYC?

Video identification with selfies is not valid for KYC due to its low technical security level, the weakness of the evidences brought by the process, and the weakness brought by the lack of integrity.

This has caused the security level proportionated by this process to be low, far from the required security for client identification, due to harshest regulations in this subject. These regulations have put in the highest level of technical requirements for the use of video streaming in the processes of KYC and AML.

Do you know the facts about online fraud?

Even today, 1 of 5 adults connected to the internet claims to be victim of a type of cybercrime. To make things worse, every day more than a million of people become victims of cybercrime. The financial costs of these crimes are bigger than the black market for cocaine, heroin, and marihuana together.

What are the challenges facing Know Your Customer to this day?

Today, requiring the client’s identification each time that a company wants to operate with them is very inefficient. Especially due to the poor user experience that the client has go over, this can make them unhappy and may lead to them ending their relationhip with the company.

How has Know Your Customer improved?

KYC has improved thanks to the new AI technologies, leading to a digitalization of onboarding without friction for the user.

Asynchronous video identification, from any device through any channel, is now available. And complies with the most demanding global regulations (KYC, AML5, Eidas). Acquiring new clients have never been this easy. Also, after the pass of the regulation AML5, your company now has access to a market of 508 million potential new clients. Do you want to know how to reach this new market? You can check out this link about AML5 where we explain how.

Our company, through our API videoID allows us to go through the whole process in a fast and efficient way, thus helping the client to register in seconds. So, if you want to know more don’t doubt in contacting us through the following form.

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