What is eKYC?
Businesses today rely on technology to facilitate and automate their daily operations. One essential component is “electronic know your customer (eKYC) – a process used to verify the identity of customers to mitigate compliance risk and deter fraud.
With the advent of electronic systems, eKYC has become a game-changer for modern businesses. Whilst complying with regulations and preventing fraud, it provides a quick, straightforward and convenient customer onboarding experience. The added experience eliminates the need for customers to visit a physical location and speeds up the verification process.
However, there are issues surrounding eKYC systems that can cause disruption and delays for businesses and customers alike. If ignored, these issues will lead to users distrusting the brand and the subsequent loss of revenue.
1. Server Downtime
Failed verifications often occur when servers are down, especially during off-peak hours. This unavailability is caused by scheduled maintenance, software updates, hardware failure or network outages. When this happens, customers are unable to access the service, resulting in businesses losing revenue and reputation.
To address this downtime, an SLA, or Service Level Agreement should be drafted when appointing a service provider. An SLA is a contractual agreement between a provider and the client (the business) that outlines the level of service for the provider and the expectations of the clients. The contract also specifies the measures that the provider will take to minimise downtime as well as the compensation in the event of any unexpected service interruption.
To accurately evaluate an SLA, businesses need to pay attention to certain key points such as service availability, server uptime and response time. An in-depth review ensures that the server and service uptime is always on the standard. If the SLA does not meet set requirements, the provider should provide compensation to customers or take other steps to make up for the interruption in service.
Fun Fact: Did you know that Innov8tif has an average 99.975% of uptime?
2. Risks Involving Data Integrity, Security and Access Control
With the rapid advancement of technology and security, so does the threat of hacking and scams. According to a report published by the Identity Theft Resource Center, there were 1,862 data breaches in 2021, a 68% increase from the previous year (1,108 cases). Hence, data integrity and security is an important concern, especially when it comes to verification systems such as eKYC.
Without any proper security, eKYC systems are vulnerable to cyberattacks as it stores sensitive user data such as personal information and ID documentation. One data breach can lead to innumerable damage to a company’s integrity.
Hence, proper access controls and encryption is crucial in protecting customer data. By authorising access to the appointed personnel as well as encrypting the transmitted data, the data is secure from any unauthorised access from internal or external parties.
EKYC has proven to be invaluable for businesses as it reduces risk and increases efficiency. However, for it to be truly successful, it needs to be integrated with an infrastructure that is capable of scaling.
To meet the demands of customers whilst maintaining data security, businesses need a verification system that can handle the amount of growth within the database. With a scalable verification system, it ensures that both the security and growth of data are streamlined.
So what makes a scalable system in eKYC and why is it so important?
A scalable system is a system that adapts and handles rapid changes to workloads and user demands. For eKYC systems, this is measured on how well the system responds to any changes made by adding or removing resources to meet demands. A scalable system allows businesses to handle more customers and transactions without delays or errors, enabling growth, expanding the customer database and improving the overall user experience.
There are a number of ways to implement a scalable system, from creating a flexible design architecture to robust monitoring and analytics. However, there is no doubt that having a scalable system provides the ease of mind for business owners to onboard their customers in a smooth and efficient process.
Click here to read about the challenges of digital scaling.
4. User Error
User error is another factor that needs to be accounted for as well, as it creates delays, inaccuracies, and compliance risks for businesses.
It is important for the user to read upon the instructions displayed as well as capturing a clear and concise photo during the onboarding process, and not deviate from any of the steps provided.
A failed ID verification can be caused by a variety of factors, such as bad lighting or angle, poor photo quality and using a photocopied ID. This is because eKYC systems depend on computer vision technologies like microprint detection and Optical Character Recognition (OCR) to read important information on the user’s document.
Each verification system has its own set of complex architecture to keep it tight and secure, and eKYC is no exception. There are a series of checks run during the verification process to ensure that the user’s data is safe from harm’s way.
How Can eKYC Improve User Experience And Benefit My Business?
Businesses today leverage eKYC by streamlining the ID verification process to improve the experience of their customer’s onboarding journey. On top of that, it has proven to be a valuable asset in modern businesses.
However, businesses need to educate users on how to properly utilise eKYC to maximise their data security. This ensures a smooth and efficient onboarding process, preventing user errors and mitigating compliance risks while enlightening customers on the security of eKYC and its benefits.
At Innov8tif, we provide verification services with eKYC being one of the few specialities offered. Powered by our flexible EMAS CIDA ecosystem, Innov8tif has assisted numerous businesses from a myriad of industries in 10 ASEAN countries to mitigate frauds and scams. With verification checks done across BFSI, manufacturing industries as well as the local authorities, EMAS CIDA is tailored to suit your business needs and scalable across various applications.
To inquire about any of our products or services, get in touch with our team at [email protected]