Banks Should Turn to Using AI in eKYC in the Digital Arms Race
This article first appeared in Fintech News Malaysia, authored by Vincent Fong.
There’s an old joke on how on the internet nobody knows that you’re a dog, which speaks to how the internet has become synonymous with anonymity. While anonymity is fine in many instances, in an increasingly digital world it has become crucial that you are who you say you are.
Nowhere is this more critical than in the financial services space, where banks are required to ensure that your funds are lawfully gained and are not channeled to some nefarious activity. For the longest time banks in Malaysia required you to show up in the branch physically to conduct a face to face KYC.
All that has changed, when in June 2020, Bank Negara Malaysia released its much-anticipated guidelines for eKYC in Malaysia. The policy document was created in recognition of the importance of digital identity as an enabler for user convenience and cost efficiency for financial institutions. As such, the framework included guidelines for the use of AI and machine learning in identification and verification. AI is viewed by the regulator as a tool for “reducing human intervention”.
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