Role of KYC in cybersecurity
Cybersecurity and KYC have existed as two separate worlds for longer. Cybersecurity has meant protecting companies from external threats such as antivirus, firewalls, and so on. On the other hand, KYC has been part of the process of incorporating the customer between companies to ensure that the new user is eligible after passing the security checks.
The fusion of KYC and cybersecurity is another byproduct of the coronavirus pandemic. As confinements forced people into their homes, there was a boom in online business. He also made cyber threats a part of everyday life. About 71% of IT and security professionals around the world have reported an increase in security threats and attacks since the outbreak of the pandemic.
What is KYC?
Financial institutions are more vulnerable to criminal activity than ever before in the global economy. Know Your Customer (KYC) standards have emerged to protect financial institutions from fraud, corruption, money laundering, and terrorist financing.
The KYC involved:
- Establishment of the client’s identity
- Understand the nature of the client’s activities
- Make sure there is a legitimate source of background
- Money laundering risk assessment
KYC has always been important to businesses. It was mandatory for regulated entities, but it has become more important for all companies with more technology adaptation, especially when most services are offered online. It acts as an initial checkpoint for the customer, as it contains personally identifiable information such as biometrics: fingerprint, IRIS and face. They ensure that the uniqueness is verified before providing any service.
How does KYC help with cybersecurity?
57% of companies have reported fraudulent losses related to account opening and account taking. It means that cyber threats are infiltrating KYC processes and need an extra layer of protection. There are currently companies offering secure KYC solutions for better cybersecurity. Using artificial intelligence and machine learning technologies, facial vivacity solutions help prevent fraud by enabling an infallible verification process. Before it seemed impossible to do facial vivacity tests without physical verification, but today you can do the same with a selfie or a quick video call. Social media platforms can deploy these technologies to prevent cybersecurity fraud.
How do KYC services ensure hassle-free identity checks?
Businesses and businesses can opt for easy integration of KYC APIs and ML algorithms. They can be easily integrated into any organization’s leading business applications. It leads to a smooth journey for the customer along with the incorporation of verified customers. Apart from that, AI and ML technologies are being used to validate the documentation. Technologies com optical character recognition (OCR) document extraction and verification also come to light. They empower companies to collect transformed images. Like OCR software, it helps you identify and extract letters from the image and put them together into words and phrases. It is very useful to check the authenticity of documents shared by the client.
Role of governments
Governments can play an active role in helping companies with customer identity checks. One such way is unique identifiers like Aadhaar cards in India. Aside from setting up unique identifiers, the willingness of governments to extend the necessary APIs to the private sector, whenever possible, can ensure that KYC is done. It will ensure the elimination of cybersecurity fraud.
Now KYC can be done in seconds and at a really affordable price using modern technology to increase cybersecurity. We now live in a world where KYC and cybersecurity exist simultaneously. The change in the post-pandemic security paradigm has prompted companies to ask relevant questions about cybersecurity. They want to keep their customers, data and reputation in place with seamless and secure process integration. As a company, you should never lower your guard and pay attention to the technological solutions that guarantee cybersecurity during KYC processes.
Exemption from liability
The opinions expressed above are those of the author.
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