Guides & Tips — 20 Dec 2021

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How technologies behind KYC check improve your business

KYC is an essential procedure in organizations dealing with personal data and identification documents when onboarding new users. But too often, identity checks and data verification rely on manual work, outdated procedures, or legacy systems.

By harnessing the technologies behind advanced and automated KYC procedures, your company can expand its user base, rein in the cost of manual tasks, and position itself as a highly compliant and trusted service provider that prioritizes customer satisfaction and operational efficiency.

Outdated KYC practices hamper business potential

Regardless of how well your service or product might serve your target clients, your business won’t reach its full potential if users are faced with a high barrier to entry.

Traditional and manual KYC procedures include complex paper forms and require in-person verification, making them inefficient, prone to human error, and costly. Customers get justifiably dissatisfied, and lengthy onboarding could make them turn to a better-equipped competitor.

Lack of digitization and alignment of data systems across departments adds to the difficulty of managing large data loads. Likewise, fragmented storage and siloed management of data limit the transfer of information that should otherwise power your business.

Lastly, managing sensitive personal information for business purposes is subject to increasingly strict standards. Errors arising from subpar KYC checks could increase the risk of identity frauds, system hacks, and exposure of sensitive data, all incurring a heavy financial toll. In fact, this year alone has seen record-breaking fines issued to banks, gaming platforms, and crypto exchanges for not complying with the latest KYC/AML standards.

For best business results, a KYC system should:

  • Comply with increasingly demanding regulations
  • Focus heavily on security to prevent hacks, attacks, and data breaches
  • Ensure data hygiene with accuracy, reliability, and no risk of human error
  • Provide great user experience and frictionless onboarding to increase conversion rates and financial gain
  • Help bring unnecessary costs down where possible
  • Seamlessly integrate into daily processes to support higher efficiency of your staff
  • Be automated to the highest extent possible

With the right technology, all this is achievable. Here is how Regula can help.

Regula KYC technologies boost productivity and reduce data management risks

Regula Digital Identity Verification Solution combines state-of-the-art and widely tested technologies, each adding a unique benefit to the KYC process from start to finish.

  1. Document type identification & Credit card reading technologies

With an increasing occurrence of frauds linked to forged ID documents, it’s crucial that presented documents are first verified as legitimate and trustworthy. Regula’s document type identification technology combines AI and machine learning to detect fake or invalid documents more effectively and fast than a naked eye. It compares them to a vast database of over 10,000 verified ID templates from around the world. In case of discrepancies, the system immediately warns the administrator and suggests further and detailed inspection.

Benefit: Fast and reliable detection of falsified documents

Similarly, Regula ensures reliable verification of users’ credit cards. While the visual imaging of OCR (optical character recognition) technology identifies the card type, the AI and intelligent machine reading help extract data from relevant fields. The latter works for various text formats, either embossed, engraved, or printed, and supports accurate auto-filling of credit card processing forms.

Benefit: Accurate entry of credit card data for faster processing and fewer errors

  1. Face matching & Liveness detection technologies

According to The Federal Trade Commission (FTC), identity theft cases doubled from 2019 to 2020 and continue to rise. For untrained staff, it could be hard to tell whether two different images represent the same person. Regula’s face-matching technology looks for similarities between two facial portraits. After performing facial detection, it converts the image into digital information and then compares it to a reference photo. This provides excellent results even in challenging conditions, such as strong or low lighting and motion blur, and takes into account the physiological changes of a person over time.

Benefit: Easier and faster facial detection

Identity thieves and fraudsters keep inventing creative ways of mimicking a real person, using photos, videos, 3D masks, and prosthetic devices, to trick biometric KYC systems. Regula’s liveness detection that relies on AI and machine learning helps you determine whether a new user is an actual person, simply using 2D or 3D cameras. This improves biometric KYC systems with higher accuracy and reliability, as they become less prone to deception.

Benefit: Improved biometric systems and higher protection from unverified users

  1. OCR technology

Manual data entry is slow, prone to errors, and requires intense focus and attention to detail. The optical character recognition technology (OCR) manages digital data faster and more accurately by converting typed or printed text from documents into machine-readable data. Regula’s advanced OCR solutions further combine pattern recognition, AI, and computer vision to strengthen the identification and processing of more than 600 data categories.

Benefit: Faster data entry and processing with lower risk of error and data hacks

  1. MRZ reading & Barcode reading technologies

Many ID documents, especially newer ones, come with a machine-readable zone (MRZ) that ensures accurate data reading and speeds up ID verification. But without the right technology, its potential to optimize processes goes to waste. Regula’s MRZ reading technology takes full advantage of the machine-readable zone with swift and accurate decoding of vital data contained therein.

Benefit: Faster reading of vital information, higher accuracy, and less manual work

Similarly, barcodes on ID documents link to extensive data that might otherwise not fit a document’s physical format. With direct and high-quality scans ensured by Regula Document Reader SDK, 1D and 2D barcodes can be scanned with a mobile or web camera and automatically parsed into text and graphic fields.

Benefit: Easy scanning for reliable data extraction and automatic data entry

  1. RFID reading technology

Newer ID documents are also equipped with RFID (radio frequency identification) tags that store electronic information and transmit it via an electromagnetic pulse. For higher safety, these tags do not have to be visible to be read but do require proper technology for data to be extracted. Regula’s RFID reading technology is a part of the Regula Document Reader SDK and takes full advantage of RFID tags with secure sourcing and entry of valuable information.

Benefit: Straightforward reading of documents equipped with RFID tags

A reliable KYC system can optimize your business on many fronts

KYC procedures are now standard in many industries, but their existence doesn’t mean they are optimized. Robust KYC systems with advanced technologies help your business increase its value with:

  • Higher efficiency through faster and more reliable detection of document type and included data, reducing the pressure on employees
  • Better accuracy through secure auto-entry and processing of data, and guaranteed transparency of data from source to destination
  • Improved security of user base through improved biometric systems and prevention of identity theft, data hacks, and fraudulent use
  • Enhanced data safety through compliance with the latest regulations and strict legal standards
  • Wider usability through swift recognition of different documents, broader use potential, and implementation of advanced data protection technologies
  • Improved user experience through easy document scanning and faster data processing that leads to greater onboarding and customer satisfaction.

Combining the benefits of each technology, the complete Regula KYC Platform serves an end-to-end KYC solution for enterprise users with:

  • Seamless integration into your existing data systems and product framework
  • Ease of use and higher security compared to an optical scanner
  • Offline capability for use in no-network environments
  • Document reading in 90+ languages paired with special character recognition
  • Data security thanks to offline and on-premise processing

An investment that pays back with interests

KYC is a process that influences several aspects of doing business. While necessary, it takes its toll on administrative staff, budgets, legal department, and product development team. A transition to an optimized KYC system might seem daunting, but the benefits soon become tangible as the company gets more competitive and relevant on the market.

The advanced Regula Identity Verification solution brings a two-fold advantage to your business. First, the comprehensive SDK supports your development team in building better products and services. And second, its functionalities allow you to serve your customers with the best onboarding tools, ensure their safety and optimize your internal processes.

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