• KYC Regulations

    March 10, 2018

    Unsurprisingly, finance and banking require some of the most advanced levels of customer security for their online operations. Such security ensures that resources and data are held securely and are safe from attack or theft. To create watertight security and ensure your capital and data are fully secure, banks employ several layers of security to ensure customers and their resources are protected. Customers must have their details authenticated before they are granted access to the system and before they are able to log in to their account and perform transactions such as transfers or withdrawals.

    This identity verification and authentication process provide higher levels of security when customers log in to their accounts providing high level Know Your Customer authentication mechanism. Policies for customer identification and authentication are researched and decided upon by banking security experts. This enables permissions to be applied to user accounts which control identity verification and authentication. There are many different processes which can be used in KYC authentication.

    1. KYC – Smooth User Interaction

      Using KYC processes enable a smooth conduit of customers through the system enabling them to interact with their account seamlessly without any risk of fraudulent activity taking place. Users become familiar with the authentication and security processes associated with their bank and account. Once they are familiar, it becomes second nature to authenticate and pass through the security layers of the account. Asides from ensuring security, the process also engenders trust from customers who understand the importance of the security process. Once new customers are set up on the system there are a series of initial security measures which must be completed prior to enabling a connection to be made with the bank and the individual account. Once this process has been passed and details have been verified and authenticated, new customers will then be granted access. Access allows customers to continue to their account and perform a range of transactions as would be expected.

    1. KYC – Implementation of KYC processes

      There are many ways to authenticate user identity and enable users to progress deeper into the system. These may involve a series of security questions which seek answers to key security data which only the user will know and thus uniquely identifies the user. Using random questions embedded in the system which are presented to the user in an unpredictable way, ensures that the security systems are stronger and more protected. This in turns ensures that access by hackers or fraudulent access to accounts is much more difficult. Each layer of security questions must be successfully passed before the customer can move to the next layer. Moreover, if customers fail an element of the security questions, they are not told which element they have failed on. This is important because this information could provide fraudsters with additional information which would allow them to find the correct answers by a process of elimination. Each set of questions has been designed to ensure that only the user would be able to answer the questions, for example, the 3rd letter of your memorable word. If the user fails to enter the correct data, the question may change randomly to ask for the 5th or 6th letter of the memorable word. This authentication method is greatly used within the finance and banking industry to verify and authenticate customers and uniquely identify them with their account. 

    1. KYC -360 Degree Compliance

      Fraud and identity theft present real challenges to the finance and banking industry, so much so that it is crucial that they are 360 degrees compliant with KYC processes and procedures. Full compliance with KYC ensures that identity and authentication are fully managed and customers are correctly verified based on the information which they provide. A range of KYC authentication processes must be applied in different security layers to ensure that systems are always ahead of the fraudsters and that unauthorized access cannot be gained to accounts, processes or data. All systems require regular testing and review to ensure that they are robust and fit for purpose. If issues are discovered, then processes must be tested and improved to ensure that 360-degree compliance is achieved by using advanced techniques of customer authentication and password encryption. This may in future include the use of biometrics such as fingerprint technology or iridology or other biometrics which can never be reproduced by fraudsters which will ensure fully secure systems and robust KYC processes.