KYC Remediation Grows More Robust Thanks To New Facial Recognition Technology

“Knowing Your Customer” or “Knowing Your Client” is integral for financial institutions and other businesses dealing with sensitive information. KYC remediation capabilities have grown considerably over the past few years, proving essential in keeping businesses safe. Recently, a new development that impacts facial recognition technology has helped KYC remediation grow even more robust.

What Is KYC Remediation?

KYC remediation is the act of verifying the identity of clients and customers so that companies can assess the risk of entering into business with the said party. Companies of varying sizes can reap the benefits of KYC remediation.

Large companies, such as banks, use KYC remediation to ensure they remain compliant. Small businesses use KYC remediation to protect their assets, making sure that they are only entering into deals that are legitimate. Remediation techniques typically contain four primary elements:

• Customer Acceptance Policy

• Risk Management Assessment

• Customer Identification Procedures

• Monitoring of Transactions

If you work for a bank, insurance agency, or creditor, regulators may require KYC remediation. In these cases, regulators tend to define a customer or client as someone who maintains an account with the institution, has a relationship with the institution, or has entered into a transaction that can post a risk to the reputation of the bank. Regulators also extend this definition to beneficiaries, significant others, and similar parties.

Why Is KYC Remediation Important?

KYC remediation is critical in helping to ensure that customers or clients are not involved in illegal activities or money-related crimes. An effective KYC remediation strategy can help ensure that your business does not find itself engaged in:

• Money Laundering or Wire Fraud

• Corruption

• Terrorist Financing

Remediation helps avoid potential legal issues by flagging those who may participate in risky behavior. If an institution can identify dangerous or illegal conduct in its early stages, it’s easier to stop engaging in business with the client and report them to the proper authorities. Catching this type of behavior can protect an institution’s reputation and assets.

Typically, during the remediation process, an institution will address potential red flags with the prospective client or customer. They can ask the prospective party to clarify any contradictory data and provide more information as requested.

After the KYC remediation process is complete, an institution could decide that they do not have a desire to enter into business with a client or a customer. Or, they could choose to enter into business but to do so cautiously, keeping an eye out for red flags and installing compliance checkpoints to help ensure the client’s integrity.

In summary, KYC remediation is critical for companies both small and large because it provides them with streamline, up-to-date information about the parties with who they’d potentially enter into business. Remediation could also ensure that companies are compliant with federal and state laws and regulations.

2D Barcode Scanners Can Now Read ID Pictures

KYC remediation has grown significantly more robust over the past few years. One of the areas where KYC capabilities have excelled is in the “Customer Identification Procedures” category. One of the most prominent pitfalls of prior KYC remediation techniques was that clients and customers needed to provide multiple forms of paper identification. This often proved troublesome and inconvenient for both the client and the soliciting party.

Fortunately, this is no longer an issue for businesses. Recent developments in facial recognition technology allow for 2D barcode reading from ID pictures. This means that companies can use a scanner to quickly obtain all relevant information from a prospective client’s state-issued driver’s license or passport.

Although this concept has recently become available commercially for businesses, the idea has been around for a few years. For instance, in 2012, Marco Querini and Giuseppe Italiano released a paper at the Federated Conference on Computer Science and Information Systems that proposed “novel use of 2D barcodes to store biometric data, in particular for facial recognition, which represents one of the least invasive biometric techniques.”

The duo focused on improving facial recognition technology by combining local facial descriptors with shape landmarks that were “identified through statistical models for discriminating faces.” Researchers also sought to secure biometric information through digital signature algorithms, which protected the data from “malicious tampering.”

The researcher’s proposal has since become a reality and is now available for businesses both small and large, granting them  the ability to conduct KYC remediation that is:

• Secure

• Quick

• Convenient

As you may imagine, this has enhanced KYC remediation tremendously. A process that typically took days can now be completed in significantly less time. If you’re a business owner looking to expand your KYC remediation capabilities, be sure to contact us today.

Our experts can provide you with the latest technology for a more robust KYC remediation experience. Even if your company is not required to complete remediation, it could be a small investment that helps protect your assets and reputation.

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