How to perform KYC and Document Verification process

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Financial institutions are always at risk of facing fraud. They deal with money and this is why fraudsters are always trying to manipulate them one way or another. The world regulatory bodies have laid out recommendations for them to fight fraud and in order to do that, they must verify the identity of their clients. This is why Know Your Customer regulations came into existence. What makes it easier to carry out the verification process is the document verification solution. In this blog we will discuss the document verification solution and how it has improved the KYC process in financial institutions.

Frauds that Financial Institutions Face

One of the most common frauds these financial institutions face is the identity theft. Criminals steal the identity of an individual and use their information to get access to their funds. They can even make fake accounts to use the platform for money laundering activities and terrorism financing. If the financial institutions are caught with such clients, they too can face the penalties laid out by global regulatory bodies. Not to forget the bad repute they might develop if caught in such a case. Fraudsters can also cause forged document fraud. Then they can create synthetic identity and use that to take part in illegal activities. 

What is KYC?

KYC, also known as know your customer is a process that obligates all financial institutions to verify all their customers’ identity. This is done to ensure that criminals are not trying to take advantage of the financial institutions through fake or stolen identities. The Bank Secrecy Act passed in 1970’s declared that all institutions are required to verify the identity of the customers and report to the authorities for if any suspicious activity is being carried out. If they fail to do so, they will be charged with penalties and even permanent closure of their businesses. The banks are to monitor each and every transaction made and if any transaction being made of more than $10,000 then they are to further investigate and report to authorities. 

Unfortunately, financial institutions also have to face the consequences of managing the process of KYC and verifying each and every customer manually. The operational cost and the time spent on such a process is a stress for financial institutions. AI-based document verification processes help many financial intuitions to perform KYC process within seconds. 

Process of Document Verification

The end-user submits government-issued identity documents for verification. OCR helps to extract information and then convert into the machine readable language.

The documents are verified for authenticity and if the documents are photoshopped or forged, the verification is declined. 

Enhanced document verification also checks for languages and folded ends. 

The image on the document is cross-checked with the photo submitted by the end-user. Hence, spoof attacks are easily identified. 

Here is a list of documents that are accepted for verification.

  • ID card
  • Driver’s license 
  • Tax bill 
  • Bank statement 
  • Passports 
  • Utility Bills

Benefits of Employing Document Verification

Document verification is essential for different sectors of the world. It has several benefits and some of the advantages are:

  • Helps in preventing fraud in the finance sector

Fraudsters are easily caught with such a solution. Criminals trying to take advantage are caught and financial institutions can remain safer than ever. 

  • Ensures efficacy of the customer onboarding process
  • This AI-powered solution enhances the customer experience. The customers no longer have to go through the long process of verifications which helps business onboard more customers.
  • Helps in verifying addresses of individuals.

Address of an individual can also be verified through document verification. Verified addresses help businesses to have better customer relations and enhanced shipments. 

  • Compliance with the KYC/AML guidelines

With document verification, the businesses can remain intact with the law and will not have to face the consequences from regulations. 


Frauds in the finance sector are rapidly increasing and the stringent regulations from FATF are not easy to comply with. Banks and other financial institutions need a robust solution to ensure that fraudsters stay away from the companies. With the help of Know Your Customer (KYC) verification

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