What is eKYC (Electronic Know Your Customer)?

KYC compliance

eKYC stands for electronic Know Your Customer and refers to the digital process of remote, paperless process that minimises the costs and traditional bureaucracy necessary in KYC checks. eKYC uses digital identification processes with the aid of technology such as AI (e.g. Facial Recognition, live-check, photo capture, etc.) and Machine Learning to digitise the manual KYC process, consequently authenticating a customer’s identity electronically completely remotely.

As the criminal element has grown and the threat to this security increased, the prevalence of eKYC has grown, providing growing benefits to customers and businesses. The forging of identities and personal information is increasingly common in today’s digital world. The primary purpose of eKYC is to minimise the risk of identity fraud, making processes not only more efficient but more secure. 

The process of verifying a customer’s identity consists of a series of checks that ensure the person is exactly who they say they are, using identity documents and methods of verification. The regulations in place guide the process and all checks must be completed in order to remain compliant. 

To ensure that eKYC meet the same safety standards as traditional processes of identification and face verification, companies must implement electronic identification processes with high levels of safety and reliability and following the rules set in AML regulations.

What is the difference between KYC and eKYC?

Know Your Customer checks can be completed both online and in-person, whereas eKYC checks are exclusively electronic. 

There are no great differences between the two other than that. Both include a set of procedures to verify a customer’s identity against the available database of records and watchlists. This comes before accounts are allowed to be opened and approved to conduct transactions in the systems with banks and other financial institutions. KYC and eKYC are first and foremost in place to protect both financial institutions and their customers, also aiding in tracking funds being introduced into the economy based on who and where it comes from.

With the drastic digitisation of processes post-brexit and COVID-19, businesses are pressured to keep up with the change and stay ahead of the curve. Customers expect to experience simple and efficient processes in today’s always-on world. Companies are adopting remote verification and automated processes in order to provide a seamless onboarding experience. 

While KYC checks have sometimes taken weeks to complete, eKYC is the digital and remote transposition of the traditional KYC process, taking just seconds with a lower cost in an optimised process. With the correct documentation at hand, eKYC verification can be completed immediately and smoothly, with businesses increasing their conversion rate leading to greater customer satisfaction.

How does the eKYC process work?

In the UK, eKYC processes are essential for regulated firms, especially in the financial sector, to comply with AML and counter-terrorist financing (CTF) regulations. The eKYC process involves verifying the identity of customers electronically, using digital means to collect and verify customer information.

eKYC can have a profound impact on customer experience, revolutionising the way individuals engage with regulated firms, particularly in the financial sector. It is a key element in shaping a positive and modern customer experience. By combining speed, security, digital accessibility, and personalised services, eKYC contributes to a customer-centric approach that aligns with the expectations of today’s tech-savvy and discerning consumers. The impact of eKYC goes beyond compliance, playing a vital role in building trust, loyalty, and satisfaction among customers.

The benefits of eKYC

In today’s ‘always on’ environment, customers want the convenience of signing up to a product or service in minutes, from anywhere, on their own device. Businesses need to efficiently respond to this increasingly preferred demand for remote onboarding, led by hybrid initiatives. 

The benefits of implementing eKYC include:

  • reduced time completing processes, saving customers time
  • automated risk management
  • save time and cost by minimising the need for in-person appointments
  • stronger fraud protection with continued monitoring
  • increased customer satisfaction

There has always been a need for regulated entities to both onboard clients accurately and to monitor any changes to their status. This process can be cumbersome, particularly if internal systems are manual or partly manual. At NorthRow, we help businesses conduct secure and seamless eKYC processes with our integrated platform, including liveness verification, and ongoing watchlist monitoring. 

Reduce abandonment during client onboarding and instill trust by providing a smooth, frictionless onboarding experience to your customers. Book a free demo to learn more.

Last updated: Tuesday 28th November 2023

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