Know Your Customers (KYC)

Get To Know KYC Procedure in Banks

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A KYC process, which stands for Know Your Customer, is a common verification standard used in financial institutions like banks. Conducting KYC procedure in banks refer to the practice of verifying the customer’s identity and risk profile prior to enabling their financial offerings. For instance, banks will ask for a set of personal documents and review them as a pre-activation process of installment account requests. Generally, KYC in banks involves collecting customer information such as name, contact, and financial statements. By identifying and confirming the data, banks can ensure the legitimacy of the customer in obtaining the services, allowing a guaranteed loan repayment.

Now that we’ve introduced the definition of KYC (Know Your Customer), let’s delve more into the explanation of its step-by-step, potential obstacles and how to overcome them.

The Procedures

During the implementation of KYC procedure in banks, there are several stages of process that are generally carried out, encompassing:

  • Collecting Documents: Initially, banks will gather certain documents from customers as a basis for further evaluation. The required document types may vary depending on each bank’s regulation.
  • Risk Evaluation: After the data compiled, banks need to investigate the reliability of customers by examining closely through their financial background. Identifying if there’s signs of poor financial behavior or not helps banks determine their risk levels.
  • Documentation: The way banks record-keeping the documents submitted stands fundamentally important throughout the entire process. Adequate documentation assists banks to comply with the risk management procedures.

The Challenges

With the importance of KYC implementation acknowledged, we also have to anticipate the challenges often encountered during this process.

  • The complexity: As gathered data points are wide-ranging, the difficulties in analysis subsequently increase. Banks must conduct comprehensive assessment and discern connections between the information pieces to reach a valid conclusion regarding the authenticity of the customer.
  • The quantity: From just a single customer, banks already have diverse documents to review. But, there’s a high possibility bank officers meet a large number of customer applications, requiring them to maintain timely services while handling a substantial influx of paperwork.
  • The quality: The need for accurate and efficient process also weighs bank officers in conducting the KYC procedure. To ensure careful decision-making, banks must process KYC with a proficient workflow.

The Solutions

The technological development has grown significantly over time. The cutting-edge automation platform plays a pivotal role in transforming banks to conduct business activities more efficiently. User-friendly access and high-speed processing provided by this platform help banks establish a competitive edge in today’s intense market.

The first tool that matches to streamline the data entry of KYC process is OCR (Optical Character Recognition). OCR by Fintelite allows banks to digitize essential data faster and easier. Its capability to extract every detail from multiple documents reduces the time banks spend on monotonous data input.

Another tool worth considering is analytic tool, such as Fintelite Bank Statement Analyzer. A study revealed that bank statements are included in the top three relevant documents in credit risk evaluation. Therefore, analyzing transaction records from bank statements has proven to help banks generate valuable financial insights. By examining e-statements with AI-analytic tools, banks can learn about their customers deeper. Moreover, the analytic tool can also present information in a clear and easily comprehensible manner.

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Fintelite offers intelligent OCR that efficiently captures multiple documents 10 times faster. It supports various document types and is advanced with an accuracy rate of over 90%. Get advanced by connecting to our Bank Statement Analyzer. Turn the data into visualized understanding. Our fraud detections capably identifies irregular and suspicious patterns within transaction histories, preventing banks from making risky decisions. Seize the opportunity to elevate your document processing to the next level. Try it now for free and experience how it can further benefit you.

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