While it is important for businesses to know their employees, it is equally important that they know their customers and/or clients. That is why KYC, which stands for Know Your Customer is a critical component for any organisation. It is a process that helps to identify and verify that customers are exactly who they claim to be.
Especially in a country like India where a huge population translates to an ever-increasing number of consumers, Know Your Customer (KYC) becomes an important parameter. Did you know that in India, identity theft is the largest and most common form of fraud? It’s true. According to the Fraud Report 2016 launched by Experian India, identity theft accounts for a staggering 77 percent of all reported fraud cases, particularly in the banking and finance sector.
This number may come as a surprise for many, but it is a testimony that we need more stringent and robust KYC solutions in India. With the rapid growth of the sharing economy we live in today, trust becomes more important than ever, and for businesses, effective KYC solutions help to build that trust between them and their customers.
Today, for any company, regardless of which industry you belong to, it is essential that you know your customer. As mentioned before, effective KYC solutions verify that claims made by customers and/or clients are legitimate and that there are no discrepancies. In doing so, it helps to build trust, which is the cornerstone of all positive and successful business relations.
Moreover, KYC checks against customer risk, thereby saving your company from many potential frauds that could cost you lakhs, and even crores of rupees. It also helps to ensure compliance with anti-money laundering policies. Maintaining brand image has become a key factor in ensuring success in capturing the customer base. Having fraudulent customers, bad debt and money laundering practices can be extremely detrimental to the brand’s reputation.
KYC solutions are essential for financial institutions. Before any kind of lending or transaction, the organisation must assess the various risks involved with the client. For example, in lending services, KYC solutions give information about the customer’s job and his/her ability to pay-off the loan. Similarly, engaging with politically volatile or exposed clients may turn the favour of the people and government against your company.
It is wise for companies to tie up with third-party KYC solution providers to ensure that they do not compromise on the safety and security of their business. Professionals, after all, have the tools and skills required to validate data of individuals and entities accurately and instantaneously.
KYC solutions in India with the use of national IDs, utilise advanced technologies and solutions to scan through and analyse large chunks of data and metadata regarding clients, customers, employees and businesses. Also, in the case of B2B services, companies must ensure that the businesses they are dealing with do not have any history of criminal backgrounds or malpractices.
KYC solutions in India are primarily achieved through national identity verification. By mapping the details provided by the customer/employee with that in the database, the correct identity of the customer/employee can be easily and accurately identified instantaneously. In simpler words, KYC helps companies to make sure that their customers and/or clients are not faking the details that they provide through a thorough and reliable cross-checking of data. This is the KYC guarantee.
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