Shivangi

Video KYC Go-to Verification for Financial Institutes

Video KYC: Go-to Verification for Financial Institutes

Introduction

Know Your Customer (KYC) is a process of verifying the identity of customers to prevent financial crimes such as money laundering, terrorist financing, and identity theft. KYC is mandatory for banks, insurance companies, mutual funds, and other financial institutions to comply with regulations and mitigate risks.
Video KYC is a technology-driven solution that has revolutionised the KYC process by allowing customers to complete the verification process remotely. Video KYC offers a faster and more convenient way of performing KYC checks, eliminating the need for physical documents.
The global e-KYC market is expected to reach USD 1,568.95 Million by 2027, growing at a CAGR of 23.4% during the forecast period from 2020-2027. The increasing adoption of digitalization and the rising demand for efficient KYC processes are the key factors driving the growth of the e-KYC market.

Exploring the Functioning of Video KYC: A Tentative and Informative Perspective

KYC (Know Your Customer) is a process that banks and financial institutions use to authenticate customer identities. Video verification offers a more efficient and secure alternative to traditional methods, which explains its growing popularity among institutions.

How to do Video KYC

Step 1: Registration

 

To access bank accounts, loans, and insurance policies, banks now mandate customer registration for various purposes, including ID verification and loan applications. Registration is essential for maintaining trust and security during the customer onboarding process. Video KYC enhances the customer experience by making onboarding faster.

Step 2: Profile Input

 

Banks collect profile information by gathering essential details, such as customer names, security numbers, contact numbers, and addresses. Video KYC has become one of the most efficient and secure ways of conducting KYC due to its numerous advantages, including speed, convenience, accuracy, scalability, and compatibility with advanced mobile money solutions.

Step 3: Face-to-Face Virtual Call

 

Video KYC enables identification through video footage rather than solely relying on photo IDs. This technology has transformed how bank officials verify customer identities, making it so reliable that many banks now consider it their primary method of identity verification. Video KYC is not only less time-consuming and expensive, but it also minimizes the risk of fraud or personal data misuse by customers.

Step 4: Verification

 

Bank executives can virtually verify customers by examining physical documents during a call. Customers must present all necessary physical documents, such as address proof, ID proof, and security numbers, to finalize the verification process.

Advantages of Video KYC Adoption

Bank executives can virtually verify customers by examining physical documents during a call. Customers must present all necessary physical documents, such as address proof, ID proof, and security numbers, to finalize the verification process.
Advantages of Video KYC Adoption
The integration of video KYC as a preferred customer authentication method has brought numerous benefits to various financial sectors. Here are some of the specific advantages for banks, insurance companies, mutual funds, and Non-Banking Financial Companies (NBFCs):

Banks

Streamlined account opening

 

Video KYC for banks simplifies and expedites the account opening process by eliminating paperwork and reducing manual input.

Enhanced security

 

Banks can better secure customer data and reduce the risk of fraud by implementing video KYC, which uses advanced technologies such as AI and liveness detection.

Improved compliance

 

The adoption of video KYC enables banks to better adhere to regulatory requirements and minimize the risk of non-compliance penalties.

Insurance Companies

Accelerated policy issuance

 

Video KYC for insurance companies reduces the time required for customer verification, leading to faster policy issuance and improved customer satisfaction.

Lower operational costs

 

By implementing video KYC, insurance providers can reduce the expenses associated with traditional verification methods, such as physical document storage and manual processes.

Better customer retention

 

The ease and convenience of video KYC increase policyholders’ satisfaction, thus promoting loyalty and retention.

Mutual Funds

Quicker onboarding

 

Video KYC for mutual funds streamlines the investor onboarding process, providing a seamless experience for new clients.

Wider reach

 

With video KYC, mutual funds can cater to a broader audience, including investors in remote areas, who may not have easy access to physical branches or documentation centres.

Enhanced investor engagement

 

By reducing barriers and simplifying the authentication process, video KYC fosters increased engagement and satisfaction among investors.

NBFCs

Expedited loan processing

 

Video KYC for NBFCs enables faster identity confirmation and document verification, resulting in quicker loan processing times.

Strengthened data security

 

NBFCs can mitigate data breaches and identity theft risks by leveraging the cutting-edge technology provided by video KYC.

Improved compliance and risk management

 

Adopting video KYC helps NBFCs comply with regulatory requirements and manage risks more effectively, minimizing potential non-compliance penalties.

The advantages of video KYC for banks and financial institutions are evident – it is quicker, more straightforward, and safer! By employing video technology, institutions can authenticate customer identities using biometric parameters such as facial recognition and retinal scanning.

Contrasting Video KYC with Traditional KYC: Understanding Key Differences

Speed and convenience

  • Traditional KYC: Manual customer identification programs can take weeks, leading to customers abandoning the process mid-way.
  • Video KYC: A digital version that is faster, more secure, and cost-effective, delivering real-time results.

Paperwork and processing

  • Traditional KYC: Requires physical document submission and involves a cumbersome paperwork process.
  • Video KYC: Eliminates paperwork, streamlining the verification process through digitization.

Customer onboarding

  • Traditional KYC: Customers must visit the company physically to submit identity documents, leading to delays in account opening.
  • Video KYC: Allows customers to register and onboard remotely, significantly improving convenience and efficiency.

Security and risk assessment

  • Traditional KYC: Faces potential security lapses and higher risk due to manual handling of sensitive customer data.
  • Video KYC: Provides a more secure process by leveraging advanced technology, ensuring better risk management.

Role of Verification in the Video KYC Journey

Enhancing the efficiency and security of customer onboarding with digital verification techniques:
Identity Verification: In the Video KYC procedure, consumers must provide legitimate government-issued IDs like Aadhaar or PAN cards, which are checked using sophisticated optical character recognition (OCR) technology to reduce fraud.

Identity Verification

 

In the Video KYC procedure, consumers must provide legitimate government-issued IDs like Aadhaar or PAN cards, which are checked using sophisticated optical character recognition (OCR) technology to reduce fraud.

Liveness Detection

 

Blink testing, facial tracking, and motion analysis are used to verify the customer’s presence during the Video KYC session to avoid identity theft and unauthorised access.

Geolocation Verification

 

It is used to comply with regulatory standards and provide easy onboarding for qualified consumers.

Secure Data Storage

 

As customer data is sensitive and requires stringent security measures, Video KYC service providers implement robust data encryption and secure storage solutions to protect against unauthorised access and data breaches.

Compliance with Regulations

 

Video KYC reduces the risk of non-compliance fines and maintains financial ecosystem confidence by automating the verification process.

AuthBridge excels in streamlining KYC processes for financial institutions by offering comprehensive Video KYC solution, leveraging advanced AI-driven verification and innovative liveness detection techniques. By employing geolocation validation and robust compliance management, AuthBridge ensures an optimised onboarding experience that adheres to regulatory standards, mitigates risks of fraud, and strengthens trust in the financial ecosystem.

Conclusion

The shift from traditional KYC to video KYC presents a promising future for banks, financial institutions, and businesses dealing with money. The benefits of this digital transformation are evident in its increased efficiency, reduced costs, enhanced security, and improved customer satisfaction. As technology continues to evolve, the scope of video KYC will likely expand further, incorporating even more advanced features to optimise the verification process. Thus, arising the need for a technology partner that offers KYC solutions for BFSI sector to make the verification and onboarding journey faster and smoother. Embracing video KYC’s potential not only streamlines the customer onboarding experience but also supports a thriving, secure, and compliant financial ecosystem, ultimately leading to a brighter and more progressive future for all stakeholders involved.

 

 

 

 

By Shivangi, ago
New Online Gaming Rules Meaning and Impact

New Online Gaming Rules: Meaning and Impact

The Ministry of Electronics and Information Technology (MEITY) introduced ‘new online gaming rules’ on 6th April 2023 suggesting amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 addressing key proposals like self-regulatory body(SRBs), mandatory know-your-customer norms, and a grievance redressal mechanism.


The government started with an initial framework to regulate Real Money Gaming (RMG), which has now evolved into a framework that can regulate the entire online gaming ecosystem for wagering and child addiction. The gaming industry hails the government’s bid to curb misinformation calling it the first step in the direction of recognition of the online gaming market in India. With a huge market potential in India, the framework will help startups/innovators in the gaming industry while prohibiting wagering or betting.

What is an online gaming intermediary?

An online game is one that “is offered on the internet and is accessible by a user through a computer resource. An “online gaming intermediary” means an intermediary that offers one or more than one online game.

What is a Self-regulatory Body (SRB)?

SRB is a non-government self-regulatory body created to facilitate a safer gaming experience.
An SRB will have gamers, child rights representatives and educators. These SRO will evolve to work on ways to allow or deny permissions based on the guidelines in order to prohibit wagering and stop child addiction. These SROs will also safeguard users against the risk of gaming addiction, financial loss and financial fraud.

What should a gaming company needs to do?

  • Ensure a robust KYC mechanism for all the players
  • Ensure registration with a self-regulatory body
  • Random number generator and no bot certificate for fair practices
  • Appointment of a compliance officer, nodal officer and a grievance officer
  • Inform the users of rules and regulations, privacy policy, refund and withdrawal policies
  • Clear terms of distribution of winnings and fees or other charges payable by the user

Impact of these new gaming rules

The introduced rules and regulations are bound to shape the future of the gaming industry in India. This change will be a boost for entrepreneurs and startups to reach their full potential. Here are the 5 things we can expect:

  • Recognition: The gaming sector will have its much-due recognition as a key industry with a huge market potential.
  • Consistency: With this move from the central government, the rules will clear the air around rules which earlier varied from state to state.
  • Fairplay: Installation of SROs in the framework will help companies abide by compliance around AML, player KYC, and reward distribution. 
  • Wagering: These rules will clearly set apart the games under the purview of wagering and will help differentiate between permissible games vs not permissible ones.

How is the industry responding to these rules?

Moneycontrol with Trivikraman Thampy (games 24*7)

 

  • These rules set apart legit games from untrustworthy ones for the customers.  
  • Illegal and harmful games, operated offshore/unrecognized will not get registered with SROs.
  • The self-regulatory model addresses the concern of recognition of the ‘games of skill’ by different state governments. 
  • This framework will help SRO regulate games for process compliance like player kyc, and no bots to ensure fair play & distribution of rewards.

Safer Gaming Experience with AuthBridge

AuthBridge welcomes the move from the centre and advocates the safety of players as well as businesses in online gaming. We continuously strive to bring trust and transparency to business transactions with the help of data and due diligence.
With our verification solution for online gaming suited for complex individual verification to business due diligence, we have helped a number of gaming clients stay compliant with the norms and offer a safer gaming experience.

Learn how Authbridge played a pivotal role in helping Dream11 grow its player base by 300% this season

 

Interested in learning how Authbridge can help your company achieve compliance and be future-ready? 

 

<Talk to an expert today>

By Shivangi, ago
iBridge 2.0 - The Next-Gen background verification Platform

iBridge 2.0 – The Next-Gen background verification Platform

iBridge 2.0 is a next-generation background check solution that offers a modern and pleasant  experience for users. Unlike other background check solutions, iBridge 2.0 is designed to be user-friendly and easy to navigate, with real-time checks that can help you get the information you need quickly and efficiently. It includes a gamut of advanced functionalities to make background verification seamless. 

Enhancements like verification TATs charts, real-time updates and customizable packages & reports, make it a top choice for HR Ops and CHROs for businesses of all sizes.

Need for a next-generation background verification

Hiring processes have transformed drastically in the recent past  The core objective BGV process is to ensure trust between the employer and the candidate. Speed and accuracy play a pivotal role in achieving operational efficacy while maintaining the sanctity of data, process compliance, and security. With real-life challenges like the misrepresentation of data, identity fraud, and document spoofing business demand much more stringent frameworks for screen & hire the right talent. 

Everything you need on a single platform

iBridge 2.0 offers an intuitive user interface with a ton of customization capabilities made to fit right into your BGV process. It keeps in mind all the needs of a hiring manager like, visibility, trackability and ease of use throughout the process. 

Here is a sneak-peak into what iBridge brings to the table:

Custom Screening Workflows

With diverse verification needs for different roles, we understand the need for a custom screening process. Going by the manual route becomes tedious while leaving scope for human errors. 

  • iBridge 2.0 enables the admin to configure custom workflow for different candidate groups.
  • Share with your team and use these preconfigured workflows to nudge the candidate into the appropriate verification flow.

Improved Trackability With a Holistic Dashboard

As an HR Op or as a CHRO, we understand how crucial it is to keep tabs on key business metrics. Here is how iBridge 2.0 dashboard provides the visibility and trackability you need:

  • Summary view of the cases by their progress status to keep track of the overall pipeline.
  • Tracking BGV completion is super easy, you can slice and dice the data weekly, or monthly to analyze cases completed, pending or in progress.
  • Activity feed gives you updates in real-time as and when an action is taken.
  • The severity chart helps you understand the information discrepancies with respect to the type of check conducted to generate red, amber or all-clear reports

 

Minimize Manual Efforts With Bulk Actions

While hiring at scale, it takes a lot of valuable time for the HR Ops to input all the necessary information for each candidate, and follow up with them individually. You wished that could have been avoided. Well, say no more…

  • Invite all your candidates to start their verification process with just a .csv file upload
  • Remind all the candidates if they are running behind the schedule with a click of a button.
  • Reviewing has never been easier, give sign-off for background checks with a single click.

Gauge Efficacy with Custom and Prebuild Reports

Measuring the success of background verification progress is often a major challenge for the CHROs. With limited information available to the team, figuring out key operational challenges and solving them becomes next to impossible. With iBridge, you can do it all

  • iBridge 2.0 offers you prebuilt report templates for your ease to look at key business metrics
  • It also offers you the complete flexibility to customize your report to fit your business needs
  • Two types of reports are offered as prebuilt templates on iBridge 2.0
    • BGV reports help you to understand the overall progress and slice the data based on a number of parameters like; check-wise, Work in progress or Cost of approvals
    • Operational reports help you look at operational challenges like pending forms, login expired and pending sign-offs and solve for them

Going above and beyond with advanced BGV checks

iBridge 2.0 stands apart from the competition with its advanced verification capabilities to become a truly comprehensive background check solution. 

  • Conduct real-time and TAT-based checks right from one platform.
  • Be remote-ready, with digital address verification with geotagging.
  • Stay fraud free with features like liveness detection, OCR and face-match against proof of identity.
  • Conduct real-time checks against the government and proprietary databases for speed.

Modern UI with Integration Options

Improving user experience has been a central objective of the evolution of iBridge 2.0. It has been designed keeping in mind the needs of its users. It offers an intuitive interface with ease of navigation to get things done.

  • To offer a seamless experience across devices, iBridge 2.0 is device agnostic by default.
  • Flexibility to switch sections for candidates along with a progress tracker visible all the time.
  • FAQs and self-help guide be there if you may need assistance anytime on the platform
  • iBridge 2.0  is seamlessly integrated with top HRMS like Darwinbox, Zoho, and ZingHR along with Open API-based Integration options.
By Shivangi, ago
Everything you need to know about e-KYC

Everything you need to know about e-KYC

Gone are the days when customer identification and verification used to happen through physical documentation, such as a passport or driving license. The offline process not only used to be time-consuming but also prone to errors.

 

As soon as FinTech innovation gained global traction, the expectations of seamless digital experiences skyrocketed and the shift got reflected in financial services and beyond. eKYC solutions emerged as a way to streamline and automate the customer verification process for financial institutions and other regulated entities, using technologies such as biometric authentication, facial recognition, and AI-based algorithms.

 

What is eKYC?

e-KYC, also known as Electronic Know Your Customer, is a digital process of verifying the identity of an individual or an organization remotely. It is a paperless process that eliminates the need for physical documents and face-to-face interaction between the customer and the service provider.

 

eKYC has become increasingly popular due to its speed, efficiency, and accuracy. It has also enabled financial institutions to onboard new customers faster and more cost-effectively, while still maintaining compliance with regulatory requirements.

 

The e-KYC process involves the use of electronic documents and digital signatures to verify the identity of the customer. The customer is required to provide their details such as name, address, date of birth, and other relevant information to the service provider. The service provider then verifies the customer’s details using various electronic databases and verification tools.

 

The e-KYC process typically involves the following steps:

 

  • The customer provides their details and other relevant information through a digital platform or mobile application.
  • The identity of the customer is verified by comparing the provided information with various electronic databases and verification tools.
  • Once the identity is approved, a digital identity certificate or other relevant documents is issued to the customer.

 

e-KYC process is fast, efficient, and commonly used in various industries such as banking, telecommunications, and insurance, to comply with regulatory requirements and ensure the security of customer data.

 

Importance of e-KYC

 

  • Time and cost-saving: e-KYC eliminates the need for physical documents, which means it saves time and reduces the cost associated with paper-based KYC processes. There is no need for physical visits to customer service centers, which is a significant advantage for customers who are located in remote areas.

 

  • Enhanced customer experience: With e-KYC, customers can complete the verification process from the comfort of their homes or offices. Also, the process is quicker and more convenient, leading to enhanced customer experience and increased customer satisfaction.

 

  • Increased security: e-KYC uses advanced technology such as biometrics and digital signatures to verify the identity of individuals or businesses, which makes the process more secure than traditional paper-based KYC processes, also reducing the risk of identity theft and fraud.

 

  • Regulatory compliance: e-KYC helps businesses comply with regulations related to customer due diligence, anti-money laundering (AML), and counter-terrorism financing (CTF). It also helps businesses to monitor and manage risks associated with their customers and their transactions.

 

Different Types of e-KYC

There are multiple methods to avail of e-KYC. These are as follows:

 

For OTP-based eKYC, customers are required to first register their mobile number. This e-KYC process is initiated online using the one-time password (OTP) sent to the mobile number linked to the Aadhaar card of the customer. Customers are required to click on the ‘Generate OTP’ option and enter the OTP to authenticate their identity and complete the e-KYC process.

 

  • Online e-KYC Aadhaar Biometric Authentication

Another way to conduct eKYC is via Aadhaar biometric verification which is done electronically using customer biometrics. In this authentication, a picture of the customer’s fingerprints and retina is taken through a scanner and sent to UIDAI to match the biometric readings kept with the customer’s Aadhaar number. Once the information is validated, UIDAI sends the customer’s identifying information to the verification service provider safely for further verification.

 

  • Offline Aadhaar Paperless e-KYC via XML or QR Code

The offline Aadhaar e-KYC process involves the sharing of identity data via XML or QR code. 

 

  • Aadhar XML

Customers can share the Aadhaar offline XML document with the financial institution by downloading it from the UIDAI website. For this, customers must first complete the offline eKYC form and save the XML file from UIDAI. 

 

The report is encrypted and does not disclose sensitive information that is not pertinent to the KYC verification agency

  • QR Code

Alternatively, customers can also share the QR code available on their Aadhaar card that can be scanned to assess the required information.

 

Eligibility Criteria for e-KYC

These are general eligibility criteria and specific requirements that may vary depending on the country, regulatory norms, and the business conducting the e-KYC process. However, some common eligibility criteria for e-KYC include:

 

  • The customer should have a valid mobile number linked to their Aadhaar or other government-issued identification document.
  • The customer’s identification document should be in a machine-readable format, such as a QR code or barcode, to enable the scanning of the document through the e-KYC application.
  • The customer’s identification document should be issued by a government agency and should be valid and not expired.
  • The customer should be physically present in the country where the e-KYC process is being conducted.
  • The customer should consent to the collection, storage, and use of their personal information for the e-KYC process.

 

Also Read: Types of KYC | Process, Documents, and APIs

 

Documents Required for e-KYC

e-KYC refers to the digital verification of data that is already accessible in the Aadhaar database. Therefore, customers are not required to provide additional documents along with their application form. However, in the case of online e-KYC biometric verification, you may have to submit your passport-sized photographs while authenticating your biometrics.

 

KYC Solutions with AuthBridge

AuthBridge, being an authorized Authentication User Agency (AUA) with UIDAI, offers reliable KYC solutions through advanced APIs. With the help of our tech-enabled platforms and authentic data, we enable the industry’s fastest onboarding and verification in real time. We provide both conventional and cutting-edge KYC solutions i.e. Digital KYC and Video KYC, assisting businesses in rapidly and easily onboarding consumers while reducing risks.

 

Key benefits of using APIs and KYC solutions

  • Background Verification without human intervention
  • Real-time results
  • Saves money, time, and effort
  • No risks of errors that stem from manual entries which also helps avoid legal
  • Complications
  • Complaint and secure

 

Also read: Smart and Intelligent KYC Solutions: The Need of the Hour for Employers 

 

For more information, contact us at sales@authbridge.com

By Shivangi, ago
Blue Collar Vs White Collar Employees - How Background Verification Differs

Blue Collar Vs White Collar Employees – How Background Verification Differs

Blue-collar and White-collar are terms used to differentiate between two different types of employees based on the nature of their work, acquired skills, educational backgrounds, and the type of work environment they typically operate in.

Blue-Collar, White-Collar Workers: Historical Background And Evolution

The terms “blue-collar” and “white-collar” originated in the early 20th century, reflecting the common shirt colours worn by manual workers and office workers, respectively. Historically, blue-collar jobs were associated with physical labour in industries such as manufacturing, construction, and mining. In contrast, white-collar workers typically held positions in settings like corporate offices, involving administrative or managerial tasks. Over the decades, these roles have evolved with changes in technology and the economy, leading to a blur in the traditional distinctions between these sectors.

Who Are White-Collar Employees?

White-collar employees typically work in office settings and perform tasks that require cognitive and analytical skills, such as accountants, lawyers, managers, engineers, and other professionals.

They have college degrees or specific certifications that may have specialized training in their field of expertise. They are often salaried employees and work in a corporate setting. 

How Much Do White-Collar Workers Earn?

Average Global White Collar Worker Salaries

Globally, the average salary for white-collar employees can vary significantly depending on the country, industry, and experience level. In developed countries, white-collar workers often earn higher salaries than those in developing nations. For instance, in the United States, white-collar professionals such as software engineers, managers, and executives can earn significantly higher than the average national income. In contrast, in many European countries, while the earnings might be lower than in the U.S., comprehensive social security and benefits might supplement these salaries.

Average Indian White Collar Worker Salaries

The average salary for white-collar jobs varies widely by sector and experience in India. As of 2023, the average monthly salary in India is approximately ₹31,900 (about $387). This figure can be higher in sectors like IT, finance, and management, where skilled professionals might earn substantially more. Conversely, entry-level positions in administrative roles or customer service might earn closer to the average or below.

For specific roles in India, such as IT professionals or corporate managers, salaries can range from ₹2,97,150 and more annually, depending on the exact nature of the job and the company’s scale. These figures reflect a broad spectrum of white-collar occupations, highlighting the diversity in earnings based on role, industry, and geographic location within India.

Talk to sales - AuthBridge

Who Are Blue-Collar Employees?

Blue-collar employees, on the other hand, typically work in jobs that involve manual tasks or physical work, such as suppliers, drivers, construction workers, mechanics, electricians, factory workers, and other industrial workers. 

These employees usually have vocational or technical training, and their work often involves working with tools, equipment, and machinery. They are often paid hourly wages and may be employed on a temporary or seasonal basis.

How Much Do Blue-Collar Workers Earn?

Average Global Blue Collar Worker Salaries

Globally, the average salary for blue-collar workers varies widely based on the country, industry, and specific occupation. For example, in the United States, the average hourly wage for blue-collar workers as of early 2024 is approximately $25.69, with wages ranging significantly based on specific sectors and regions. In countries like China, the average monthly salary of blue-collar workers in various sectors in 2022 was about 6,078 yuan (approximately $880), reflecting different economic scales and labour market conditions.

Average Indian Blue Collar Worker Salaries

In India, the average salary for blue-collar workers also varies by industry and location but is generally lower compared to Western countries due to different economic conditions. As of 2023, the average blue-collar worker in India earns around ₹3,45,729 annually (approximately $4,200). This figure can differ significantly based on the city and sector. For instance, in Mumbai, the average annual salary for a blue-collar worker is slightly higher at about ₹3,73,663 (approximately $4,536). These salaries reflect the vast disparities in wages across different regions and industries within India.

Infographic: Blue-Collar vs. White-Collar Worker Comparison

Comparison between white Collar and blue-collar employees

However, work responsibilities and skills are not always strictly defined and there may be some overlap between the two categories. Some jobs may require both manual labour and cognitive skills, and some employees may transition from blue-collar to white-collar jobs or vice versa throughout their careers.

Blue-Collar Vs. White-Collar Worker Background Verification

The checks conducted in the background verification process for blue-collar and white-collar employees may differ based on the nature of work, the level of trust, and the responsibility involved in the job.

  1. Nature of Work: Blue-collar jobs are more physical and may be more directly involved in the creation or maintenance of physical products. White-collar jobs are more likely to involve mental or intellectual labour, focusing on planning, administration, or management.

  2. Compensation: Blue-collar workers typically earn wages based on hours worked or tasks completed, while white-collar workers usually receive a fixed salary, often with potential bonuses and benefits.

  3. Educational Requirements: Blue-collar positions might require specific trade certifications or apprenticeships, whereas white-collar jobs often require a university degree or extensive training in a particular field.

  4. Work Environment: The work setting also differs significantly; blue-collar workers might find themselves in more industrial, outdoor, or labour-intensive environments, whereas white-collar workers typically work in office settings.

The checks conducted in the background verification process for blue-collar and white-collar employees may differ based on the nature of work, the level of trust, and the responsibility involved in the job.

Blue-Collar Employees Background Verification 

For blue-collar employees, the background verification process may focus on verifying their work experience, vocational training, and technical skills. This may involve checking references, verifying previous employment, and conducting criminal background checks.

Blue-collar background verification is important to  

  • hire the right employees with the necessary skills, experience, and qualifications for the job
  • identify any criminal or legal issues that may impact your business safety and reputation
  • verify work history and any licenses or certifications they may hold

Key Checks for Blue-Collar Employee Screening

  • Identity Checks: Identity verification through validation of NIDs to ensure that the person claiming to be a particular individual is that person.
  • Address Checks: Address verification of blue-collar employees to deter fraud and risks by confirming the existence of a given address.
  • Criminal Record Checks: Conduct a thorough criminal verification to learn if the candidate was accused of a crime or was involved in another manner like as a witness/victim.

Overall, conducting background verification for blue-collar workers can help ensure that employers are making informed hiring decisions and creating a safe and productive work environment for all employees.

White Collar Employees Background Verification

The background verification process for white-collar employees includes a thorough review of the employee’s educational qualifications, work experience, and professional licenses or certifications. This may also include checking credit history, conducting criminal background checks, and verifying references. 

Depending on the seniority level of the position, employers may conduct detailed checks into the personal and professional aspects as higher levels of stakes and responsibilities are involved.

White-collar background verification is important to

  • track and prevent dual employment/employee moonlighting
  • know the criminal records of employees for workplace safety
  • identify fake or misleading CVs, educational degrees, and professional certifications
  • validate employment history, uncover employment gaps, and probationary fails
  • prevent reputational risks and reduce the company’s liability

Key Checks for White Collar Employee Screening

  • Identity Checks: Identity verification through validation of NIDs to ensure that the person claiming to be a particular individual is that person.
  • Address Checks: The Address verification of blue-collar employees to deter fraud and risks by confirming the existence of a given address.
  • Court Record Checks: Criminal/court records checks to learn if the candidate was accused of a crime or was involved in another manner like as a witness/victim.
  • Education Check: Validation of documentary evidence of an employee’s educational qualification.
  • Reference Check: Validation of a candidate’s integrity and competence through primary sources.
  • Employment Checks: The Employment checks include Screening the past employment and work experience claimed by a candidate to ensure quality hiring
  • Drug Abuse Test: Drug and substance abuse test as per business needs and drug screening policy

However, the specific details of the background verification process will vary based on the industry, company policies, and the level of risk associated with the job duties.

Blue Collar And White Collar Employees BGV Solution By AuthBridge

AuthBridge’s robust background verification solution powers your white-collar and blue-collar screening process with real-time verification capabilities. By leveraging database-driven checks, businesses can conduct thousands of verifications in minutes and yield accurate results 10X faster. 

AspectBlue-Collar WorkersWhite-Collar Workers
DefinitionWorkers involved in manual labor, including skilled trades, construction, manufacturing.Workers engaged in professional, administrative, or managerial roles, usually office-based.
Work EnvironmentIndustrial settings, construction sites, factories, or outdoors.Office environments, corporate settings, or remote work setups.
Education and TrainingSpecific skills or trade certifications, apprenticeships, or on-the-job training.College degrees or advanced training in fields such as business, finance, law, or technology.
CompensationGenerally paid hourly or per task completed, with opportunities for overtime pay.Typically salaried with potential bonuses and benefits packages.
Social PerceptionTraditionally viewed as lower-status, but this perception is evolving.Generally seen as prestigious, associated with higher status and education.
Role in EconomyContribute to production, maintenance, and manufacturing sectors.Contribute to service industries, management, innovation, and strategic planning.
Job SecurityCan be impacted by economic fluctuations or seasonal work.Tends to have more stability, but also faces risks from market saturation or layoffs.
AttireWork uniforms, overalls, or attire suited for manual labor.Suits, ties, business casual, or attire appropriate for an office environment.
Technological InfluenceRequires technical skills for operating machinery and adapting to new technology.Increased reliance on digital tools, data analysis, and remote collaboration platforms.
Professional EvolutionBlue-collar roles are diversifying with technological advancements and industry needs.White-collar jobs are adapting to digital transformation, remote work, and tech innovation.

Why Should You Conduct Your BGV With AuthBridge?

  • Bulk background checks in minutes
  • Customizable and integrable solution
  • Quick, scalable, and seamless verification and onboarding journeys
  • Proprietary databases and domain expertise

With AuthBridge, identity checks and online criminal record checks can be performed in real-time but other checks like Police Verification and Education verification might take some time as there is a dependency on the Government and other agencies for information.

About AuthBridge

With over 18 years of experience in the industry, AuthBridge has been at the forefront of creating databases, and building algorithms to enable instant searches to perform background checks without compromising on data security. AuthBridge is trusted by over 2,000 clients in 140 countries for their background check needs. Our database contains over 1 billion proprietary data records for conducting background checks. AuthBridge conducts an impressive volume of 15 million background checks every month.

FAQs On Blue-Collar & White-Collar Workers

Blue collar workers typically perform manual labor, often in industries like manufacturing, construction, and maintenance. White collar workers usually perform desk jobs or administrative tasks in sectors such as finance, IT, healthcare, and management.

Background verification is essential to ensure the authenticity and reliability of an individual’s identity, work history, and qualifications. It helps in mitigating risks, ensuring safety, and building trust in the workplace.

Common background checks include identity verification, criminal record checks, employment history verification, educational qualification checks, and in some cases, health and drug tests (more common for blue collar) and credit history checks (more common for white collar).

The process for blue collar workers often focuses on criminal records, identity verification, and employment history. For white collar workers, it may include more detailed checks on educational qualifications, professional licenses, and credit history.

Required documents typically include identity proof (Aadhaar Card, Passport, Voter ID), address proof (Utility Bill, Rental Agreement), educational certificates, employment history documents (Experience Letters, Pay Slips), and in some cases, credit reports and professional licenses.

The duration can vary but typically takes between one day to a few weeks, depending on the complexity of the checks and the responsiveness of the sources being verified.

Yes, employers can opt for expedited services, which may involve additional costs but ensure faster processing of the verification checks.

Challenges include verifying employment history in unorganized sectors, inconsistent documentation, delays in responses from previous employers or educational institutions, and ensuring accuracy in credit and financial history checks.

If discrepancies are found, the employer typically reviews the findings and may discuss them with the candidate. Depending on the nature and severity of the discrepancies, the employer may decide to proceed with caution, provide an opportunity for clarification, or terminate the hiring process.

Some blue-collar jobs, especially those involving safety-sensitive roles (e.g., operating heavy machinery) or driving, might require pre-employment drug testing.

The impact of a criminal record on a blue-collar job depends on the nature of the crime and the job requirements. Some companies might be more lenient for certain offenses, while others might have strict policies.

Emerging trends include using social media verification to assess online presence and professional reputation. Additionally, there’s a growing focus on verifying soft skills and cultural fit through assessments or reference checks.

By Shivangi, ago
How do companies do background checks in India

How Do Companies Do Background Checks In India?

The importance of employee background checks for making informed hiring decisions is a force to be reckoned with. Background checks help employers verify the credentials, education, and work experience of the candidates, safeguard a business from fraud practices, and ensure that the onboarded candidates possess the required skills and qualifications for the job. 

Employers can screen the candidate’s profile from all aspects from education to employment to a criminal history check to avoid getting into legal trouble and ensure that the workplace is free from any risks or hazards.

Companies That Conduct A Comprehensive Background Check Reap The Following Benefits:

  • Good company reputation: Employees with a criminal history or a questionable work history could negatively impact the company’s reputation, leading to loss of business as well as brand image.
  • Enhanced employee retention: A thorough background check can help employers identify candidates who are more likely to remain with the company for a longer time, reducing the cost and time associated with recruitment and training.
  • Maintain compliance: Some businesses have specific regulations regarding employee background checks. Employers must comply with these regulations to avoid legal penalties and fines.

How Do Companies Do Background Checks In India?

Screening candidates has become much easier than it was before, all thanks to the digitization of public data i.e. NIDs, driver’s licences, and negative and proprietary databases for court record checks and criminal history. It typically takes 2 to 5 working days to complete the background verification. However, the time may vary depending on what level an organization wants to dig into the candidate’s background (mostly done for leadership positions). 

The checks are mostly conducted once a candidate clears all the rounds of the interview. The process starts with identity checks followed by employment checks by calling your last employer. Then, companies look into public databases (criminal records) for any illegal activity. Next, they dig education records to verify your degrees and certificates.

The Following Are Some Common Steps Involved In A Typical Background Check Process In India:

  • Identity verification: The first step in a background check is verifying the candidate’s identity through their government-issued ID card, such as a passport, driving licence, or Aadhaar card.
  • Education verification: The company may verify the educational qualifications of the candidate by checking with the university or board that issued the certificate or degree.
  • Employment verification: The employment history of the potential candidates is validated by contacting the HR department of their previous employers to confirm their job titles, responsibilities, and work duration.
  • Criminal record check: The company may conduct a criminal record check by checking criminal records with the negative and criminal record proprietary databases.
  • Reference check: The company may also conduct a reference check by contacting the candidate’s previous supervisors or colleagues to verify their work performance, behaviour, and character.
  • Address verification: The company may verify the candidate’s current and previous addresses to ensure they are accurate.
  • Credit history check: Companies can conduct credit history checks to validate a candidate’s hold on important aspects like money management, signs of financial distress, records of repayment of loans, etc.

In India, there is no one-size-fits-all approach when it comes to background verification. Different companies conduct background verification in different ways. 

Big private and mid-sized companies partner with leading third-party background verification companies in India like AuthBridge to do the checks mentioned above. Then there are small enterprises that prefer to have an in-house HR team do all the work. Government firms or PSUs run an extensive background verification process before offering the job.

Industries That Are Most Suitable For Background Checks In India

  • White-collar industries (Financial services, accounting, IT, and much more)
  • Blue-collar industries (Logistics, Large-scale manufacturing, Construction, Energy & utilities)
  • Government services
  • Educational institutes
  • Workplaces involving “special care” people (for instance, children, specially-abled people)
  • Any profile that requires a special licence
Industries where BGV checks are must

The process and extent of the background check may vary depending on the company’s policies, the level of the position, and the industry. No matter, if it is a small company or a big private firm, having a robust background verification framework in place, helps stakeholders to make quality hiring decisions as well as stay time-efficient and productive. 

Employee Background Verification With AuthBridge

Comprehensive and seamless background verification can enable a long-term relationship with the new hires and provide a welcoming and safe workplace. 

AuthBridge emerges as a strong third-party enabler to help HR teams get data-driven insights into candidate history and automate background verification journeys so that they can focus on personalization during and before onboarding and offer human connections where desirable. With robust verification and onboarding solutions, organizations can get better transparency and trust to retain great talent.

FAQs around Background Checks In India

A background check is a process used by companies to verify an individual’s identity, employment history, educational qualifications, criminal records, and other relevant details to ensure the person’s credibility and suitability for a job.

Companies conduct background checks to ensure they hire trustworthy and qualified individuals, mitigate risks, comply with regulatory requirements, and maintain a safe and secure workplace environment.

Common background checks include identity verification, employment history verification, educational qualification verification, criminal record checks, address verification, credit history checks, and reference checks.

Companies verify an individual’s identity by checking government-issued documents such as Aadhaar Card, Passport, Voter ID, and Driver’s License to ensure the individual’s identity is genuine.

Companies verify educational qualifications by contacting educational institutions to confirm the authenticity of degrees, certificates, and other academic achievements listed by the candidate. This ensures that the candidate possesses the claimed educational background.

A criminal record check involves searching national and local databases to identify any criminal convictions, pending charges, or legal issues associated with the candidate. Companies often work with law enforcement agencies or third-party verification services to conduct these checks.

Companies verify a candidate’s address by checking utility bills, rental agreements, and conducting physical verification visits to the provided address. This ensures the candidate’s residential details are accurate.

If discrepancies are found, the employer reviews the findings and may discuss them with the candidate. Depending on the nature and severity of the discrepancies, the employer may decide to proceed with caution, provide an opportunity for clarification, or terminate the hiring process.

Yes, it is legal for companies to conduct background checks in India, provided they obtain the candidate’s consent and adhere to relevant data protection laws and regulations.

Background checks benefit employers by reducing the risk of hiring unqualified or fraudulent candidates, ensuring workplace safety, protecting company reputation, and complying with legal and regulatory requirements.

By Shivangi, ago
What is background check, meaning and definition

What is background check, meaning and definition?

‘Shortlisting suitable candidates out of the lot is a strenuous task. Some profiles fit best into the positions. While some appear promising, some seem suspicious. Jumping into a conclusion while choosing candidates on their face value is not a right approach as they might be misleading. A comprehensive background check of a candidate based on employment history, educational checks, and criminal records can keep your workplace safe.’

What is background check?

Background check is a process that companies conduct during the hiring process to authenticate the information provided by the candidate for right onboarding. Background verification involves multiple checks to validate past employment history, education records, employer details, identity checks, address checks, and much more. The background check usually starts as soon as the candidate clears all the rounds of the interview. 

Background check – The emerging hiring trend! 

Background check is one of the top hiring trends to stay relevant in the market and meet compliance and data security regulations. With the changing work environment and new data protection laws to prevent identity frauds, companies cannot afford even a minor discrepancy in the resume. One wrong candidate and your reputation earned over years go for a toss.

Top reasons to conduct employee background check

  • To Prevent Dual Employment/Employee Moonlighting: Employee moonlighting and the concerns around it i.e. data privacy, confidentiality breaches, productivity loss, etc. came to the fore especially after Covid-19 pandemic when employees started working from home, and a majority of them adopted a hybrid model later. Moonlighting cases put ethical obligations and commitment of employees under the scanner. It is becoming common to work parallelly with multiple companies, hide side gigs and facts when examined.

Shocking moonlighting instances have made companies to have strict background checks in place to track if their candidates are involved in multiple employments and assert a degree of control with revised policies.

  • To Reveal a Criminal Record: Imagine you get to know the criminal records of your employees after all the hiring process is done! Onboarding candidates with a dark criminal history behind them can pose a serious threat for your company. Moreover, you cannot risk your existing employees and work atmosphere for it. It will only compromise your workplace safety and brand equity.

AuthBridge’s industry’s largest negative and proprietary databases enables companies to conduct criminal record checks nationwide, across state, city, county, etc. to find out if there is any criminal history associated with the prospective hires.

  • To Identify Fake CVs & Degrees: The rat race to grab the best role is increasing among the candidates and so are the CV frauds. Fake references, false certifications, claims, degrees and misrepresentations about employment/education are some examples. For instance, a candidate who has done a one week certification from a premier institute might boast the same in the resume without mentioning the tenure. It will be misleading for a hiring leader whether it is a one week certification and a full-time one year programme. 

Hiring employees based on falsified information can create problems for the employer as they won’t be able to perform their duties or aren’t qualified to do so. Conducting background checks can help you gather the accurate information, spot CV frauds, and establish safety at the workplace.  

  • To Validate Employment History: Does the candidate actually have the work experience he/she claims to have? Sometimes to cover employment gaps, candidates misrepresent which years they have worked at previous organizations. It is very common to list more months to not showcase probationary fails or unemployed periods. Remember  – the more high-level position, the more extensive the background check process should be.
  • To Protect Against Reputational Risks: No company wants to be in the spotlight for a bad reputation. Loss of revenue, damage to brand value, and regulatory penalties are serious matters for any business. All these factors eventually lead to reputational risks. Everybody should work in tandem and take the right measures from the start to mitigate reputational risks. This usually starts when the best of talent is hired for both – crucial and regular business functions.
  • To Reduce Company’s Liability: Avoid unnecessary lawsuits and lower insurance costs by hiring people who get a green signal in background screening. The main reasons why organizations conduct background verification is to identify red flags in education, past employment, and criminal records of the applicants. A good hire can help you reap good profits in the future.

Candidate’s background check ensures that the applicant is suitable for hiring or not and based on that can make a final decision.

Top industries where background checks are mandatory

Due to increasing discrepancies in information in job applications, companies should run a background check on employees before onboarding them. The major employment sectors such as IT, healthcare, finance, automobile and others do mandatory background checks to filter out fraud applicants.

 

However, sectors like retail, restaurants and other organizations are less strict about background verification in India, mostly for entry-level positions. Irrespective of the sector, every company must have a strict background verification process in place of candidates to save time and money, avoid negligent hiring lawsuits, and detect criminal records.

How does background checks change from entry level hires to mid/senior level?

When going from entry level to senior level, the verification also goes beyond the regular background checks for in-depth investigation. From keeping tabs on social media activities to unfolding criminal records/affiliations, and much more, companies go an extra mile for leadership hiring and stay compliant to various global AML and other regulatory standards like FCPA, UK Bribery Act, Prevention of Money Laundering Act among others.

Further, it is not just seniors, but even juniors who worked under them are part of the background check interviews conducted before an individual is hired at senior level.

What is the process for background checks and how is it done?

Background check process involves various checks to validate education records, past employer details, identity checks, resume checks and address checks. At AuthBridge, we power your background verification process with real-time verification capabilities. Our AI-powered technology and proprietary database help you conduct thousands of verifications in minutes and ensure industry fastest turnaround time.

Our top USPs of background checks process

  • Proprietary databases
  • Domain expertise
  • Customisable and integrable
  • Fast and secure
  • Industry specific  

How much time does it take for background checks?

There is no specific turnaround time but mostly it can range from one week to one month to carry out the process. The process varies from one employer to another, and other factors such as how much information is available of the new hires. It might take a longer time if the employer is looking for more in depth information. 

With AuthBridge, identity checks and online criminal record checks can be performed in real-time or near-real time. Other checks like Police Verification and Education verification might take some time as there is a dependency on the Government and other agencies for information.

How AuthBridge helps you automate background checks?

‘Shortlisting suitable candidates out of the lot is a strenuous task. Some profiles fit best into the positions. While some appear promising, some seem suspicious. Jumping into a conclusion while choosing candidates on their face value is not a right approach as they might be misleading. A comprehensive background check of a candidate based on employment history, educational checks, and criminal records can keep your workplace safe.’

What is background check?

Background check is a process that companies conduct during the hiring process to authenticate the information provided by the candidate for right onboarding. Background verification involves multiple checks to validate past employment history, education records, employer details, identity checks, address checks, and much more. The background check usually starts as soon as the candidate clears all the rounds of the interview. 

Background check – The emerging hiring trend! 

Background check is one of the top hiring trends to stay relevant in the market and meet compliance and data security regulations. With the changing work environment and new data protection laws to prevent identity frauds, companies cannot afford even a minor discrepancy in the resume. One wrong candidate and your reputation earned over years go for a toss.

Top reasons to conduct employee background check

  • To Prevent Dual Employment/Employee Moonlighting: Employee moonlighting and the concerns around it i.e. data privacy, confidentiality breaches, productivity loss, etc. came to the fore especially after Covid-19 pandemic when employees started working from home, and a majority of them adopted a hybrid model later. Moonlighting cases put ethical obligations and commitment of employees under the scanner. It is becoming common to work parallelly with multiple companies, hide side gigs and facts when examined.

Shocking moonlighting instances have made companies to have strict background checks in place to track if their candidates are involved in multiple employments and assert a degree of control with revised policies.

  • To Reveal a Criminal Record: Imagine you get to know the criminal records of your employees after all the hiring process is done! Onboarding candidates with a dark criminal history behind them can pose a serious threat for your company. Moreover, you cannot risk your existing employees and work atmosphere for it. It will only compromise your workplace safety and brand equity.

AuthBridge’s industry’s largest negative and proprietary databases enables companies to conduct criminal record checks nationwide, across state, city, county, etc. to find out if there is any criminal history associated with the prospective hires.

  • To Identify Fake CVs & Degrees: The rat race to grab the best role is increasing among the candidates and so are the CV frauds. Fake references, false certifications, claims, degrees and misrepresentations about employment/education are some examples. For instance, a candidate who has done a one week certification from a premier institute might boast the same in the resume without mentioning the tenure. It will be misleading for a hiring leader whether it is a one week certification and a full-time one year programme. 

Hiring employees based on falsified information can create problems for the employer as they won’t be able to perform their duties or aren’t qualified to do so. Conducting background checks can help you gather the accurate information, spot CV frauds, and establish safety at the workplace.  

  • To Validate Employment History: Does the candidate actually have the work experience he/she claims to have? Sometimes to cover employment gaps, candidates misrepresent which years they have worked at previous organizations. It is very common to list more months to not showcase probationary fails or unemployed periods. Remember  – the more high-level position, the more extensive the background check process should be.
  • To Protect Against Reputational Risks: No company wants to be in the spotlight for a bad reputation. Loss of revenue, damage to brand value, and regulatory penalties are serious matters for any business. All these factors eventually lead to reputational risks. Everybody should work in tandem and take the right measures from the start to mitigate reputational risks. This usually starts when the best of talent is hired for both – crucial and regular business functions.
  • To Reduce Company’s Liability: Avoid unnecessary lawsuits and lower insurance costs by hiring people who get a green signal in background screening. The main reasons why organizations conduct background verification is to identify red flags in education, past employment, and criminal records of the applicants. A good hire can help you reap good profits in the future.

Candidate’s background check ensures that the applicant is suitable for hiring or not and based on that can make a final decision.

Top industries where background checks are mandatory

Due to increasing discrepancies in information in job applications, companies should run a background check on employees before onboarding them. The major employment sectors such as IT, healthcare, finance, automobile and others do mandatory background checks to filter out fraud applicants.

However, sectors like retail, restaurants and other organizations are less strict about background verification in India, mostly for entry-level positions. Irrespective of the sector, every company must have a strict background verification process in place of candidates to save time and money, avoid negligent hiring lawsuits, and detect criminal records.

How does background checks change from entry level hires to mid/senior level?

When going from entry level to senior level, the verification also goes beyond the regular background checks for in-depth investigation. From keeping tabs on social media activities to unfolding criminal records/affiliations, and much more, companies go an extra mile for leadership hiring and stay compliant to various global AML and other regulatory standards like FCPA, UK Bribery Act, Prevention of Money Laundering Act among others.

Further, it is not just seniors, but even juniors who worked under them are part of the background check interviews conducted before an individual is hired at senior level.

What is the process for background checks and how is it done?

Background check process involves various checks to validate education records, past employer details, identity checks, resume checks and address checks. At AuthBridge, we power your background verification process with real-time verification capabilities. Our AI-powered technology and proprietary database help you conduct thousands of verifications in minutes and ensure industry fastest turnaround time.

Our top USPs of background checks process

  • Proprietary databases
  • Domain expertise
  • Customisable and integrable
  • Fast and secure
  • Industry specific  

How much time does it take for background checks?

There is no specific turnaround time but mostly it can range from one week to one month to carry out the process. The process varies from one employer to another, and other factors such as how much information is available of the new hires. It might take a longer time if the employer is looking for more in depth information. 

With AuthBridge, identity checks and online criminal record checks can be performed in real-time or near-real time. Other checks like Police Verification and Education verification might take some time as there is a dependency on the Government and other agencies for information.

How AuthBridge helps you automate background checks?

Our AI-enabled solutions are focused on Employment, Education, Address, Criminal & Identity checks to verify and onboard employees instantly. With the help of iBRIDGE- our one-stop candidate onboarding, the entire hiring process can be automated (employee BGV, document collection, digital document signing & seamless onboarding). Below mentioned are some of the top benefits of iBRIDGE.

  • Tailor-made client-end processes to suit specific needs with quick TAT for fast decisions
  • Access to the largest corporate, legal, financial, negative public, and proprietary databases
  • One-click initiation of a new request/new candidate
  • Real-time visibility of the document/data collection process
  • Intuitive application with relevant document collection
  • Customizable alerts & notifications as per client request
  • Easily integrable with any HRMS/ATS via APIs

 

AuthBridge is India’s leading Background Verification (BGV) Company. Write to us at sales@authbridge.com or visit contact us page for more information.

By Shivangi, ago
KYC and Proof of Identity Navigating Compliance in India

KYC and Proof of Identity: Navigating Compliance in India

With digital transactions increasing in India, businesses must prioritize KYC compliance to verify their customer’s identities and prevent financial crime. One crucial aspect of KYC compliance is proof of identity (POI), which involves obtaining valid documents from customers to confirm their identity.

 

This article explains why POI is crucial for KYC compliance and provides insights into accepted POI documents, best practices for verifying POI, the impact of digital identity verification on KYC, and the future of POI in KYC.

Why Proof of Identity is Crucial for KYC

POI is a critical component of KYC compliance as it helps businesses to verify the identity of their customers and prevent financial crime. Financial institutions, in particular, are required to comply with KYC regulations to prevent money laundering and terrorist financing. The Reserve Bank of India (RBI) has issued guidelines on KYC that require banks to conduct customer identification procedures and obtain valid POI documents.

 

POI also plays an important role in preventing identity theft. Fraudsters make illegitimate use of stolen IDs and use them to open bank accounts, apply for credit cards, and conduct other financial transactions. By requiring POI, financial institutions can help prevent identity theft by ensuring that the person conducting the transaction is the legitimate owner of the identity they are using.

Types of Proof of Identity Documents Verification Accepted in KYC

In India, several documents are accepted as POI for KYC compliance. Businesses must verify the authenticity of these documents, which may include checking for security features unique to the document and conducting electronic verification services. Find the list of acceptable POI verification methods mentioned below:

 

Other documents that may be accepted as POI include:

  • Ration card
  • Senior citizen card
  • Disability ID card
  • Freedom fighter card
  • Kisan passbook
  • CGHS/ECHS card
  • Bank passbook with photograph

 

When accepting POI documents, financial institutions must be diligent in verifying their authenticity. This may include checking for watermarks, holograms, or other security features that are unique to the document. Electronic verification services must also be utilised to check the document’s validity and ensure that it has not been tampered with.

Best Practices for Verifying Proof of Identity in KYC

To ensure that POI documents are valid, businesses must follow best practices for verifying the identity of their customers. These practices include checking for security features such as holograms and watermarks, verifying the document’s expiration date, and conducting background checks to ensure that the customer is not on any watchlists or sanctions lists. Businesses may also use biometric authentication or facial recognition technology to verify the customer’s identity. Best practices for verifying POI include:

Checking the validity of the document

 

Check the document for signs of tampering or forgery, and ensure that it is not expired.

Verifying the identity of the customer

Compare the information on the document with other information provided by the customer, such as their name, address, and date of birth.

Conducting background checks

 

Conduct background checks on customers to ensure that they have no criminal history or ties to terrorism or other illicit activities.

Using electronic verification services

 

Use electronic verification services to verify the authenticity of the document and ensure that it has not been tampered with.

 

It’s important for financial institutions to have clear policies and procedures in place for verifying POI, and to provide regular training to staff to ensure that they understand these policies and procedures.

The Future of Proof of Identity in KYC

As technology continues to evolve, the future of POI in KYC is likely to see further advancements. Self-sovereign identity, which enables individuals to control their own digital identity, and decentralized identity, which allows individuals to prove their identity without relying on a centralized authority, are emerging trends in identity verification.

 

However, as new technologies and approaches to identity verification emerge, it is essential that businesses remain vigilant and continue to follow best practices for verifying POI. The need for businesses to know their customers and comply with KYC regulations is unlikely to diminish, and POI will continue to play a critical role in this process.

How does AuthBridge conduct POI checks?

AuthBridge’s verification and onboarding solutions build on cutting-edge technology i.e. liveness detection, facial recognition, OCR, etc. extract information from the ID documents, check for any tampering, and determine the authenticity of the identity document in real-time. This ensures that businesses are dealing with a real identity document and not a fake one. 

 

Here is how you can optimize your KYC process with AuthBridge:

Data extraction with OCR

AuthBridge OCR APIs help you reduce turnaround time by removing the hassles of manual data entry. Now you can just scan/upload your NID, license or other documents and fetch the details right into your system.

Realtime Database Checks

Verify the authenticity of the uploaded documents by checking the possibility of tampering with the help of our anti-tampering mechanism. Validate the information against our proprietary databases in real-time or opt for thorough offline verification.

Advanced Verification Methods

Leverage state-of-the-art liveness and face-match APIs to make your identity verification process fail-proof. Cross-validation of information against multiple sources with a match logic ensures the validity of the claim of the identity of the individual/entity.

 

Get AuthBridge’s robust verification and onboarding solutions to meet these technical objectives, while also being scalable and cost-effective. Not only will you meet your verification requirements but also offer a seamless onboarding experience.

 

Talk to our solution expert today to know more about it.

By Shivangi, ago
Simplified Due Diligence Benefits, Process, Examples

Simplified Due Diligence: Benefits, Process, Examples

The objective of due diligence is to gather all relevant information to make informed decisions that minimize risk and maximize returns. However, traditional due diligence can be a lengthy, costly, and complicated process. 

 

That’s where simplified due diligence comes into play. Simplified due diligence is a streamlined version of traditional due diligence that focuses on identifying the most significant risks and opportunities while minimizing the time and resources required. 

 

In this blog, we will explore simplified due diligence in detail, including its process, benefits, use case examples,  and how it differs from other due diligence approaches.

What is Simplified Due Diligence?

Simplified due diligence is a streamlined approach to conducting background checks on individuals and entities. It involves a basic level of investigation which focuses on collecting information from publicly available sources. Simplified due diligence does not involve in-depth investigations or extensive data analysis,  but relies on standard search tools and databases to gather information.

Benefits of Simplified Due Diligence

Simplified due diligence offers several benefits, including

 

  • Cost-effectiveness: Simplified due diligence is a more affordable option than other due diligence approaches. It requires fewer resources, and the process is usually completed within a shorter period.
  • Time-saving: As in-depth investigations and extensive data analysis are not involved,  the process becomes faster as compared to other approaches.
  • Simplicity: Simplified due diligence is a straightforward process that is easy to understand and implement. It does not involve complicated procedures or specialized tools.
  • Risk mitigation: Even though simplified due diligence is a basic approach, it still helps organizations to identify potential risks and avoid making costly mistakes.

 

How Does Simplified Due Diligence Differ from Other Due Diligence Approaches?

 

Simplified due diligence is different from other due diligence approaches in several ways. Here are some of the differences:

 

  • Scope: Simplified due diligence has a narrower scope than other due diligence approaches. It focuses on collecting information from publicly available sources, while other approaches may involve in-depth investigations and analysis.
  • Purpose: Simplified due diligence is primarily used for low-risk transactions, while other due diligence approaches are used for high-risk transactions.

 

Examples of Simplified Due Diligence

Simplified due diligence can be applied to various business scenarios. Here are some use-case examples of simplified due diligence:

 

Onboarding New Customers

Financial institutions may use simplified due diligence to onboard new customers for lower-risk products, such as basic savings accounts. This helps ensure compliance while reducing the cost and time associated with conducting more in-depth due diligence.

Vendor Due Diligence

Companies may use simplified due diligence to assess the risk associated with potential vendors. This could include verifying basic details such as business registration and reputation.

Business Partnership

Before entering into a business partnership, businesses need to evaluate the partner’s financial stability, reputation, and legal standing. Simplified due diligence can help them evaluate potential partners quickly and cost-effectively.

Compliance Audit

Businesses need to comply with various laws and regulations, including anti-money laundering (AML) and know-your-customer (KYC) regulations. Simplified due diligence can help them conduct compliance audits quickly and efficiently.

Employment Background Checks

Many employers conduct simplified due diligence as part of their employment background checks. This could include verifying a candidate’s employment history, educational qualifications, and criminal record.

Reconciling Supplier Invoices

Companies that have long-standing relationships with suppliers can use simplified due diligence to reconcile supplier invoices. By verifying basic information about the supplier, such as their name and address, companies can ensure that they are paying the right entity.

 


Get AuthBridge’s robust verification and onboarding solutions to meet these technical objectives, while also being scalable and cost-effective. Not only will you meet your verification requirements but also offer a simple, seamless onboarding experience.

 

<Talk to our solution expert today to know more about it>

By Shivangi, ago
What is Proof of Address (POA) and its relevance in KYC

What is Proof of Address (POA) and its relevance in KYC?

Proof of Address (POA) is a document that verifies a person’s residence address. It is an essential requirement in the Know Your Customer (KYC) process for banks, financial institutions, and other regulated entities in India. POA is critical in identifying and verifying customers’ identities and preventing fraudulent activities such as money laundering and terrorist financing.

India is home to over 1.3 billion people, making it the world’s second-most populous country. With such a large population, it becomes a challenge for banks and financial institutions to identify and verify their customers’ identities. Therefore, the Reserve Bank of India (RBI) has made it mandatory for banks and financial institutions to obtain POA from their customers before opening accounts or providing financial services.

This blog will give you a clear idea about the Proof of Address (PoA), its importance, documents accepted as Proof of Address, and its relevance in the KYC process.

Why is proof of address important? 

The relevance of POA in KYC cannot be overstated, as it helps banks and financial institutions in identifying and verifying their customers’ identities. By obtaining POA, banks and financial institutions can ensure that their customers are who they claim to be and that their addresses are genuine.

Moreover, POA is necessary for complying with the regulatory requirements set by the Reserve Bank of India (RBI). The RBI mandates that all banks and financial institutions must follow the KYC norms and maintain records of their customers’ identities and transactions. The KYC norms require banks and financial institutions to verify their customers’ identities and addresses to prevent fraudulent activities.

Apart from the regulatory requirements, POA is also essential for ensuring the accuracy of customer data. It helps banks and financial institutions to update their customer records and maintain accurate information. This, in turn, enables them to offer better services to their customers and enhance their overall experience.

Documents accepted as Proof of Address(PoA)

In India, POA can be established through various NIDs and supporting documents. All individuals should submit at least one acceptable proof of address document. These documents must be valid and up to date to be considered as proof of address. In addition, the address on the document should match the address provided by the customer. Every business has its own requirements/guidelines when it comes to PoA documentation checks, but the most common documents verification solutions are listed below:

For example, the utility bill must be issued in one’s name to match the government-issued identification. Also, the submitted document needs to have a date (usually, it’s three months) for validity reasons.

Problems Solved by POA in KYC Process

POA plays a crucial role in the KYC process as it helps businesses to establish the physical address of their customers. POA serves as evidence of the customer’s residence and helps businesses to verify their identity and assess their potential risks. POA is a mandatory requirement for the KYC process, and failure to comply with KYC norms can result in legal action, including fines and penalties.

  • Compliance: Compliance is a significant problem faced by businesses in the financial sector. Businesses are required to comply with various legal and regulatory requirements, including KYC norms. POA helps businesses to comply with KYC norms by verifying the address of their customers.
  • Risk Management: KYC helps businesses to assess the potential risks associated with their customers, including money laundering and terrorist financing. POA helps businesses to establish the physical address of their customers and assess the potential risks associated with them.
  • Fraud Prevention: Fraud prevention is a critical problem faced by businesses in the financial sector. POA helps businesses to prevent fraudulent activities by verifying the address of their customers. This helps to prevent identity theft, money laundering, and other fraudulent activities.

How does AuthBridge conduct POA checks?

AuthBridge’s AI-powered verification solution helps detect document tampering or any discrepancy to reduce fraud and makes address verification easy. Our digital address verification leverages the power of image recognition, GEO-tagging coordinates and liveness detection technologies to verify the identity and physical address of employees, customers, vendors and business partners and ensures seamless verification.

Some important features are listed below:

  • Detailed address capturing with GEO coordinates
  • Minimal paperwork and enhanced onboarding experience
  • Data security compliant and integrable with leading HRMS tools

Get AuthBridge’s robust verification and onboarding solutions to meet these technical objectives, while also being scalable and cost-effective. Not only will you meet your verification requirements but also offer a simple, seamless onboarding experience.

Talk to our solution expert today to know more about it. 

By Shivangi, ago
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