{"id":11319,"date":"2019-06-01T05:38:48","date_gmt":"2019-06-01T09:38:48","guid":{"rendered":"https:\/\/www.m2sys.com\/blog\/?p=11319"},"modified":"2021-07-16T04:05:37","modified_gmt":"2021-07-16T08:05:37","slug":"why-most-kyc-fail","status":"publish","type":"post","link":"https:\/\/www.m2sys.com\/blog\/biometric-hardware\/why-most-kyc-fail\/","title":{"rendered":"Why Most KYC Fail?"},"content":{"rendered":"

Banks and different financial institutions are the gatekeepers of the monetary system and possess a high level of responsibility to stop financial crime. They have worked hard to establish know-your-customer (KYC) policies, strategies, and methods to support their efforts. The primary objective of KYC is to prevent money laundering, stop suspicious financial activities that can lead to counter-terrorism and save banks from financial fraud so that banks can manage their risks wisely. However, unfortunately, most KYC initiative fails to accomplish its objectives due to various reasons. The following are the reasons why most of the conventional KYC fails;<\/span><\/p>\n

\"Why<\/p>\n

A Time Kille<\/b>r<\/span><\/h2>\n

There is no standardized process in inter bank KYC. Some require a birth certificate or passport, while others want Social Security Card or other types of national IDs and driving licenses. This non-standardized process creates a very complicated situation for all that results in poor customer experience. On the other hand, due to having lengthy processes, authorities sometimes forget to check information authenticity. This results in <\/span>financial crime and failure in the KYC process.<\/b><\/a><\/p>\n

Lacks Proper Identification System<\/b><\/h2>\n

The information provided by the customer must be verified otherwise KYC would fail. Unfortunately, manual KYC fails to check customer information. Hardly can it detect the customer’s previous history as it is only based on documentation, these documents can be falsified or manipulated. The process needs to be more sophisticated and efficient enough to verify customers; otherwise, KYC would fail to validate its customer correctly.<\/span><\/p>\n

Complicated KYC Process<\/b><\/h2>\n

In most previous cases, bank follows the conventional method of pen and paper-based KYC process. However, these traditional methods have so many drawbacks that never fit with today’s world. These drawbacks are:<\/span><\/p>\n

    \n
  • Complicated process<\/span><\/li>\n
  • Can not ensure information authenticity<\/span><\/li>\n
  • Cumbersome managing process<\/span><\/li>\n<\/ul>\n

    So you can see, all these reasons above make your KYC weak and gradually makes you vulnerable to crime and fraud.<\/span><\/p>\n

    Lack of Audit Trail<\/b><\/h2>\n

    Conventional KYC system collects data using paper-based form. Using those given data banks or financial institutions check the validity. The whole process is followed by a manual system which could be manipulated. There is no<\/span> audit trail in the system which opens the door to data manipulation and results in KYC failure.<\/span><\/p>\n

    Are you one of those deploying KYC that might fail anytime. It is high time you change and adopt the right one.  Otherwise, you can hardly save your financial institution from fraudulent activity. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

    Banks and different financial institutions are the gatekeepers of the monetary system and possess a high level of responsibility to<\/p>\n","protected":false},"author":402,"featured_media":15354,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_focuskw":"kyc failure","_yoast_wpseo_title":"Why Most KYC Fail?","_yoast_wpseo_metadesc":"The primary objective of KYC is to prevent financial crime.But unfortunately, most KYC initiative fails to accomplish its objectives. 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