Technology Trend: Digital KYC

By | June 21, 2014
This entry is part 15 of 30 in the series Trends

How can digital banks on-board customers without a branch visit?

From Digital Bank by Chris Skinner:

Danish banks, along with others in the Nordic nations, have focused on using digital identities to avoid having to on-board customers using a traditional paper-based process. “On-board” is the term used by banks to manage the account-opening process and is incredibly difficult due to the regulatory requirements of Know Your Client (KYC). KYC demands that new customers opening accounts at a bank must prove their identity with various documentation, such as a passport or driving license as well as proof of address through official letters sent to them recently at that address, such as a utility bill.

In contrast, digital identities allow customers to be recognized without the need for such physical documentation, and are the likely way in which banks will manage the KYC process in the future.

And “Jibun Bank and eBank in Japan both accept account opening on the basis of just a photograph of your driving license via mobile. The driving license is read by a character recognition system and checked with the government’s driving database. As long as all is aligned, the account is opened.

Finextra KYC Exchange builds banking momentum points out another option for acquiring KYC data: “Swiss-based due diligence utility KYC Exchange has signed service contracts with Commerzbank, Société Générale and Standard Chartered for the regular exchange of Know Your Customer data between the banks and their clients.


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