Video identification: A solution for regulation, COVID-19 & efficiency
22 April 2021
Written by Shu Pan, AI-Product Manager
Video identification is a process that supports live video chat as a new channel in addition to traditional digital identity verification processes. ADVANCE Video Identification, facilitated by robust live video streaming services, combines with a comprehensive identity verification workflow powered by ADVANCE.AI's proprietary AI technologies and has excellent anti-fraud capability to prevent identity fraud. It is generally regarded as the latest and most advanced way to carry out the online KYC process, where KYC agents can verify the customers through a live video call in real-time.
The process of ADVANCE Video Identification:
A video call is initiated either by the end-user (target of KYC) or KYC agent.
The end-user is instructed to submit ID documents and relevant information for pre-call checks. Digital identity verification system (key functions usually include: OCR, Liveness Detection and ID Check) will run in the backend.
End-user joins a service queue and subsequently gets on a live video call with KYC agent.
The KYC agent conducts KYC and verification tasks during a video call with assistance from the comprehensive functions of question list, comments, photo capturing, AI face comparison, and more.
The KYC agent assesses end-user’s qualification according to a predefined checklist.
Video call is completed with all relevant information captured, including a video recording of the entire session.
How ADVANCE Video Identification works
Video identification process vs traditional KYC process
ADVANCE Video Identification provides customers with an easy and instant verification process while ensuring efficiency and accuracy in information collection for financial institutions, thus protecting all components from fraud attacks. Compared to the traditional KYC process, the video identification process has the following advantages:
Optimising customer experience:
All companies aim to improve customer experience, but customers often criticise the tedious and time-consuming traditional KYC process. The video identification process greatly enhances customer experience, enabling customers to obtain assistance and verification by a KYC remotely at any time or with much more flexibility in time and location through a video call. Meanwhile, without the need for physical presence offline, the video identification process saves the end-user's precious time. Moreover, considering the lasting influence of the COVID-19 pandemic, the guarantee of a touchless and contactless process like video identification can make customers feel safer.
Saving time and labour costs for the financial institution:
AI-powered ADVANCE Video Identification (including key functions such as OCR, ID check, Liveness Detection and Face Comparison) speeds up the verification process, saving time and labour costs for financial institutions. For example, OCR on documents could eliminate the need for manual input of customers' basic information. ID checks can cross-reference the ID document submitted by a customer against an official database to verify the submitted document’s authenticity. Liveness Detection ensures that a real person will be present during the video call. Face Comparison verifies if the face of the end-user is matched with the picture presented on the ID documents, which eliminates human error. All of these AI features shorten the verification process from hours and days to only minutes.
In sum, it's easy to discover that three widely-recognised benefits are driving the trend and acceptance of video identification:
Providing contactless service:
In many places, people were used to conducting the KYC process through face-to-face interaction with information and document submission. The COVID-19 pandemic introduced the sudden disruption of the traditional KYC by rendering it very inconvenient to conduct physical contact, thus boosting the demand for digital identity verification.
Adapting to tighter regulation:
With the popularity and efficiency of digital onboarding and KYC processes powered by AI in recent years, many companies have adopted a fully-automated process. However, many components, including governments and regulators, consider that the fully automated KYC process can be risk-prone and vulnerable to errors. Countries like Germany and India have introduced regulatory requirements enforcing Video Identification to be part of the process to reduce the risks from system errors.
With the worldwide improvement in network and communication infrastructure, especially the advent of 5G, the speed and quality of data transmission and data consumption are no longer stumbling blocks in many countries. Therefore, the convenience offered by Video Verification has been making it an inevitable trend.
Who can benefit from using ADVANCE Video Identification?
For any company that needs to perform KYC and customer onboarding, ADVANCE Video Identification is likely to be of great help. The following are types of companies that could most benefit from our video identification solution.
Banks, financial institutions and fintech companies
With the development of laws and regulations in various countries and regions, Video Verification during the onboarding process is becoming mandatory for financial institutions. ADVANCE Video Identification can also help them operate more onboarding and remote applications within a limited time and with limited resources.
Insurance and loan providers
Insurance and loan industries usually confront a high risk of fraud. Many users try to defraud insurance money and loans through faked identity and forged documents. "Video + AI" features provide a packaged solution to efficient identity verification and fraud detection.
Electronic payments are becoming more and more popular in people's daily lives, either with traditional fiat money or cryptocurrency. Compliance and business requirements on the KYC process in this domain have become the industry's most prominent topic. ADVANCE Video Identification, as a robust solution, can dramatically reduce risk concerns in the electronic payment account-opening processes.
Looking forward: It is an inevitable innovation trend
Implementing video identification solutions will be an inevitable innovation trend with the rapid development in video streaming technology, networks, and AI. Meanwhile, the market demand for video identification is increasing significantly because of the growing identity theft risk in the digital era. According to recent findings from Global Identity and Fraud Report 2019: 55% of businesses in the global financial industry reported an increase in fraud-related losses over the past 12 months. Furthermore, identity fraud scams grew 15% in 2019 to $16.9 billion losses and soared to $43 billion in 2020, as per the annual Identity Fraud Reports released by Javelin Strategy & Research in 2020 and 2021, respectively. Implementing a reliable digital identity for remote customers is undoubtedly a necessity, not an optional choice, in the digital era.
The COVID-19 pandemic has also increased the market demand for video identification. For example, in India, we have seen a monthly growth rate of over 300 % in video identification technology-enabled activity since May 2020. Furthermore, since the pandemic has given the identification technology industry enough time to educate the market, we have reason to believe that people will continue to rely on video identification products in the post-COVID-19 era due to their efficiency and robustness.