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In the context of advancing digital technology, eKYC has emerged as a modern solution, replacing the traditional customer identity verification method (KYC). With the advent of eKYC, the verification process has become more efficient and convenient than ever. This not only helps businesses save time and costs but also enhances the customer experience in online transactions.

1. Traditional KYC process and its limitations

a) Traditional KYC Process

In the traditional KYC process, customers must prepare identification documents such as an ID card, passport, or driver’s license. They then go to the office or branch of the financial institution to complete the identity verification.

This process is often time-consuming, requiring customers to put in the effort to complete the documentation. At the same time, businesses also face challenges in processing and storing physical documents, leading to inefficient resource use.

b) Limitations of traditional KYC

One of the biggest limitations of traditional KYC is the time factor. Customers often have to spend hours waiting and completing procedures. This not only wastes customers' time but also reduces business productivity.

Moreover, requiring customers to provide physical documents poses several risks. Documents can be lost, damaged, or even falsified. Businesses struggle with managing and retrieving information, potentially leading to serious issues concerning security and data protection.

In addition, the traditional KYC process lacks transparency. Customers often find it hard to know how the verification process is progressing and how their information is being used, which raises concerns about privacy and data security.

2. The superiority of eKYC over traditional KYC: efficiency and convenience

The transition from traditional KYC to eKYC marks a significant advancement in identity verification. Here are some key aspects highlighting the advantages of eKYC over traditional KYC.

a) Verification process efficiency

The traditional KYC process is often time-consuming and labor-intensive. Customers need to go to a physical office, carrying various identification documents for verification. This not only inconveniences customers but also slows down business operations.

In contrast, with eKYC, customers can complete the verification process from home via mobile apps or websites. With just a few clicks and an internet-connected device, everything can be completed quickly and conveniently. This ensures timely verification while minimizing risks associated with providing personal information.

b) Cost savings

Cost is a major factor for both customers and businesses. Traditional KYC requires businesses to invest in infrastructure, personnel, and document printing costs, which can accumulate to a significant amount.

However, eKYC helps businesses optimize operational costs. Automating the identity verification process reduces the need for human resources and eliminates various other incurred costs. This provides considerable benefits to the organization’s operational budget.

c) Enhanced Customer Experience

Customers always expect quick and convenient service. Traditional KYC fails to meet this expectation, as it requires customers to wait and complete several complicated steps. In contrast, eKYC allows customers to verify their identity anytime, anywhere, providing a sense of ease and satisfaction.

Businesses can leverage eKYC to build a professional and reliable image in the eyes of their customers, thereby enhancing brand reputation and increasing customer retention.

Author: FTECH AI