EKYC FOR CREDIT SCORING PROCESS

Identifying companies’ potential customers before moving on to the transactional phase is one of the most important things to do to ensure security and trust. To do this, KYC (know your customer) approach is popular among companies to get to know their potential customers. KYC is a guideline for companies and financial services that require them to verify the identity, suitability, and risks in a professional relationship. Because of that, the KYC method is popular among financial services that risk a lot of financial investment when meeting potential customers. In this modern era, KYC is adapting into digital means, now bearing the acronym eKYC (electronic know your customer). 

Due to the societal demands that stem from the progress of time, many companies and financial services use eKYC methods at an increasing rate each year. The reason why they are moving to eKYC instead of the manual KYC process consists of several factors. The manual KYC process involves meeting potential customers with different backgrounds, which makes it hard for the representatives from the financial services to meet them if they come from isolated locations. Moreover, identity fraud and document forgery are risks that always loom over the implementation of manual KYC, which in turn undermine the very essence of KYC’s risk management purpose.

Another thing that can be severely undermined by the manual KYC is credit scoring. According to its definition, the credit score is a particular scoring system that financial services use to determine a potential customer’s worth in applying for a lease from these services. The services can collect a person’s credit score from the number of previous transactions and bills of that particular person. Apart from the personal financial history, other factors are equally important in the credit scoring process, such as age, marital status, career, home status, education, and many others.

Relating to the previously mentioned risk of identity fraud and document forgery, eKYC is expected to solve the problem left behind by the manual KYC. In this regard, several notable financial services are offering eKYC service for risk management of financial transactions. These digital KYC services work on the principle of digital learning to perform risk management and identify customer behavior from various potential clients. With the help of digital features, tracking the personal identity of potential clients can be highly improved. In return, financial services can expect more accurate credit score results from using these services.

Furthermore, digital features can also help eKYC in many ways. Biometric data and AI can go hand-in-hand in assessing the authenticity of the clients’ identities while compiling the scores for the credit scoring process. With this in mind, customer profiling can be made more efficient as biometric data can accurately store and verify a person’s facial features to prevent fraud. Even better, the AI can help the financial services in assessing the documents immediately upon submission, which in return significantly decreases expenses made from the customer profiling process.

With the immediate speed of the identity verification process, the risk of document forgery can be detected as soon as possible should any of the documents is proven false. Should the potential customer is discovered for falsifying their identity; the credit application rejection can be done immediately. At the same time, financial services manage to perform risk management by identifying the authenticity of necessary personal details in a real-time manner.

From the previous explanation, we can see how eKYC is quickly turning into an alternative to the conventional KYC process. By performing eKYC measures, a more accurate result of personal details verification can be received at a pace quicker than the conventional method. To achieve this standard, AdIns offers Profind, reliable service for eKYC and credit scoring process. Reliable and trusted, Profind has been utilized by clients from all over Indonesia with satisfying and commendable results. Try Profind now!