Facial Recognition in banking for E-KYC and Transactions
All businesses and economic agents, especially financial institutions and banks, have been badly affected by the coronavirus, and every service is provided remotely for the ease of users and maintaining social distance regulations.
Financial institutions are experiencing a drastic process of digitalization.
Companies and organizations are struggling to transform and digitize processes that seemed difficult to automate and get remote. However, specialized businesses have appeared to achieve this task, using cutting-edge technologies such as artificial intelligence and machine learning to transform and optimize processes.
What is E-KYC (Know your Costumers)
E-KYC (Electronic Know Your Customer) is a remote, paperless process/service availed only for the citizens having Aadhaar card. It has helped banks and financial institutions in knowing their customers without being physically present using technologies like AI, Machine- Learning, and Facial recognition.
On 26th September 2018, the Supreme Court passed judgment about Section 57 of the Aadhaar Act, this allowed the use of Aadhaar KYC by private companies and was declared unconstitutional under the Indian citizen’s Right to Privacy.
For availing E-KYC, individuals have to authorize the Unique Identification Authority of India (UIDAI), by proving his/her consent to release the identity through biometric authentication of the bank. The UIDAI then transfers the individual’s data electronically to the banks.
Process for E-KYC followed by banks for a new customer registration
1. Fill the customer details like Name, Age, Address, contact details, etc on the bank’s mobile application or website
2. Images (Selfie) are uploaded by the applicant for the front, left, and right face profiles which are used for authentication later.
3. Instructions on how to take a selfie are needed to set up an account: gesture ‘blink eyes,’ gesture ‘turn head left,’ gesture ‘turn head right’
4. Applicant upload’s the relevant documents and a request-id is generated.
5. The details and the document submitted are validated by the bank using UIDAI
6. The new account is opened only if the data is validated to be true which includes the Face-id, Name, Contact details, Address, etc.
Example: The OCBC Bank from Singapore enabled clients to use such an AI-driven option
Advantages of E-KYC in crises for banks
· Allowing customers to open bank accounts in an instant, paperless, cost-effective manner.
· Fraud Prevention as the customer identity is validated with UIDAI
· E- KYC has already been recognized as a valid document for every financial service offered under the PML (Prevention of Money Laundering) Rules by the Ministry of Finance.
· New account opening through the remote location of the customers
· Time-saving as customers don’t need to be physically presented.
· Use of facial recognition for identity validation for successful transactions.
· Increased customer satisfaction
Facial Recognition and AI in banking
Facial recognition technology is making its way into the banking industry, which is used for physical security and ID recognition. It’s important to recognize key customers well before they enter any of a bank’s branches for better servicing. Being able to recognize key customers and inform their client relationship manager well in advance will help banks to provide better products & service offerings.
With the use of these technologies financial institutions can increase their efficiency, accessibility, and better customer experience.
Being able to analyse customers through facial recognition will help banks to serve and advise them better so that important financial decisions can be taken. Banks can advise on various product offerings like investments, loan products, wealth management solutions, and insurance & credit cards.
Process of facial recognition for successful transactions
Facial recognition is the process used for successful transactions for a customer in which the system recognizes an individual by matching the input image against the images in the database and finding a match. Once a successful match is found the transaction is successful.
Advantages of Facial Recognition System for transactions
· Enhanced security
· Easier Fraud detection
· Faster Processing of transactions
· Time-Saving
· Reduction of manual error
· Automation of identification of User’s
Conclusion
Facial recognition is a powerful technology and has varied advantages concerning its usage in various domain like healthcare, banking, Retail, Marketing, etc. which brings immense advantage to the companies and end-users, helps them enhance their security and make the task easier. But if the technology is misused for the personal benefit it can lead to some serious consequences.
References
1. https://learn.g2.com/ai-in-banking
3. https://iopscience.iop.org/article/10.1088/1742-6596/1362/1/012109/pdf
The blog was written with help of https://medium.com/@dhamapurkar.pallavi.pd.