Online Document Verification – Transforming The Convertibility Industry And Future Predictions
Short Summary: With an increasing rate of crime, traditional systems for KYC verification are ineffective. We need online document verification more than ever.
The foreign exchange or forex industry is the foundation of international financial cross-linkage. It is constantly evolving and driven by technological advancements and the ever-changing regulatory landscape. In today’s digital era, modern culture demands customer onboarding to be both secure and efficient in its execution.
Making customer onboarding secure in the financial industry is critical and must not be compromised. Thus, finding solutions to this problem is a challenge. For decades, we have used document verification to address this issue. However, in today’s age, financial criminals abuse technology to get past traditional methods. In such a situation, online document verification comes as a solution that counters the abuse of technology by criminals by using technology to fight them at an equal level.
KYC document verification via online systems first emerged as we learned to combine systems such as OCR, image capturing, and image editing. Later, we added other newer technologies, such as facial recognition, artificial intelligence, and big data.
The Rise of Online Document Verification within the Industry
Traditionally, forex onboarding involved manual verification of physical documents. This process was exhaustive for customers and administration and was
often prone to delays and human errors. Online document verification, however, has recently become a faster, more reliable, and much more cost-effective alternative.
Collection of Information
In the first step, customers upload scanned copies or photos of their KYC documents. These documents include passports, national IDs, driver’s licenses, and other proof of identification. The verification technology collects these documents through secure online platforms. Besides simply collecting the documents, the system might also demand the user upload a live selfie.
Analysis
After the information is collected, complex and highly advanced algorithms analyze the documents and images. These algorithms utilize OCR, facial recognition, etc., to check for authenticity, signs of forgery or tampering, and data integrity.
Biometric verification
After the documents are thoroughly authenticated, any facial data collected is verified and cross-checked with the pictures on the document.
Cross-referencing
Some technology may also include cross-checking with other external databases as part of the online document verification process. These can include watch lists, no-fly lists, police databases, etc. This helps to verify the information.
Benefits of Online Document Verification in the Foreign Exchange Industry
Enhanced security
Verifying online documents is one of the simplest ways to ensure you are aware of the users on your platform. Thus, document checking via online document checkers allows for a reduced rate of financial crime. Furthermore, online document verification minimizes the risk of fraud by finding forged or altered documents.
According to a recent study, about 81% of financial institutions reported an increase in fraud attempts in 2022. Thus, robust online document verification becomes critical for mitigating these risks and ensuring regulatory compliance.
Improved efficiency
Automation of the verification process has the power to reduce processing times significantly. According to research, over 70% of customers or potential customers expect low waiting times and no hassle. With automation, we can put everything into the hands of the customer, and they can process their signups and other tasks wholly at their own pace.
Automation allows for a smoother customer experience and faster access to trading opportunities.
Reduced costs
According to research, an average financial company spends over 500 million U.S. dollars on compliance with KYC online document verification.
With an online document verification system, forex firms can reduce these costs as everything is outsourced to a third party. Thus, there is no need to spend on additional employees, paper, and other fees.
KYC for the Foreign Exchange industry: Looking at the upcoming years
A recent report indicates that online document verification technology within the financial sector will grow by over 200% in the next half a decade. This growth is thanks to the need to mitigate the rising risks of digital identity fraud, strict KYC (Know Your Customer) regulations, and improve operational efficiency for forex businesses.
The Final Word
Today, online document verification is rapidly transforming how forex businesses operate. By embracing this technology, forex brokers can set on to enhance business security and strengthen their foundations.
As technology, in general, continues to evolve, crime will, too. This makes it all the more essential to invest not just in KYC research but also in the consistent use of document verification. The scope of online document verification in the forex industry is broad, and harnessing this scope can pave the way for a secure and efficient trading environment.
