Electronic Know Your Customer (eKYC) is a verification standard that uses digital tools to verify the integrity of customers dealing with financial companies. This includes the integrity of their risk tolerance, knowledge of investments, and financial positioning. For investment advisors, digital KYC protects against making poor decisions for ill-prepared clients. For customers, electronic KYC protects against advisors encouraging investments that may be more than the customer can handle.

In traditional KYC verification, a manual review is performed. This process can be time-consuming, and if every detail isn’t covered, mistakes can be made. This is one of the many reasons why many financial advisors turn to electronic Know Your Customer. Below are some of the other benefits of eKYC:

1. Reduce the Odds of Mistakes

Because electronic review of KYC data is handled by software, there are fewer chances for mistakes. This software uses algorithms and specific methodologies to glean detailed information about a customer. Even the most experienced data analyst can be prone to making mistakes, but digital KYC software tends to be more accurate overall.

2. Efficiency in Verification

Because data is verified using digital technology, the process is often more efficient. This provides financial companies with the ability to get back to focusing on other processes. Digital KYC software can run on new applications for services on the spot in many cases, allowing financial institutions to be more nimble and act on new customer engagement opportunities.

3. Potential for New Business

One of the things that often holds financial institutions back from seeking out a new business is the time investment involved in Know Your Customer processes. By taking advantage of electronic KYC, financial companies can branch out and seek new opportunities that they may have put off before.

4. Reduces Paperwork

Electronic Know Your Customer also reduces the amount of paperwork that needs to be filled out and filed. As a byproduct, this also reduces the potential for lost or destroyed documents. Archiving electronic records provides several ways to create multiple backup copies stored in different secure locations, allowing privileged individuals to gain access as needed.

Author Resource:-

Emily Clarke writes about identity verification and business verification service. You can find her thoughts at online id verification blog.