What is the ekyc system - An introductory explanation of digital identity verification

When it is necessary to access financial services or open a new account, almost everyone encounters the identity verification process. In the past, this process required face-to-face interaction with staff. But today, ekyc technology has changed the way. You can complete all transactions from home, saving time and avoiding the hassle of traveling.

What is ekyc - Meaning and Basics

ekyc stands for Electronic Know-Your-Customer, which is a system for identifying and verifying identity through electronic technology. This structure replaces traditional (KYC) that requires direct contact with personnel.

In the ekyc system, users can:

• Self-identify (Identification)
• Verify their identity (Verification)
• Reduce manual document filling
• Perform transactions 24/7

Methods of identity verification in ekyc - 3 main types

The ekyc system offers various verification options:

Biometric Authentication - Biometric Recognition

This method uses a person’s biometric data, such as:

• Face scan
• Fingerprint scan
• Iris scan

This method can be used for smartphone login and banking app transactions.

Optical Character Recognition (OCR) - Document Scanning

OCR is a technique for reading data from image documents, such as:

• ID cards
• Bank account statements
• House registration copies

This data is converted into digital format, reducing manual data entry steps.

National Digital ID (NDID) - Digital ID Card System

NDID is an online verification method popular among Thai banks, such as:

• Face scan with ID card
• Verification through government financial systems

Data standards required for ekyc

Identity verification via ekyc requires various data depending on the user type:

For individuals:

• National ID number
• Full name
• Date of birth
• Current address
• Mobile phone number
• Email address
• Facial photo

For legal entities:

• Company name
• Corporate registration number
• Office location

In addition to personal data, the ekyc system requires an authenticator, which is what you use to verify your identity:

• Something you know - information only you know, such as a password
• Something you have - items you possess, such as an ID card
• Something you are - your biometric features, such as fingerprints

Advantages of using ekyc

Electronic identity verification systems offer many benefits:

Convenience and cost savings

• No need to visit branches
• Save travel expenses
• Reduce paper and document copies

Data security

• High-security data storage
• Data encryption
• No issues with document forgery later

Wide usability

• Users can register anytime
• Used in banking, government, and business sectors
• Suitable for opening accounts, investing, and insurance

Disadvantages and challenges of ekyc

Despite many advantages, the ekyc system has some weaknesses:

Access issues for at-risk groups

• Elderly may have difficulty using technology
• People with limited digital knowledge

Security risks

• Data of vulnerable groups may be misused
• Increased need for data protection

Differences between ekyc and traditional KYC

In terms of process

• KYC: manual verification using physical documents like ID cards and passports
• ekyc: relies on digital technology, biometrics, and digital signatures

In terms of required documents

• KYC: customers must prepare copies of ID and address proof documents
• ekyc: no need for paper documents, as verification is online

In terms of time taken

• KYC: requires travel and face-to-face contact, taking more time
• ekyc: can be done remotely, faster and more efficiently

In terms of accuracy

• KYC: prone to errors from manual processing
• ekyc: digital methods offer higher accuracy

In terms of security

• KYC: physical documents can be forged or altered
• ekyc: encryption systems and biometric verification reduce fraud risk

In terms of user experience

• KYC: requires travel and time-consuming procedures
• ekyc: remote verification with high convenience

Overall, ekyc offers better efficiency, convenience, accuracy, and security than traditional KYC, thanks to digital technology and remote verification methods.

Summary

Today, ekyc has become a widely adopted identity verification method across various sectors, from banking and government to financial businesses. Whether opening investment portfolios, accounts, or insurance, the ekyc system is increasingly implemented.

The advantage of ekyc is protecting personal data from leaks and effectively maintaining user privacy. Despite some weaknesses, overall, ekyc is a step forward in improving identity verification processes in the digital age.