e-KYC concept enhances secured financial services for customers

There are many areas that will involve e-KYC or online ID verification in BFSI


ELECTRONIC Know-Your-Customer (e-KYC) concept is the new buzzword for banks, financial services and insurance industry that looks into giving more secured financial services for customers.

Thanks to the e-KYC policy and guidelines by Bank Negara Malaysia (BNM) and Securities Commission Malaysia (SC), more players are actively taking part in this sector in Malaysia.

“There are many areas that will involve e-KYC or online identification (ID) verification in banking, financial services and insurance (BFSI), from account opening to financing facility application, investment account activation and e-banking/mobile banking activation,” said Innov8tif Solutions Sdn Bhd COO Law Tien Soon (picture).

Founded in 2011, Innov8tif is an artificial intelligence (AI) company helping businesses to widen sales funnel, speed-up processes without paper and prevent frauds.

Law said with the rising cases of SMS one-time password (OTP) frauds, it is evident that SMS OTP isn’t necessarily the best second-factor authentication method.

Facial biometrics which is a part of e-KYC registration is the most secure method to protect customer’s identity and assets.

“Certainly, yes, and a more Innov8tif’s areas of specialisation are digital ID verification or e-KYC, digital low-code process automation and mobile biometric authentication,” he added.

Law highlighted that from their experience of serving eight telecommunication companies (telcos) in Malaysia, telco is the first industry to have benefitted from digital ID verification — 24/7 realtime customer onboarding made possible.

He said during the Movement Control Order (MCO), mobile network operators equipped with e-KYC channel were experiencing an average of 279% growth from online self-service prepaid SIM registration in April 2020 compared to February 2020.

“In emerging areas that we will see huge up-take of e-KYC are use cases related to the online signing of business-to-business (B2B) or business-to-consumer (B2C) agreements.

“It could be a tenancy agreement led by property technology (proptech) company, a service subscription agreement signed between consumer and service provider, or a business transaction agreement (ie financing facility) signed between two business entities,” he said.

Innov8tif is headquartered in Malaysia, with core AI engineers based locally in Klang Valley. Its first fully digital e-KYC implementation is with Yoodo in January 2018.

Subsequently, a similar use case is replicated in Tune Talk, Maxis Bhd’s Hotlink Daftar and Celcom Life.

Innov8tif’s solution is embedded into the customer registration app such as e-wallet platforms like Boost.

“Earlier this year, we have also helped Valyou — Telenor-owned money remittance company regulated by BNM — with e-KYC.

“More production use cases of Innov8tif’s e-KYC solution among financial services companies, proptech, insurtech and SC’s regulatees, in the third and fourth quarter this year,” he added.

EMAS e-KYC — Innov8tif’s flagship product for e-KYC solution — was accorded Merit for B2B Fintech category at the 19th Asia Pacific ICT Alliance Awards.

Meanwhile, Sedania As-Salam Capital Sdn Bhd (SASC) CEO Nisa Ismail also shared the same thought the e-KYC would be a boon for the financial industry as a study conducted by McKinsey & Co showed that there is a potential cost reduction of 90% in customer onboarding cost by enabling e-KYC.

“Financial industry has different segments from the banks to credit houses and we aim to address all layers or segments,” she told The Malaysian Reserve.

SASC, a wholly owned subsidiary of Sedania Innovator Bhd, operates Assidq.com, an online marketplace for Islamic personal finance products that facilitates the customer’s Islamic financial needs through a personalised profile check with fast approval and disbursements.

Nisa said the prospects are huge as they need to keep up with the evolving consumer behaviours, the three to four clicks approach to complete a transaction or application is desirable by most of the customers.

“Regulators want digital banks to focus on the underserved and unserved market segments, and this is what we’re doing in SASC with our e-KYC, but we are mainly focusing on Tier 2 and Tier 3 such as credit corporations.

“We have launched our As-Sidq Al-Thiqa this year, an automatic e-mandate enrolment from a salary account on Assidq.com, of which, is a form of e-KYC,” she said.

Nisa said the current Covid-19 pandemic is proving a further catalyst, especially during the MCO period, of which more people leverage on its digital acquisition as customers can’t visit the physical branches.