On a Budget for KYC – AR to the Rescue

What is KYC (Know Your Customer)

Know Your Customer (KYC) refers to verifying the identity of customers or clients to ensure that they are who they claim to be. It is a crucial part of any business that involves financial transactions, such as banking, investments, and insurance. The KYC process collects and verifies customers’ personal and financial information, such as name, date of birth, address, identification documents, and economic status.

KYC helps businesses to identify and prevent money laundering, terrorist financing, fraud, and other illegal activities that could harm their reputation and financial stability. The KYC process also helps businesses to comply with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.

KYC can be conducted through various means, such as face-to-face, online, and document verification. It is a continuous process, and businesses must update their customers’ information regularly to ensure that they comply with the latest regulations and requirements.

KYC helps prevent wrongdoing, not respond to it. Most financial services ask for customer data during registration – even before they can make financial transactions. In some cases, accounts can be created without going through KYC, but their functions will be limited.

Advantages of KYC

Only some of the benefits of KYC are obvious. This practice helps not only to resist fraud but also to improve the financial system as a whole:

  1. Lenders can more easily assess their risks by knowing the identity and financial history of the client. KYC promotes more responsible lending and risk management.
  2. KYC aims to combat identity theft and other types of financial fraud.
  3. KYC acts as a preventive measure against money laundering.
  4. KYC increases customer confidence in financial service providers and helps monitor these services’ security and accountability. The reputation of services directly impacts the financial industry as a whole and can stimulate investment.

Disadvantages of KYC

The KYC procedure has several obvious advantages but still causes some controversy. Many people are opposed to KYC due to the traditionally anonymous nature of cryptocurrencies. Typically, most of the criticism is based on privacy and fees issues:

  1. Additional costs are associated with performing KYC checks, which are often passed on to the client as a fee.
  2. Some people need the documents or fixed addresses required for KYC verification. All this makes it difficult for them to access certain financial services.
  3. Irresponsible providers may have weak data protection, and then hacks can lead to funds and personal information theft.
  4. This practice contradicts the idea of cryptocurrency decentralization.
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Face recognition technology

Face recognition is the automatic localization of a human face in an image or video, if necessary, identifying a person’s identity based on existing databases. There are many people interested in technology: there is a wide range of tasks that they solve.

  1. Public safety. With the provision and maintenance of security, the introduction of biometric identification systems began. Remote facial recognition systems ensure security in places of global congestion. The most difficult task is recognizing a person in a crowd when he does not interact with the system directly, does not look toward the camera, or covers his face. For example, in the subway, at concerts, festivals, and conferences.
  2. Know your customer by sight. People in business also rely on biometrics. This applies to retail. The systems learn the gender and age of customers and the date, time, and frequency of visiting establishments.
  3. Access control and management systems. In addition to the functions listed above, using the face recognition system as an alternative to Proximity cards in access control and management systems (ACS) is convenient. They guarantee high recognition reliability; they are unrealistic to deceive, copy or steal an identifier; they are easy to integrate with existing security equipment. Surveillance cameras are allowed. Biometric face identification systems operate instantly, over long distances, and with the preservation of events in the archive.
  4. Fan passes to the stadium. During the purchase of a ticket at the box office, the face of each buyer is automatically photographed and uploaded to the system. This is how the base of match visitors is formed. If the purchase was made using the Internet or a mobile application, then authorization is possible remotely using biometrics. Later, if a sports fan comes to the stadium, they will let him in without documents.
  5. Internet banking and ATMs. The introduction of biometric systems is taking place actively since the banking sector is more interested in the safety of personal information than others. Now biometrics is on par with paper documents. At the same time, the degree of protection during payment transactions increases significantly: to confirm the transaction, it is enough to look into your phone’s camera.

What is AR (Augmented Reality)

AR (Augmented Reality) is a technology that overlays digital information or virtual objects onto the real world, creating an augmented view of reality. Unlike Virtual Reality (VR), which creates a completely artificial environment, AR enhances the real-world environment by adding computer-generated sensory inputs.

AR can be experienced through various devices, such as smartphones, tablets, smart glasses, and headsets. AR technology uses sensors, cameras, and software algorithms to track the user’s environment and display relevant information or digital objects in real time.

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AR has various applications across industries, such as gaming, education, healthcare, manufacturing, and marketing. For example, AR can be used in gaming to create interactive games that incorporate real-world environments and objects. In education, AR can provide interactive and immersive learning experiences for students. In healthcare, AR can be used for surgical training and medical simulations. In marketing, AR can provide customers with interactive product demonstrations and experiences.

AR has the potential to revolutionize the way we interact with technology and the world around us. It provides new opportunities for innovation and creativity, allowing businesses and individuals to explore new possibilities and create new experiences.

In what areas is used AR

The technology has practically no restrictions on the content and principles of use, so it is found in different areas:

  1. Industrial production. Assessment of the state of equipment by sensors, the parameters of which are displayed on the screen of a mobile device when pointing the camera at an object. Production optimization is simplified with on-screen tooltips.
  2. Retail. Shopping and mall navigation, product information.
  3. Game industry. The combination of reality and virtual action gives users a new gaming experience. Games like Ingress or Pokemon Go force people to move, not sit at the monitor.
  4. Advertising. Demonstration of 3D models of products and goods, such as furniture and equipment, at the customer’s premises under predictable conditions of use. Selection of wheels for the car. Virtual display of properties to potential buyers.
  5. Beauty sphere. Trying on the outfit, hair color, and makeup before the physical transformation.
  6. Education. Interactive lessons with planets floating in the air or marine life.
  7. Entertainment and benefits. Applications that show how a drug works on a living person using superimposed graphics and diagrams.
  8. Tourism and culture. Routes, virtual guides, animated concerts, and museum exhibits come to life.

Augmented reality gives limitless scope for creative thought. That is why technology will become commonplace in the next 5-10 years.

How AR can help with face recognition, safety, privacy

Augmented Reality (AR) technology has the potential to enhance face recognition, security, and privacy in various ways.

  1. Face Recognition: AR can improve face recognition technology by providing real-time feedback and analysis of facial features. AR can enhance the accuracy and speed of facial recognition systems by using advanced algorithms and machine learning techniques.
  2. Safety: AR can help improve safety in various industries, such as manufacturing, construction, and transportation, by providing workers with real-time information and guidance. AR can overlay safety information and alerts onto workers’ fields of view, allowing them to stay aware of potential hazards and risks.
  3. Privacy: AR can also help to protect privacy by providing users with more control over their data. For example, AR could mask or blur faces in real-time, ensuring the user’s identity is not revealed in public spaces. Additionally, AR can give users more control over their online data by allowing them to share information selectively with specific parties.
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AR can improve face recognition, safety, and privacy by providing advanced features and capabilities to enhance existing technologies and systems. However, it is important to ensure that AR is used ethically and responsibly to avoid any potential negative impact on society.

KYC and AR

AR (Augmented Reality) can assist with the KYC (Know Your Customer) process by providing a more efficient and streamlined method for verifying the identity of customers. Here are a few ways in which AR can be used in the KYC process:

  1. Document Verification: AR can be used to verify the authenticity of identification documents, such as passports and driver’s licenses. AR can scan the document and check for security features like watermarks, holograms, and microprint. This can help prevent fraud and ensure the customer’s identity is legitimate.
  2. Facial Recognition: AR can be used for biometric facial recognition to match the customer’s face with the photo on their identification document. This can provide an added layer of security and ensure that the person claiming to be the customer is, in fact, the customer.
  3. Remote Verification: AR can be used for remote customer verification, allowing customers to verify their identity from the comfort of their own homes. This can be done through a mobile app or web browser, where the customer can scan their identification document and use facial recognition to verify their identity.

By using AR in the KYC process, businesses can improve the verification process’s accuracy, efficiency, and security. This can help to reduce fraud, prevent money laundering, and ensure compliance with AML (Anti-Money Laundering) and CTF (Counter-Terrorism Financing) regulations.

Conclusion

In conclusion, the use of AR technology in the KYC (Know Your Customer) process has the potential to enhance the accuracy, efficiency, and security of customer verification. AR can be used for document verification, biometric facial recognition, and remote verification, providing a streamlined and convenient method for customers to verify their identity. This can help businesses to prevent fraud, comply with AML (Anti-Money Laundering) and CTF (Counter-Terrorism Financing) regulations, and protect their reputation and financial stability. Moreover, AR technology has a wide range of applications across different industries, such as gaming, education, healthcare, and marketing, providing new opportunities for innovation and creativity. Overall, combining KYC and AR can help businesses create a more secure and efficient customer verification process while also providing new opportunities for customer engagement and experience.