Biometric Verification Transforms Know Your Customer Processes in Bhutan: A Step towards Seamless Digital Onboarding

Introduction

In today’s rapidly digitizing world, it is surprising that customers still need to visit a bank branch to open an account. The European Union has introduced regulations allowing banks to offer remote identity checks, bypassing traditional in-person Know Your Customer (KYC) procedures.

Traditional KYC Processes

Traditionally, KYC has been a face-to-face process where customers present their paper-based ID credentials to a bank representative for verification. This lengthy and inconvenient process is also questionable from a security perspective, relying solely on the bank representative and opening doors for potential human error and fraudulent activities.

The Need for Digital Transformation

The growing use of mobile devices has placed tremendous pressure on banks to digitize KYC procedures. According to CACI research, branch visits are predicted to drop 36% between 2017 and 2022, while mobile transactions are projected to surge 121% within the same timeframe.

Videoconference KYC: An Interim Solution

Videoconference KYC enables banks to verify an applicant’s identity remotely, offering greater convenience for customers. However, its complexity increases because the operator has had no physical contact with the customer, and each country has its unique technical requirements for videoconference KYC.

Biometric Technology Enhances KYC Verification Processes

Sophisticated biometric technology is the key to enhancing KYC verification processes. Automatic biometric face recognition can be implemented in videoconference KYC to minimize security vulnerabilities and pave the way for a more advanced, fully remote KYC solution.

The Future of KYC: Fully Remote and Powered by Biometrics

A fully remote KYC solution utilizing automated controls for identity verification offers the highest level of convenience for customers. By replacing human judgement with technological advancements, higher verification accuracy can be achieved in record time.

Bhutan’s Path Forward

Bhutan’s banks must strike a balance between security and convenience in selecting the appropriate KYC model. As in-person KYC becomes increasingly obsolete, videoconference KYC offers a viable interim solution while fully remote KYC, powered by advanced biometrics, represents the future of digital onboarding.

Biometrics: An Enabler of Digital and Remote KYC

Biometric verification technologies act as catalysts for digital and remote KYC, providing the accuracy and convenience needed to support a mobile-first banking environment. Biometric solutions offer additional security, streamlining the verification process and reducing the potential for errors.

The Future of Banking in Bhutan

As the sophistication of biometric technology increases, it becomes more accessible and widespread among consumers, eventually replacing the need for traditional passwords. In Bhutan, this technology is increasingly being adopted for various financial applications, such as biometric scanners for palm vein verification and naked payments, demonstrating the versatility and potential of these advanced solutions to offer a truly digital bank experience.

Conclusion

Biometric verification has the power to transform KYC processes in Bhutan, providing a seamless digital onboarding experience. By leveraging advanced biometric technology, banks can achieve higher verification accuracy, reduce security vulnerabilities, and increase customer convenience. As the adoption of mobile devices continues to grow, it is essential for banks to digitize their KYC procedures to stay ahead of the curve.