There was a time when opening a bank account inevitably required going to a branch, waiting in line and filling out paper documents. Now, for many services, these steps have moved to the phone screen. The technology that makes this possible is called digital identity and eKYC. In this article we explain how eKYC works, what conveniences it brings and what security and privacy issues need to be taken into account.
What is eKYC?
KYC is the "Know Your Customer" principle and refers to the process financial institutions carry out to verify a customer's identity. eKYC is the electronic, remotely conducted form of this process. Instead of going to a branch, the user verifies their document and their person through digital means. The goal remains the same — to prevent fraud and money laundering — but the method moves entirely online.
How does the process work?
A typical eKYC consists of several steps and usually takes a few minutes:
- Scanning the document: a photo of the ID card or passport is taken;
- Liveness check: a selfie or short video confirms that it is a real person;
- Comparison: the photo in the document is matched against the live image;
- Data verification: the data is matched against official registries;
- Confirmation: if there is a match, the account or service is activated.
Conveniences for the user
The clearest benefit of eKYC is saving time and distance. Opening an account, applying for a loan or signing up for a service becomes possible without going to a branch, at any time day or night. This makes financial services more accessible, especially for those who live far from a branch or have limited mobility. The automation of the process also reduces paper document flow and human error.
The security side
Remote identity verification also creates new security requirements. The system must distinguish a real person from a fraudster — which is why the liveness check is important: it tries to detect attempts to use a photo of the document or someone else's picture. At the same time, care is also needed on the user's side.
- Use only official apps, do not send documents to unknown links;
- Pay attention to network security, avoid sensitive operations on open public Wi-Fi;
- Enable two-factor authentication where possible.
Privacy matters
eKYC requires the collection of biometric and personal data — a facial image, a copy of the document, sometimes other identifiers. How this data is stored, for how long it is kept and with whom it is shared is an important question for the user. Reliable institutions are obliged to protect this data, encrypt it and keep it only for a lawful purpose. The user, in turn, should at least take a general look at the privacy terms before signing up for a service.
Conclusion
eKYC makes financial services faster and more accessible by moving identity verification from the branch to the phone screen. Although the convenience is great, protecting biometric data and using only reliable channels are of critical importance. To compare card products that can be applied for online you can look at the cards section.
