Advantages and disadvantages of eKYC (eKyc, online identity verification). Explaining identity verification that does not take time and effort - Bringing IT closer to you. softbank news
When starting a mobile phone contract or using a service, identity verification is essential to protect the user's safety. Recently, there are more and more opportunities for identity verification to be completed simply by photographing documents and faces with a smartphone.
This is called “eKYC”, and it is a method of online identity verification that has spread rapidly in the last few years. It may seem a little technical and difficult, but don't worry! In this article, we will explain in an easy-to-understand manner how to use eKYC, its advantages, and points to note regarding security.
Director of TRUSTDOCK Co., Ltd. Director of the Fintech Association of Japan. Advisor of Japan Blockchain Association. In 2001, he joined Gaiax Co., Ltd. Engaged in the management of the engineering organization. In 2019, he retired as executive officer (in charge of technology). Launched TRUSTDOCK Co., Ltd. in November 2017, carved out from Gaiax and became a director (current position). Provide identity verification (KYC/e-KYC) service. 2016 Ministry of Economy, Trade and Industry review committee member, 2017 Ministry of Internal Affairs and Communications review committee member, etc.
TRUSTDOCK Inc.
The front line of identity verification. This kind of scene is increasing now
Before explaining what eKYC is in detail, let's first look at the scenes where online identity verification is used in daily life.
For example, when making a communication contract such as a mobile phone. At Softbank, Ymobile, and LINEMO, you can select "SIM card" or "eSIM" when applying. If you want an eSIM, you will have to verify your identity online.
These days, you can get even more functionality by linking mobile money transfer and payment services to your bank account.
For example, with "PayPay", you will be able to use "PayPay Money", which allows you to withdraw money to bank accounts, etc. by performing online identity verification. Please check this out for details.
In addition to this, online identity verification is spreading in scenes such as opening bank accounts, issuing credit cards, registering for flea markets and auctions, and registering for matching apps.
“Even in sharing economy services where identity verification is not required by law, there are an increasing number of cases where business operators voluntarily verify identity from the perspective of preventing and deterring trouble. In business matching such as this, there are many cases where eKYC is introduced in order to understand who the transaction partner is and to check whether it is an anti-social force.”
How was it? Even those who didn't know the word eKYC may have had a scene where they thought, "I've done this before!" In other words, eKYC is a mechanism that makes it possible to start using the service immediately by simplifying identity verification.
According to the “Usage Trend Survey on Online Identity Verification (eKYC)” conducted in August 2021 by MMD Research Institute, a telecommunications and IT service research agency, 67.6% of the total “do not know eKYC at all”. and answered. From this result, it can be seen that there is still room for improvement in the awareness and usage of eKYC.
On the other hand, in a survey of the same name conducted by MMD Research Institute and TRUSTDOCK in July 2021, 85.2% of eKYC users said, "If it were available, I would actively use it." I will.” As a reason, the evaluation to the point that "I was able to complete it on the Internet" was conspicuous.
Explanation of “eKYC” in 1 minute
So far, we have introduced the scenes where online identity verification is used, but again, what kind of service is eKYC? ?
Originally, the term “KYC (Know Your Customer)” was used as a general term in scenes where identity verification procedures were required. This includes “identity verification,” which uses documents to confirm personal information such as name, address, date of birth, and gender, and “personal authentication,” which confirms the identity of the person working at the time and place.
Personal identification procedures are necessary to prevent crimes caused by fraudulent contracts such as impersonation. However, with KYC until now, it was common to send a copy of an identification card by mail, and it could take several days or even weeks from the time an application was submitted until the user could actually start using the service.
This is where eKYC (electronic Know Your Customer) comes in. You can verify your identity online. In November 2018, business operators began to introduce it due to the revision of the "Act on Prevention of Transfer of Criminal Proceeds"*.
A law that establishes regulations to prevent fraudulent transactions by identifying customers (companies, consumers) who are transaction partners by specified business operators such as financial institutions. In the case of non-face-to-face, it used to be necessary to send documents by mail, but in November 2018, the enforcement regulations were revised and enforced, and it is now possible to verify identity online.
eKYC is roughly divided into "browser type" and "app type". "Browser type" is a method of accessing a company's website and proceeding with the identity verification procedure on the browser. The “app type” is a method in which a dedicated app is downloaded and identity verification is performed on the app side, and the procedure can be easily proceeded with a smartphone or tablet.
In addition, there are two main types of eKYC identity verification methods. One is the "selfie upload type," which is a method in which an identity verification card with a face photo and a photo of the person in question are taken with a smartphone at the same time and uploaded to verify identity. The other is the "federation type," which is a method of verifying identity by having mobile phone companies, banks, etc. provide information that has been verified in the past.
The main things that need to be photographed during the identity verification procedure are:
Two.
In the case of the "selfie upload type", you will often be asked to take a photo of the front, back, and thickness of the identity verification document. In order to prevent spoofing, images taken in advance cannot be used and must be taken using an application provided by the operator.
An example of identity verification for "selfie upload type" (for "PayPay")
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