eKYC to Prevent Loan Scams via Mobile Apps

Borrowing money via apps is a form of fast lending through applications installed on mobile phones, where all procedures are conducted via the Internet—from account registration, approval, to disbursement. Borrowers only need to create an account on the app and request a loan online; once approved, the funds will be transferred to their bank account.

For online lending, verifying borrower information becomes much more difficult. Many individuals have engaged in fraudulent activities such as forging personal documents (eID, ID cards, driver’s licenses), financial statements, etc., to borrow money from apps and then default. In reality, banks and lending institutions have lost a significant amount of money due to bad debts from online lending. This is the main reason why many banks have yet to promote this lending model due to concerns in verifying borrower identities.

Applying eKYC in app-based lending.

Faced with this challenge, eKYC is applied to instantly identify and verify the identity of loan applicants, thereby increasing the successful customer conversion rate. The entire process takes less than 5 minutes to register and start using the service.

Customers will go through the following verification process:

Step 1: The customer enters the required personal information on the app, then selects a document for identity verification. Documents may include: passport, driver’s license, or identity card…

Step 2: All customer information will be automatically extracted using OCR (Optical Character Recognition) technology, and the customer can review and edit it. Next, the customer is required to be verified using a selfie or selfie video.

Step 3: If the Liveness Detection technology (which prevents identity theft through biometric confirmation) and Face Matching technology (identity verification using facial recognition) confirm that the selfie video matches the image on the submitted document, the verification is successful. If not, the customer will need to repeat the authentication process.

The eKYC verification process becomes increasingly automated with the support of Artificial Intelligence (AI). Any attempt to falsify personal information or use fake accounts for borrowing can be detected in real-time. This contributes to enhancing customer trust in digital banking services.

SmartKYC is one of the leading electronic identity verification solutions, researched and developed by GMO-Z.com RUNSYSTEM, based on Artificial Intelligence (AI). SmartKYC features numerous outstanding capabilities compared to other market solutions: OCR accuracy up to 99%; Fraud Check capable of detecting nearly 30 types of document and facial forgeries; and Face Matching with a time span of up to 15 years, meeting high requirements for banking operations and security.

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Smart Solutions – Digital Transformation Solutions Ecosystem

Digital Transformation Division of GMO-Z.com RUNSYSTEM

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