AI-Based Video Identification Shaping the Insurance Industry in 2021
By Sarah Amundsson, senior business developer at Shufti Pro.
Onboarding legitimate customers are getting complicated with every passing day since fraudsters are coming up with better ways to terrorize different industries. Hence, KYC requirements are becoming stringent across the world. For onboarding, a secure clientele base, robust identity verification is essential for businesses.
From the banking sector to the insurance industry, all businesses are prone to fraud. Insurance companies are meant to financially support companies and individuals in the long run. On the other hand, the organizations have become gold mines for fraudsters. Fraud claims, identity theft, and life insurance misrepresentation are some of the scams that are increasing with time. According to a report from Fortunly, fraud claims from insurance companies account for $80 billion every year worldwide. There is a dire need for preventing frauds in the insurance sector, and video identification can significantly help all companies in this regard. Keep reading to find out the importance of video KYC in this industry in 2021.
Video Verification – The New Normal for Insurance Companies
The regulatory bodies of different states have made it mandatory for businesses in the finance, FinTech, gambling, and insurance industry to comply with KYC regulations. For better results, video KYC has taken space in the picture. According to a report from the FBI, insurance companies lose more than $40 billion every year to frauds under non-health insurance. Hence, insurance firms must verify the clients before onboarding.
Artificial intelligence has helped the finance sector in fraud detection, seamless customer onboarding, and now, it is assisting all insurance organizations to remotely verify the clients and filter fraudsters before they cause any trouble. With the assistance of a KYC expert and artificial intelligence algorithms, insurance service providers can verify remote clients in seconds. Video verification systems include procedures that authenticate customer identities through live video calls and document verification.
Video KYC Solution – Transforming the KYC Process in the Insurance Industry
Did you know approximately four billion fraud health insurance claims are filed every year globally? Adding video verification can significantly reduce this number, not just for healthcare insurance but for all areas in the insurance sector.
The video KYC process is transforming digital identity verification, especially for insurance firms. There are numerous benefits of this advanced verification process. Some of the vital ones are discussed below.
Remote Customer Onboarding
Onboarding customers is one of the biggest challenges for insurance service providers. With KYC through video calls, it is not a challenge anymore since all companies can remotely verify end-users. All it requires is a good internet connection, all essential documents from the customer, and a KYC expert from the organization.
Speed Up the KYC Process
The traditional method for client verification requires a huge investment of time and effort. The end-users have to provide original documents, then the experts verify them with different resources like PEP lists and user-provided information. It consumes a lot of time as well as effort. On the contrary, video verification takes only a few minutes to get the right clients onboard. Speeding up the Know Your Customer process is allowing insurance companies to cater to the needs of a large number of customers.
Video Verification – A Cost-Effective Solution
Believe it or not, all companies want to save some bucks and so do insurance firms. Hiring experts, working on a convenient infrastructure, and bearing with the associated costs is a burden. Saving costs on KYC is simpler with the video process. Remote verification can save costs and enhance the efficacy of verification simultaneously.
Enhance Customer Experience
Today’s fast-moving environment does not allow anyone to wait for a long time. Working for better customer experience is essential, especially during verification. Nobody wants to wait for hours to get verified, so verification through video calls is an effective method. With video KYC, the customers have to show documents during a live video call and answer some simple questions from the KYC expert.
Video KYC solution reduces the chances of onboarding fraudsters or any other bad actors. Using fake identities and forged documents is common these days but verification on video calls eliminates the chances of fraud and your company can provide access to legitimate customers only. The KYC experts also verify the body language of the customers and AI systems detect liveness as well. Hence, security measures are robust in live verification.
Comply with KYC Requirements
Every state has some regulations defined by the regulatory authorities to prevent fraud and cybercrimes. Since the scams in the insurance sector are rapidly increasing, complying with the KYC requirements is getting tougher every day. Using a video verification system ensures a healthy clientele base and complying with the regulations becomes convenient for insurance firms.
It All Adds Up To…
Verifying customers is crucial for all insurance companies to reduce fraud in the industry. The traditional verification method is time-consuming. However, the latter method is efficient for all organizations. It is the era of digitization and using better technology is effective to improve customer experience and getting the right customers onboard. Although 95 percent of the insurance companies use anti-fraud systems, the number of scams in this sector are continually rising. A video customer identification program not only allows you to save time and cost, but it also enhances the customer experience which results in customer loyalty. If you are operating in the insurance industry, get video KYC for your company today and eliminate the chances of error in customer verification.
About the author
Sarah Amundsson is a senior business developer at Shufti Pro. Sarah leads customer-facing teams and plays a key role in driving customer goals and product utilization. As an expert in digital identity verification, she helps businesses deploy solutions globally to solve KYC, KYB and AML problems for both for individuals and businesses.
DISCLAIMER: Biometric Update’s Industry Insights are submitted content. The views expressed in this post are that of the author, and don’t necessarily reflect the views of Biometric Update.