There has been a massive change in customer onboarding and field verification processes in the past few years. Customer profile validation is an important part of easy onboarding and ensures the customer has a clean profile. Also called Customer Due Diligence, it is the procedure for gathering and confirming customer information. It includes the client’s name, address, and other private information.
When creating a business partnership, companies must perform CDD or field verification. For instance, a bank or trading platform might need to look up the person’s passport before allowing a consumer to open an account and make a deposit. In this article, we will check how profile validation/field verification is performed in the banking industry. But before that, let us check on customer profile validation.
The bank performs credit card, KYC, and retail asset product validation. It is the critical stage of the product development process.
The process helps to examine customer problems, the target market, and the banking product. After the validation process, the product can be iterated upon to discover the ideal market fit. Additionally, validation links the product with potential customers and paves the way for developing useful items consumers desire and need. These products include personal loans, auto loans, business loans, education loans, commercial vehicle loans, loans secured by real estate or mortgages, and home loans.
A vital step in a financial institution’s risk and credit approval procedure is field verification, also referred as contact point verification (CPV), background verification (BV), or field verification (FV). It enables the independent verification of important details about current or potential customers through in-person visits and other necessary due diligence procedures before establishing a banking or lending relationship.
The process of field verification should happen as early as possible in the banking system before a product team spends a lot of time and money developing a new product, of course. Your theory doesn’t need to be accurate. It only needs to be specific enough for you to know who you might want to talk to, what difficulties they could be having, and how your product might be able to help.
Since we have covered what customer profile validation means and why it is important, let us check the steps involved in doing the job perfectly.
The first step in customer due diligence is gathering basic details about the client. Whether this customer is an individual or a business will determine the necessary list of data.
Depending on the jurisdiction, you may need other details, but the following provides a standard starting point for identifying people:
Field verification isn’t limited to customers only; banks also need to do company verification. Businesses must ask for and confirm specific information before partnering with other organizations. While the detailed list can vary between jurisdictions, the following is a common starting point:
The objective of taking these steps is to learn about the company’s beneficial owners. These people control over 25% of the corporation, directly or indirectly, or through other means. It is important to verify beneficial owners after being found.
Banks usually demand certified copies of the paperwork confirming the company’s legal foundation and the records showing all shareholders before lending over the loan or opening an account.
Banks can select between regular, enhanced, and simplified due diligence depending on the customer. For instance, a bank can still onboard a customer if it knows they are a public official (a PEP), but an extra check is required.
Fraudsters have been known to send legitimate documents and even dark net selfies. Since there hasn’t been any document tampering in this instance, even the most trustworthy verification systems won’t find anything odd. Businesses can add a second facial biometric check-called liveness to prevent thieves from onboarding clients remotely. This check guarantees that the identity of the genuine document holder is verified.
Let us check some things the individual should know while conducting customer profile validation:
Mark the field under “Mandatory,” preventing it from being left empty. A star (*) symbol will appear next to the field name and any required fields. Incomplete “mandatory” fields prevent managers of content from saving entries.
Unique marking helps in preventing the duplication of the content in the document. The validator will ask the user to alter the duplicate value each time they enter a previously entered value into a field that is meant to be unique.
Setting up the character restriction will ensure that users only enter the text that fits inside the field’s maximum or minimum character limit. For instance, if you wish to add a “Password” field to your website, you should specify the limit for the cell. The number of characters validation criterion is useful in this situation.
Also known as data validation, different procedures ensure all the data included is accurate. Some of the types of data validation are:
In this type, it is checked if the right data type is included in the document. If so, the system should reject any data that includes additional characters, such as letters or special symbols. A field, for instance, might only accept numerical information.
A code check verifies that a field is chosen from an acceptable list of values or that it adheres to specific formatting guidelines. For instance, comparing a postal code to a list of legitimate codes makes it simpler to confirm if it is valid. Another element is the country code.
Numerous data kinds adhere to a predetermined format. Date columns with a set format, such as “YYYY-MM-DD” or “DD-MM-YYYY,” are frequent use cases. Maintaining consistency over time and across data is made easier by a data validation process that ensures dates are formatted correctly.
A logical check verifies that the data entered is logically consistent. An illustration is determining whether the delivery date for a package is later than the shipment date.
MIMOIQ is the leading on-demand customer validation and last-mile delivery service in India. We undertake a complete tech-enabled customer validation service, concentrating on different cities from Tier 1 to Tier 4.
To ensure data validity, we employ skilled task associates and real-time monitoring technology, including geo-tagging, quality management, and real-time data transfer. Our service is not limited to customer profile verification but we offer document collection and verification services to NDFC and top banks in India.
The banking industry keeps updating its data on customers to ensure there is no fraudulent activity in the process. KYC, or customer profile validation, is now part of the customer onboarding process by banks. If you are entering the banking industry or financial services, then learning about field verification is a part of your job.
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