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What Is meant by Know Your Customer (KYC) and why is it important?

Know Your Customer

In the absence of official identification verification, several industries have adopted Know Your Customer (KYC) to identify their customers and minimize risks. The KYC protocols require clients to submit evidence of identity and residency before using certain services.

Identity verification has grown in popularity among business leaders for conducting customer onboarding, combating fraud, and enhancing customer engagement in various sectors over the last several years. Identity verification is becoming increasingly important in the telecom sector, a trillion-dollar industry that provides voice, text, video, and internet data services. Managing data efficiently while using digital techniques to improve accuracy in such an enormous industry is critical.

Service providers are placing great importance on combating cybercrimes and fraud as digitization spreads across industries. Telecommunication companies, in many ways, are linked to critical services such as finance, health, and others; thus, identification verification is required.

The telecom industry is required to acquire personal information about their mobile customers in more than 85% of countries worldwide. As a result, governments all over the world recognize the need for KYC procedures in the telecommunications industry because of their ability to verify that the registered person “is who they say they are.”

The Rise of Digital Know Your Customer

The telecommunications industry is increasing it’s KYC and onboarding processes through STIR/SHAKEN, which aims to increase transparency around the caller’s identity every time the phone rings. STIR/SHAKEN prevents unlawful “spoofing” or the hi-jacking of phone numbers through data encryption and tokenization, which verifies that the phone number that is dialing the call (caller ID) belongs to the user of record. 

Digital KYC leads to better decision-making and improved risk management. The process is secure, scalable, and easy to use for both providers and consumers looking to become verified.

The industry as a whole needs identity verification that’s more secure than current methods like static passwords or SMS OTP (one-time-password). Digital identity verification requires the ability to access information with ease from various sources without compromising security.

Digital KYC for Transparent, Positive Customer Experiences

Digital KYC helps service providers create a positive and transparent customer experience. Instead of manually collecting and verifying data, digital KYC allows them to quickly and reliably access identity and residency information instantly.

Another benefit of this technology is the improved ability for telecommunications companies to assess risk more accurately. Ensuring that phone calls being made are from the actual individual or entity making the call detects potential fraud early on in the form of “red flags” such as fraudulent activity or suspicious behavior. Digital KYC enables a service provider to meet their customers’ unique data capture needs, from initial onboarding through the complete customer lifecycle.

Simple USSD or more advanced methods (dedicated data capture devices, mobile applications, or web portals) are used to provide electronic KYC services. The KYC process digitization allows telecoms to serve remote clientele and considerably increases the quality and efficiency of the whole process.

Signalmash Know Your Customer Solutions for Service Providers

Signalmash KYC solutions offer seamless onboarding for new subscribers, with customizable options that may be integrated with any legacy or third-party system for rapid deployment. 

In line with the U.S. ‘s changing compliance and regulatory frameworks, Signalmash began offering STIR/SHAKEN attestation in 2020. We pass the STIR/SHAKEN verification level for calls through the Voice API, as part of webhook requests to various URLs — hangup_url, fallback_url, answer_url, etc. You can check verification levels in Call Detail Reports on the Signalmash console.

We’ve built interoperability natively into our network to assist our customers in fulfilling STIR/SHAKEN compliance standards. Signalmash can help you streamline your STIR/SHAKEN attestation and authentication, allowing for the most efficient processing. We help our clients meet the requirements of the TRACED Act by providing complete STIR/SHAKEN compliance for our telecom infrastructure and CPaaS solution. Contact us today and learn more about our validation processes.

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