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3 Ways In Which Artificial Intelligence Improves KYC For Your Business



3 Ways In Which Artificial Intelligence Improves KYC For Your Business

In today’s data-driven landscape, businesses need to involve artificial intelligence (AI) in KYC verification to smoothly collect and process vast swathes of customer information accurately.

With several businesses completely digitizing their operations and the forever rising ubiquity of the internet, Know Your Customer (KYC) compliance has become increasingly challenging today for organizations. KYC involves the background verification of clients to ensure that businesses meet their regulatory compliance requirements. Today, KYC has become extremely data-heavy for businesses as they expand their customer base. The usage of AI in KYC compliance and verification allows businesses to process massive amounts of data with zero error. Here are some qualities that AI brings to the KYC table:


1) Improving Transaction Monitoring

As the number of customers increases, so does the number of transactions. Major organizations need to control millions of such transactions by using AI in transaction monitoring. Active transaction monitoring is a necessity for businesses under Anti Money Laundering (AML) regulations. One of the main problems in transaction monitoring is the number of false-positive alerts generated by standard systems. False-positive alerts incorrectly flag normal transactions as fraudulent. Involving AI in KYC-based transaction verification reduces such false alerts through behavioral tracking of payers as well as past transactions.

2) Managing Regulatory Compliance

AI and NLP tools can detect patterns and anomalies in large stretches of text. This attribute allows such systems, and, by extension, the businesses implementing them, to understand and comply with circulars or massive swathes of text related to KYC and AML regulations in official documents made by governing authorities. Additionally, NLP can inform clients and businesses about regulatory changes made by such authorities and the implications of such changes on all the stakeholders.

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3) Facilitating Enhanced Due Diligence

AI-enabled enhanced due diligence allows businesses to know about potential business partnerships and business risks associated with certain customers much more accurately compared to standard customer due diligence. Enhanced due diligence enables businesses to evaluate the risk category, business relationships, and financial activities of clients with greater clarity. This gives businesses the opportunity to make better choices regarding their business partnerships.

As implied earlier, businesses need to get KYC right in order to not suffer huge losses by doing business with high-risk customers. The involvement of AI in KYC verification allows businesses to do just that by performing big data analytics of customer records, transactions and other behavioral data.

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Artificial Intelligence in the 4th Industrial Revolution



Artificial Intelligence in the 4th Industrial Revolution

Artificial intelligence is providing disruptive changes in the 4th industrial revolution (Industry 4.0) by increasing interconnectivity and smart automation.

Industry 4.0 is revolutionizing the way companies manufacture, improve and distribute their products. 

What Makes Artificial Intelligence Unique?

Artificial intelligence (AI) makes it possible for machines to learn from experience, adjust to new inputs and perform human-like tasks.

It allows computers to think and behave like humans, but at much faster speeds and with much more processing power than the human brain can produce.

AI offers advantages of new and innovative services, and the potential to improve scale, speed and accuracy. 


There are 3 types of artificial intelligence:

  • Artificial narrow intelligence (ANI), which has a narrow range of abilities.

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  • Artificial general intelligence (AGI), which is on par with human capabilities.

  • Artificial superintelligence (ASI), which is more capable than a human.


Artificial intelligence can also be classified as weak or strong. 

Weak AI refers to systems that are programmed to accomplish a wide range of problems but operate within a predetermined or pre-defined range of functions. Strong AI, on the other hand, refers to machines that exhibit human intelligence.


Artificial intelligence has several subsets:

Most AI examples that you hear about today – from chess-playing computers to self-driving cars – rely heavily on deep learning and natural language processing.

What is the Fourth Industrial Revolution?


The Fourth Industrial Revolution is the current and developing environment in which disruptive technologies and trends such as the Internet of Things (IoT), robotics, virtual reality (VR) and artificial intelligence (AI) are changing the way modern people live and work. The integration of these technologies into manufacturing practices is known as Industry 4.0. 

The first industrial revolution used water and steam power to mechanize production.

The second used electric power to create mass production.


The third used electronics and information technology to automate production.


The fourth Industrial revolution is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres, with rising emerging technologies, as real AI, Narrow AI/ML/DL, robotics, automation, materials science, energy storage, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, neurotechnology, cognitive technology, and quantum computing. It implies radical disruptions to everything, industries, jobs, works, technologies, and old human conditions. In its scale, scope, complexity, and impact, the AI transformation will be unlike anything humankind has experienced before.

The Role of Artificial Intelligence in the 4th Industrial Revolution

Artificial intelligence is making companies make the best use of practical experience, even displacing traditional labor and becoming the productive factor itself. 

It offers entirely new paths towards growth for manufacturing, service, and other industries, reshaping the world economy and bringing new opportunities for our societal development.

As AI begins to impact the workforce and automation replaces some existing skills, we’re seeing an increased need for emotional intelligence, creativity, and critical thinking.

Zvika Krieger, co-leader of the World Economic Forum’s Center for the Fourth Industrial Revolution.

Deploying AI requires a kind of reboot in the way companies think about privacy and security, As data becomes the currency of our digital lives, companies must ensure the privacy and security of customer information.

Businesses will need to ensure they have the right mix of skills in their workforce to keep pace with changing technology. 


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