What is KYE? A Guide to Automating Employee Verification

After the COVID-19 pandemic, many companies have adopted remote recruitment practices. According to Forbes, the trend of remote work is expected to continue, with an estimated 32.6 million Americans set to be working remotely by 2025. This shift towards remote employment has brought various advantages for both employees and employers, including increased flexibility and cost savings.

Nonetheless, the physical distance between companies and their employees has given rise to specific challenges, with an uptick in employee theft being one of them. To counteract fraudulent activities and maintain a secure work environment, businesses must incorporate KYE (Know Your Employee) practices. 

The main point of this approach is the verification of employees’ identities, a critical component of the solution. However, the expanding remote workforce has presented businesses with heightened complexities in executing manual KYE processes.

In this blog post, we’ll discuss the importance of KYE, highlight some of its use cases, and offer insights on how to use automation to get it done with ease.

What is Know Your Employee (KYE)?

Know Your Employee (KYE) is a process businesses use to verify the identities and backgrounds of employees, ensuring accuracy, preventing fraud, and meeting compliance requirements during hiring, onboarding, and throughout employment.

This is essential for all businesses but it is especially important in sectors where trust and security are of the foremost importance, such as financial services, healthcare, and technology.

Why is KYE important?

Knowing your employees is an essential aspect of managing a successful growing business. The new employee’s life cycle begins with the application process, continues through hiring, and encompasses their career journey within the company. Therefore, you need to minimize any risk when establishing a work relationship.

Integrating identity verification into your hiring process helps you reduce risks like falling into ID fraud, or compromising data of your company. KYE is important for a business for several reasons, including:

• Verifying employees’ identities to ensure that employees are who they claim to be and prevent employment theft.
• Providing access to confidential information from the company and clients to legitimate individuals.
• Complying with regulations as KYE is a legal requirement in industries like healthcare or finance.
• Implementing KYE policies can streamline various business processes, such as access control, asset protection, and compliance reporting.

Furthermore, KYE brings the benefits of having a positive employee experience from the beginning, building trust and a strong relationship. Let’s now see what KYE processes can look like.

Use Cases for KYE

Remote Onboarding

During the remote onboarding process, employees are often asked to provide scanned copies of their identity documents like IDs, passports, or driver’s licenses. Employers can use specialized identity verification software or services to extract and validate information from these documents. The HR department can also compare the provided and verified document with any other government-issued documents, such as employment authorization cards.

Authentication of Existing Employees

Some organizations may also incorporate biometric identity verification as part of KYE. This involves capturing biometric data, such as facial recognition or fingerprints, to verify the individual’s identity matching previous information in their own database. Remote employees can use their smartphones or webcams for this purpose, and the collected biometric data is compared to pre-registered records for verification. After the identity is verified, the employee will get access to the requested area. 

The Challenges of Manual KYE Processes

Before signing a contract, there are certain things that HR must verify from the newly hired employee. In the United States, for instance, identity verification is a mandatory requirement. Therefore, official employee ID documents, such as the SSN or I-9 forms, can be requested. Once these documents are obtained, HR needs to manually check the authenticity of the documents and enter the data into their system. However, this manual process creates several issues:

• Bad quality pictures: If the quality of the picture is poor, HR needs to go back and forth with the new hire, which can create a negative first impression and frustration.
• Difficulty in detecting fraud: Sometimes it can be challenging to detect fraudulent documents with the naked eye. Fraudsters have become so sophisticated that it is easy to overlook fraudulent documents.
• Failure to delete the picture after verification: Companies are not allowed to store the picture on an ID due to privacy regulations. However, this can easily be forgotten, leading to a picture being stored for a while.

Now that we have seen the issues associated with manual processing of data, let’s explore how automation can help to overcome these challenges.

How Automation Simplifies KYE

Nowadays, more and more companies are utilizing software to automate identity verification processes. They can verify and authenticate both documents and biometric features.

Let’s explore how automation simplifies two critical aspects of KYE:

Automating ID Document Verification

When using automation for new hires, they would need to provide pictures of their ID documents. 

1. They can take pictures themselves using their mobile phones if they use the verification app or upload a picture of the document from their desktop. The software will give feedback immediately, such as “conditions too dark,” etc. You can then ensure that the picture is perfect for verification. 
2. After capturing the picture, the software using OCR will extract the data, convert it to JSON, and verify the documents with AI. 
3. After this process, the extracted information will be saved in your company’s system. In a few minutes, your new employees’ identities will be verified.

Automating Employee Authentication with Biometric Verification

There is certain information that the company does not want to share with everyone. To protect sensitive company information, passwords can be used, but an even more secure method is to use biometric verification. This involves recognizing the unique physical traits of the employee, which will ensure that only the right person has access to confidential data. During the verification process, the software will ask the employee to perform some random movements to ensure that a picture is being taken in real-time. Using biometric verification will guarantee that private data remains secure.

Automation can be used and integrated easily into your process and can help you considerably with document verification. Discover in the next section, all the benefits you can expect from automated identity verification.

Benefits of Automating Your KYE Process

Here are some reasons why HR departments should consider automating their employee identity verification processes:

• Focus on meaningful tasks for HR: Eliminate manual data entry and verification tasks, freeing up HR employees to focus on finding recruits and taking care of existing employees.
• Create a positive impression for new hires: Streamline the onboarding process by providing clear instructions for identity verification, reducing confusion and stress for new employees.
• Prevent manual errors: Automated identity verification helps avoid errors in contact and bank data, reducing the likelihood of future issues.
• Avoid employment identity theft: Automated identity verification ensures that the person being hired is who they claim to be, reducing the risk of identity theft.
• Prevent fraud: By ensuring that employees are who they say they are, companies can reduce the risk of fraud and protect confidential company information.
• Increase efficiency for large organizations: For organizations that onboard multiple employees each month, automated identity verification can save significant time and resources.
• Compliance with GDPR: Automated identity verification helps ensure that employee data is handled securely and in compliance with GDPR, protecting the privacy and security of employees’ personal information.

Pretty straightforward right? Now, keep on reading as we are going to introduce you to the software that can be just right for your company’s needs.

How Klippa Streamlines Your KYE process

Klippa’s automated identity verification makes KYE seamless, secure, and efficient. Here’s exactly how Klippa can help your business verify employee identities digitally and ensure compliance at every step:

1. Start the Process
Employees begin by providing personal information, like their name, date of birth, and address via a secure app or web platform.

2. Capture Identity Documents
If document verification is part of the process, employees capture a photo or scan of their ID document using their smartphone camera, webcam, or by uploading an existing file. Klippa provides real-time feedback to ensure the image quality is suitable for verification.

3. Optional NFC Scan
If the ID has an NFC chip, employees can scan it with their phones for added security and authenticity.

4. Extract and Check Data
Klippa extracts key information from the document using AI-powered OCR and checks it for fraud or tampering.

5. Verify Biometrics (Optional)
For added security, employees can take a live selfie. Klippa ensures it’s real with liveness detection by asking for random actions like blinking or nodding.

6. Compare and Confirm
Klippa matches the document data and biometric information with the details provided, ensuring everything aligns.

7. Get the Results
The system generates a verification result in seconds:

• If approved, the employee moves forward with onboarding or gains access.
• If flagged, HR gets notified for further review.

Contact Klippa Today

Klippa’s automated identity verification solution can greatly assist your HR department in verifying the identities of new employees. Within just a few minutes, Klippa can extract, convert, and classify various documents. With Klippa, new hires can verify their identities themselves by following a few simple steps.

In summary, Klippa’s identity verification software can:

• Verify the authenticity of official identity documents
• Prevent fraud using advanced AI technology
• Provide secure access to only your employees through biometric verification
• Comply with GDPR by masking private data and not saving it
• Extract all information from both ID documents and other HR-related documents

If you’re interested in learning more about how Klippa can help your business, feel free to get in touch with us or book a free online demo below.

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