What is OTP? Is it required for e-KYC?

Online data is today’s main “currency”. You may ask “why is that?” and the answer is more simple than you would think. See, if a product or a service does not cost actual money, it is most likely that it will require your personal information.

That is if the service does not require both. Since most people trade their personal data for being online customers, you need to take good measures, so that you can collect and manage it safely.

That is where e-KYC comes in. You may encounter situations when you will be provided with an OTP (One-Time Password), for that e-KYC process. But let’s start it all from the beginning and walk you through some great questions that are answered in this article. First of all, …

What is e-KYC?

e-KYC is a process that electronically verifies your personal details and identity photo by using biometric authentication, like fingerprint scanning.

This type of procedure is mandatory for all bank accounts and mutual fund investments, as well as for other types of businesses, from the medical insurance or crypto field.

“Know your client” systems are implemented so that client onboarding procedures can run smoothly, and the company can ensure a “no frauds” policy.

What is an OTP?

One-time password (OTP) is a randomly generated series of characters that allows a user to access a single account or transaction.

A one-time password is more secure than a static password for several reasons. Most notably, a user-created password can be weak and/or reused across multiple accounts.

OTPs are an additional measure of security that can be used in place or alongside other authentication login information.

How to get an OTP?

When an unauthorized person tries to enter a system or do something on a device, the network server has an authentication manager that creates numbers or secret code. This is done by using one-time password algorithms.

The security token on the device uses the same number and algorithm to match and validate the one-time password and user. As a second authentication factor, many companies opt to use SMS, in order to provide a temporary passcode via text.

After a user input their username and password on any website or transaction-related application, they will receive a passcode via text message to further confirm their identity. Two-factor authentication requires the user to input his user ID, password and temporary passcode to access an account or system.

What are the benefits of an OTP?

Common issues that IT administrators and security managers face with password security can be fixed by using a one-time password.

With this type of software, users do not have to concern themselves with creating secure passwords, sharing login information, or using the same password for multiple accounts.

Another advantage of one-time passwords is that they become invalid within minutes, which prevents attackers from being able to reuse the secret codes.

Do you want to learn more about KYC and AML measures? Visit Qoobiss.com, access our “Industries” section and choose the industry that you work in. If you have further questions, we are here to help you!