How eKYC Works in Korea
In our previous blog we've covered both on the significance of AI-Driven OCR in ID Verification Sector and one of its key security measure: ID Liveness Detection. Today I’ll be covering eKYC, the broader category, with a focus on what it is and how it works. In particular, I'll be delving a bit deeper into how the eKYC process works slightly differently in Korea.
What is eKYC?
Before going into the details, let me define what eKYC is. eKYC(Electronic Know Your Customer) refers to the process of digitally verifying the customer's identity, typically through the following steps.
Step 1: ID Verification
- In this step, the ID Documents submitted by users go through the Liveness Detection process, and once cleared, the text data is extracted from the ID Document, which gets cross-checked against the government database.
Step 2: Face Verification
- In this stage, the photo on the ID card is compared with the selfie taken by the user(1:1 matching) to ensure the user shooting the selfie is a live human being (liveness detection).
Step 3: Proof of Address
- The necessary documents to confirm the customer's identity and residence are reviewed in this stage.
How is eKYC different in Korea?
While the general flow is pretty much the same as the process aforementioned, the Korean eKYC process typically involves two more steps just within the ID Verification Stage. What’s included in the two steps are: (1)Government-database Check and (2)Bank Account Verification.
(1)Government-database check
Government-database check system is quite straightforward, as its name suggests. In the case of ID Verification, it’s a system that checks the validity of the information on government-issued ID documents against the official records stored in government databases. While this system can be a powerful security measure, only a few countries give access to their government databases. Luckily, South Korea is one of those countries that offers such system.
This step, generally taking place after ID Liveness Check and OCR is conducted, is crucial to check whether or not the text data extracted using OCR from the ID Cards submitted by users truly matches the records on government databases. It acts as an additional layer of security alongside ID Liveness Check, to deter ID thefts.
The best part of this phase is that it happens real-time, without the need for human intervention. This allows the ID Verification system to auto-reject a user whenever the data fails to match the data recorded on government database. Hence, having this screening process in place can save time and money on operating a manual review team.
The following table lists out how the different types of ID Documents are verified against databases managed by different government organizations.
ID Type | Database | Government Ministry and Agency |
National ID Card | Government 24 | Ministry of Interior and Safety |
Driver’s License | NPA and KoROAD Databases | National Policy Agency, Korea Road Traffic Authority (KoROAD) |
Passport | Government24, HiKorea | Ministry of Foreign Affairs |
Residence Card (for non-Koreans) | HiKorea | Ministry of Justice |
(2)Bank account verification (aka 1 KRW Verification)
Bank Account Verification system, aka 1 KRW Verification in Korea is a system that checks whether or not a bank account truly belongs to the user that has submitted the bank account information. The system checks two factors: (1) it checks whether the bank account actually belongs to the user and (2) it also checks if the user actually has to access to their bank account.
The entire process is simple. The user is required to provide their bank name and account number, and with these two pieces of information, the system automatically pulls out the name of the account holder and date of birth of the account holder. Then, this information can be used to double check whether the user submitting the photo ID Card is truly person who owns the bank account.
Key Applications
How it Works
Once the information pulled from the bank name and account number provided by the user matches the the text data extracted from the user’s ID Document, the bank account verification system will send 1 KRW along with a security code in the transaction description. If the user types in the right code, the system regards that the user has access to the bank account and approves the user to proceed its onboarding process.
Key Applications
This process is useful to check the authenticity of the user’s ID, as it can help double check the validity of the text data on a photo ID Card submitted by the user, once used with the government-database check system. This system is also reliable as it pulls out the Name and DoB of the bank account holder from the Korean Open Banking System. So if either the Name or the DoB fails to match that of what is extracted from ID Cards using OCR - the ID Verification System will auto reject the user, ultimately cutting costs on manual review resources.
Who is eligible to use this system?
Every financial service provider operating in Korea is mandated to conduct Government-Database Check and 1 KRW Verification to comply with Korean regulations. If you have not yet integrated this validation process into your system or you are planning to switch to a different solution, our SaaS Solution can be a good fit for you. Our SaaS Solution, co-developed with our partner useB, is an all-in-one software suite that has pre-built UIs for all the necessary ID Verification Stages needed to comply with Korean regulations. It’s a comprehensive software that includes ID Document Liveness Check, OCR, government-database check, and 1 KRW Verification. You can decide to purchase the entire package, or integrate just a couple of the services, depending on your preference. Interested in a free demo? Contact us to learn more.