The technological advancement brought huge growth to the payment industry but it also attracted a lot of fraudsters towards it. As per a survey, approximately 10% of the total expenses of the digital payment industry go to dealing with scam prevention. They take such measures because they want to avoid financial penalties from global watchdogs and the resulting poor brand image. KYC verification system by KYC solution provider can facilitate the financial firms in combating financial crimes and adhering to AML guidelines, as per Victor Fredung. In this way, financial institutions can strike a good balance between scam prevention and resource consumption.
What Risks Do Financial Institutions Face on a Daily Basis?
When financial organizations compromise on various security protocols due to a shortage of resources, fraudsters fully take advantage of the security gaps. Current KYC Solution Provider knows this so they offer identity verification solutions that are easily integrable into the pre-existing technologies. Such kind of advanced verification solutions can highlight identity theft and scam monetary transactions quickly. Such proactive measures have facilitated the payment industry but still, there is a long way to go.
The good news is that the latest KYC solutions are customer friendly. They are backed by artificial intelligence and machine learning algorithms (AI & ML algorithms) which streamline the identity verification procedures. The AI-backed system also cross-checks the customer profiles against global watchlists to eliminate bad actors. Previously, the customer identity verification system by KYC solution provider was time-consuming and complicated. These days, consumers can get verification even through their photos.
One important point to keep in mind is to always create a risk-based profile of customers. The latest technology will help in gaining insights into the financial transaction patterns of every client.
KYC Solution Provider and Customer Identity Verification System
When the banking sector faced fraudulent crimes, it immediately upgraded its security protocols. The banking sector must follow the upgraded AML/KYC standards for customer identity verification and risk analysis of every client. However, the payment industry has a lot of improvements to do and they must take help from a KYC solution provider.
The payment industry can also implement robust KYC solutions by a good KYC solution provider to reduce money laundering cases effectively. The KYC system should be taken from a reputable KYC solution provider or else it might not work properly. If a genuine client goes through the profile, they face no issues. Whereas if a cybercriminal tries to bypass the system, the fraud will face great obstacles and permanent rejection.
Why is Transaction Monitoring not Enough?
In this rapidly progressing world, one verification system can never be enough, according to Shahid Hanif. It means that there should be more authentication processes other than KYC verification to safeguard financial institutions from becoming a source of money laundering and terrorism financing. Companies should know that one-time verification is not adequate, there should be ongoing monitoring of clients’ transactions to detect suspicious financial exchanges promptly. The latest AI systems can help organizations in these objectives.
Payment industries see thousands of money transactions and slow/ manual monitoring procedures can never handle them. In these multiple transactions, it is impossible to highlight fraudulent exchanges with accuracy. In recent times, FinTech companies need foolproof and fast screening protocols by a credible KYC solution provider that can detect and report fraud immediately. Such robust procedures will cope with the huge volume of daily transactions as well as pinpoint suspicious exchanges in real-time.
Payment Industry: How can it be Fraud Free?
The implementation of authentication approaches by a good KYC solution provider mentioned in this article also depends upon their analyses. Every financial transaction has multiple data points that can provide insight into customer behavior and their risky transactions. Financial organizations that see no worth in fraud prevention security protocols, mostly they are the ones that pay huge financial penalties to global watchdogs. Financial institutions have to deal with a lot of money on a regular basis, so security protocols must be their number one priority no matter what. They can even secure their business operations with end-to-end encryptions.
In the case of small businesses that cannot afford the costly protocols, they can opt for other aspects of consumer identity verification for security purposes.
Finally, the rapid growth of the financial technology sector (FinTech industry) has impacted other businesses to upgrade their CDD measures using the services of a respectable KYC Solution provider. Any FinTech Industry oriented business experts should ask the following queries:
- Does my business adhere to KYC/AML regulations?
- Are the Customer Due Diligence protocols up to date?
- Does the customer onboarding process increase the conversion rate or decrease it?
- Do the above processes work across the globe with the same efficiency?
Shufti Pro is a KYC solution Provider that saves the manual effort of businesses through its advanced client identity verification process. The solution plays an active role in protecting the companies from financial penalties. The AI-backed KYC services by the KYC Solution provider uses multiple neural networks to show highly accurate outcomes.