ID Verification in Banks and Financial Firms – An Absolute Necessity

Most Commented Posts

The concept of finance is not new but the term “financial services” has become popular in the 1990s. Digitization has totally transformed banking and financial firms compared to what they were a few years back. As businesses go online, they become a breeding ground for cybercriminals. ID verification has become an integral part of the digital financial landscape. 

Identity verification is a procedure that checks there is an authentic individual behind a process and they are actually those who they are supposed to be. The identity verification service provides financial firms with two benefits; combatting fraud by verifying identity and preventing the firm from paying hefty fines due to non-compliance with the KYC and AMNL guidelines.

Issues in the Financial Sector

Credit unions, banks, insurance providers, etc, all come under financial sectors. The wave of digitization which helps sectors enhance their customer experience and products also has become a breeding ground for scammers to break into the financial sector and exploit them to out evil activities. 

  1. Cybercrime

Cybercriminals have taken the advantage of digitization. They have just revised their methodologies to bypass modern verification systems and exploit banks and other sectors through heinous crimes. As per the Bitglass report, 62% of data breaches occurred in the financial sector alone in the year 2019. Malware attacks and hacking has become major source of data breaches. And as every business has almost gone online, fraudsters are completely focusing on banks and other financial sectors to carry out illicit purposes. 

  1. Regulations 

Digital investment and financial firms like online banking, crypto exchanges, and others are a great target of money laundering and other organized crimes. This is the reason why KYC and AML regulations are continuously evolving and amending to meet the changing financial landscape. Unfortunately, many financial firms and other sectors fail to adhere to global regulations due to the ineffective technologies they use. 

  1. Identity Thefts

Another great issue faced by the financial sector is identity theft. Scammers are becoming smarter and they use sophisticated methodologies to steal IDs or create fake identities and bypass the verification systems. The most popularly carried out synthetic identity fraud is stealing the details of someone’s identity card and then purchasing services and goods without their permission. Moreover, scammers also make use of the stolen personally identifiable information of an individual to either open new bank accounts or apply for credit cards and financial loans illegitimately.

How Identity Verification Benefits Financial Sector

In this digitized age where cybercriminals are badly exploiting companies and the financial sector, online identity verification has become an absolute necessity. All the sectors are under a great threat of data breaches, account takeovers, money laundering, identity theft, terrorism funding, etc. This has made identity verification services an absolute need of the modern era. 

  1. KYC and AML Compliance

Banks and all financial firms are mandated to adhere to KYC/AML guidelines. To better comply with the evolving KYC/AML directives, companies should understand who they are going to deal with. Thus, advanced Identity authentication services not only help the sector to avoid sophisticated fraud but also make them comply with the global regulations and build a great reputation in the market. 

  1. Reduce Fraud

One of the greatest benefits of identity theft protection solutions is to prevent all kinds of organized crimes. It helps banks to validate an individual during onboarding to make business fraud-free. Moreover, it enhances customer experience as they feel satisfied using the platform that has a robust biometrics identity verification system in place. The customers would talk about the company with their colleagues and friends, promoting its positive image which helps it to reach greater heights. 

  1. Minimize Operational Costs

Verifying the documents manually and then cross-checking clients with their identity documents takes much time, resources, and effort. Thus, with advanced ID verification services, the sector could minimize its operational costs. They are not required to invest in manpower to conduct verification as it can be done with advanced ID verification services that are error-prone. 

Final Thoughts

Digitization has no doubt helped businesses to conduct their operations online but also has made companies vulnerable to different kinds of heinous crimes. This is why companies are now in dire need of such a solution that could protect the company’s and its clients’ data. Thus, ID verification is a great bet in this regard. It not offers business superior security but also make them adhere to the global KYC/AML regulations.

Most Commented Posts

Related Posts