In today’s dangerous and fast-moving world, dirty money is a recipe for major trouble. No business that wants to avoid hefty fines or a bad reputation can risk dealing with funds that are associated with fraud, terrorism or money laundering. A key preventive step is having an effective system in place to verify the identity of customers or clients.
How do you know someone is who they say they are? How do you answer this question when your customer is not even sitting next to you? To help answer all these queries instant user identity verification are here with intending to prevent terrorist financing, identity theft, data breach, online fraud, and money laundering.
Digital Identity Verification: A Cost-Effective Process:
According to newresearch from Mitek and Consult Hyperion, digitizing identity verification with biometrics and other technologies could save a typical bank of €10 million a year. The cost of KYC compliance for banks as risen to €50 million a year with rising fines, while customer abandonment could also cost banks €150 million in the next five years. So digital identity verification can save banks a lot of money and time.
The report, The Cost of Compliance and How to Reduce It, found that following new EU Anti-Money Laundering (AML4/5) and Counter-Terrorist Financing (CTF) rules extending the scope of KYC requirements, the annual cost of punitive non-compliance fines has risen to €3.5 million.
Financial Institutes & Identity Verification:
Banks and other financial institutes are highly reliant on digital identity verification to fulfill their KYC requirements by saving both time and money. The KYC and AML regulation are tightened up for banks and other financial institutions making it compulsory for banks to have reliable identity verification for its clients. The risk of reputational loss, losing the license to operate, and even personal liability of senior management are also increasingly significant for banks who get KYC wrong.
It is the utmost responsibility of banks to ensure that they have the right services to ensure that the identities of all the applicants are verified and authentic. So banks are heavily reliant on identity proofing and without them, banks would be suffering a lot because of heavy fines that they will be made to pay by their regulators. Instant identity verification services offer a win-win situation for banks as well as their customers. On one hand, there are AI-based identity verification services that have automated the entire process for the convenience of banking customers. While on the other hand, the banking industry can perform KYC verification of their customers through services as address verification, biometric facial identification, document verification, etc to mitigate credit card fraud and other financial scams.
Identity theft and digital scam cases are clamping up with every passing day. With no hesitation, it is obvious that financial institutes are on cybercriminals’ major targets. So digital identity verification has eased the procedure of KYC for banks as well as mitigates the risk of digital scams ensuring security for both clients and financial institutes.