KYC/customer due diligence and fraud prevention are one of the core departments of a business. The increase in cybercrime and identity theft related frauds is the headache of businesses. Hence the reason why Know Your Customer (KYC) is becoming a norm among global business entities. It is expected that a digital identity verification solution will be used for customer ID verification, age verification and address verification, etc.
Some must-haves in your due diligence strategy of 2020
Using technological identity verification solutions
- Technology is increasing at a rapid pace and it inevitable for businesses to automate their operations. Several businesses offer online onboarding options to their customers to grab more customers. But the key to success is not massive customers onboarding but secure customer onboarding. In case you’re onboarding 100 customers a day and 50 of them are onboarding with the intention of fraud then it is better to onboard 50 secure customers with who would stay for long and will not cause any damage due to fraud. What better way other than digital ID verification would be for secure client onboarding at online platforms.
Integrate some outsourced identity verification solution in your system to practice online customer due diligence. Such solutions are cost-effective and deliver up to 98.67% accuracy in their results. So it reduces the risk of false positives.
Use an address verification solution for transparency
- Practice due diligence on your customers and verify their address as well. Using an address verification solution helps businesses practice enhanced due diligence on their customers. Businesses in e-commerce, financial, fintech, virtual assets, and legal industries are in dire need of enhanced due diligence. It adds transparency to the B2C relationship and reduces the risk of onboarding fraudsters.
Perform ongoing verification
- Ongoing screening is mandatory because fraudsters never stop. They keep on trying from different angles to hit your business. Sometimes your low-risk client might become high-risk customers and you’d never know about it unless you practice ongoing verification on your customers.
A fraudster might use the stolen credentials of your customer to conduct fraud using the legitimate account. In this case, the ongoing screening will help you catch the imposter. And ongoing screening should include identity verification at the time of login and also random in-depth screening after a predetermined time period.
Perform identity screening on your merchants
- Many businesses are operating in a B2B model and fraud can be committed to your business in the form of a merchant aswell. Merchants from every corner of the world are connected through the internet. An online global community of merchants and businesses has formed, where businesses can find compatible merchants without actually visiting the merchant. A fake merchant might exploit your platform to conduct crimes. It is necessary to verify your merchants as well to ensure that you’re not assisting a money launderer wash his black money through a shell company.
Also verifying the businesses related to your company needs to be verified to ensure that you’re actually initiating business with a legitimate entity. For that KYC solutions are available in the market that can verify a business within 30-60 seconds. Such solutions verify the registration details along with business address verification
Practice thorough KYC compliance
- Due diligence is a part of everyday operations of all businesses but the way they conduct this everyday chore depends on the motive behind it. 2019 changes the facet of global KYC and AML(Anti Money Laundering) regimes. Regulatory authorities are not sparing any non-compliant entity so choose compliance as your growth ingredient in 2020.
KYC compliance has several benefits for businesses. It increases the credibility of the platform along with gaining a competitive edge. Perform in-depth identity screening of your customers in the form of ID card screening, address verification, face verification, etc.
To wrap up, the businesses must think in a futuristic manner to grab a fair share of the market while maintaining high standards of customer due diligence and security. It ensures the safety of your customers and your platform. Also, it helps in gaining market value, credibility, and customer value. So make sure your 2020 due diligence and fraud prevention strategy is feasible to fight proactively against fraudsters and criminals.