ID verification solution – KYC compliance in 2020. Know Your Customer also known as KYC is the term used for due diligence practices that businesses perform for regulatory obligations. KYC practices are evolving with the changes in fraud and crime practices around the globe. It is inevitable to verify the stakeholders to ensure transparency and proactive fraud prevention on the business platform. Fraud can take multiple facets to hit businesses so performing in-depth KYC screening on the customers is one way to handle the major risk coming from the customers of a business.
Most of the businesses use ID verification to perform due diligence on their customers. But it can be performed either manually or automated through ID verification solution. The stats show that the identity verification market is expected to grow at a rate of 16% in 2020. It infers that global business entities are choosing automated KYC screening solutions over manual practices.
Frauds that can be eliminated through ID screening of customers
Below is a list of frauds and crimes that can be eliminated through the identity screening of the customers through an automated solution.
Credit card fraud in remote payments
In the case of remote and online payments, businesses need to verify their customers to ensure regulatory compliance and fraud prevention. There is no face to face connection with the online customers, so using an automated solution for verification of the customers helps in the elimination of credit card fraud. Criminals use fake or stolen ID cards and when the ID card will not be verified the criminal will be identified at the very first stage making it impossible for him to commit credit card fraud.
Account takeover fraud
It is a very common fraud committed on financial platforms. This fraud is not as simple as it sounds. It is committed for crimes as small as online shopping and as big as money laundering and terrorist financing. Placing a roadblock of online ID verification at every sign-in will reduce the risk of frauds that are committed through account takeover.
Fake identities
Criminals always try to commit crimes anonymously, so they use fake or stolen identities that are available for a few dollars on the dark web. Often merchants do not verify their customers and unknowingly assist the criminals in their felonious acts. Ultimately the merchant is left with loss and penalties of non-compliance.
How ID verification will help fight these frauds in 2020
ID verification solutions are software based on Artificial Intelligence and machine learning. Often companies outsource these solutions as per their budget. Such solutions are quite economic and deliver high-quality services with high accuracy of almost 99%. One of the major reasons why such solutions are gaining fame is that it doesn’t require hefty technical resources to use these solutions. The businesses just need to integrate an ID verification API with their current business platform – website, app, web portal, etc.
Such solutions deliver global coverage and help businesses expand without fear of onboarding criminal entities. Also, it makes verification a seamless experience for business and customers both. Such solutions can verify the identity of people from any part of the world in real-time. So it shares the KYC compliance burden of businesses.
Some of the ID verification solutions are compliant with data protection regulations and verify the identities of people aligned with the global KYC screening regulations. It shares the burden of KYC compliance and reduces the chances of losses due to imprudent usage of customer data.
To wrap up, the businesses are moving towards automation in almost every operation and ID verification solution is a feasible method for automation of customer due diligence and risk prevention operations.