At a time when fraud is on an all-time high, the requirement for KYC or Know Your Customer based measures is also equally that high. More and more businesses are adapting to the digital space, to cater to the massive influx of people shifting towards an online presence. Where earlier, the global internet was purposed for just static information reading. Today that very internet is a hub for global information sharing, digital transactions, corporate setups, and large scale financial services.
As businesses establish grip of their business activities on the digital space, more versatile use-case and industry applications are being witnessed on a daily basis. Where every day is a challenge for these businesses to onboard customers. As momentum builds-up towards digital purchases and relevant information sharing, these businesses need to vet their clients for authenticity through KYC before on-boarding.
How KYC Improves Security Businesses
Automation has allowed businesses to more potential customers than regular foot traffic could ever achieve. As this global phenomenon of e-commerce took over, a threat was witnessed that could potentially cripple digital businesses – fraud. Fraud consists of many different types that include Identity fraud, document fraud, financial fraud, and many others. However, the crucial aspect that has digital businesses at a disadvantage is the individual is not physically present. This is exploited by potential fraudsters as a mechanism to commit illicit activities through one of the fraud kinds mentioned earlier.
In order for businesses to know who their customers are and ensure they onboard who they say they are. Businesses employ measures of KYC – Know Your Customer to ensure the identity and validity of the individual in question. This allows a business to validate through the identity particulars of an individual and check for fraud there, in addition to a photograph of the customer which is compared live to the one present on an identification document. This prevents businesses from onboarding the wrong individual and also authenticate payments through proper pictorial representation. In the process reducing the likelihood of fraud happening from the person and restricting the potentially doubtful individual that could cause financial and reputational damages to the business.
Regulatory Requirement for KYC Implementation
Businesses from the financial sector cannot continue operations without implementing necessary KYC and AML measures for mandatory due diligence purposes. KYC and AML implementation allow a business entity to address their respective risk concerns, placing it from an individual specific perspective. Including their type, transacting amount, business and customer profile in addition to their standard KYC. These measures allow large corporate businesses with digital setups to operate in accordance with local and global anti-money laundering regulations for risk-free operations.
KYC and AML measures are a mandatory business process to include in a range of business types. The failure to implement such measures would lead to reduced or entirely restricted operations in addition to legal, financial and reputational repercussions. Providers like Shufti Pro offer the necessary global coverage in more than 200+ country documents and languages respectively. With results delivers in industry best times of 30-60 seconds.
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