During the COVID-19 pandemic, a number of businesses chose to start working digitally to improve their operations. Many industries, mainly the finance industry including banks and other sectors taking advantage of technology and manual time-taking processes are no longer a challenge for businesses. Digitizing businesses has made processes easier, and time-efficient, and made the whole process user-friendly and more convenient. On the other hand, scammers or fraudsters are also getting more experts in the new technology. Artificial Intelligence (AI) is not helping for better improvements but also it is helping criminals to threaten people in new ways, especially in banking sectors. The main target of the criminals is money, that is why they are more focused on the financial industries and banks.The question is, how can the financial industry prevent itself from being affected by criminals? Well, it is not as hard as it seems, because KYC banking is there to prevent banks.
What Does Know Your Customer (KYC) Mean?
As the global economy expands, financial institutions become more vulnerable to unlawful criminal activities. Know Your Customer (KYC), is the process persuaded by businesses/companies to verify the identity of their customers or clients with the help of legal requisites and current laws.
The extensive utilization of new technologies and the internet makes it fundamental to characterize guidelines that assist in combating online extortion/fraud. That is because the KYC verification processes act as an essential part of any kind of business that needs users to onboard as their clients/customers.
The KYC banking system, however, is not only effective in all industries but is an integral part of financial institutions and banking.
KYC Banking Helps in Scam Prevention
Terror funding, money laundering, account takeover frauds, and identity theft are some of the commonly used crimes mostly familiar to people. Due to these crimes banks have to bear huge losses because of such frauds. Fraudsters normally use tempered identities for their plan to get successful. They steal the account’s details and use them for their illicit benefits.
Battling with Money Laundering with KYC Banking
In the past few years, the growth of money laundering has increased significantly. As per the United Nations survey. Approximately 2% to 5% of the total value of world GDP which is about $800 Billion to $2000 Billion is money laundered every year. Banks must be obliged to the Anti-Money Laundering checks and KYC compliance to decrease this huge number. KYC banking checks will ensure that the customer is authentic, and fraudsters are away from banks.
Identification of Money Mules on Time
Money mules are known as brokers. They are the third party that is hired by any fraudsters or money launderers to help them with their suspicious activities without any resistance. It happens sometimes that money mules themselves don’t know they are involved in any suspicious activity. Money Launderers win the trust of the people socially. And transfer money to their accounts and ask them to send money to others’ accounts. Without having a single clue about this they became a part of their chain. Before making any transaction KYC banking verifies the customers. So that the source of money can be identified and caught money mules.
Customers’ Security
KYC banking verification ensures that all the customers’ information is fully secured on the platform. A customer cannot be protected from identity theft, chargebacks, or money-mule scams without being verified. Moreover, account takeover fraud is also at its peak, and debit card fraud is also taking over banks.
KYC/AML Regulations Compliance
Banks have a lot of hassles complying with the stringent regulations enforced by the regulatory authorities. Nonetheless, it is possible to verify your identity using a digital KYC banking solution. Digital identity verification allows banks to deal with strict laws without facing any problems.
Enhance Customer Experience
Banks were known to tough sectors for the customers in terms of their slow processes and the long time they have to bear, therefore the goal to improve customer experience is yet to be completed. However, Kyc verification process is one step toward achieving the goal of improving the customer experience. With apk KYC Banking – experts can identify the tempered identities and filter them out before they cause any dagger for the company. Improving customers’ experience is not a challenge for the banks anymore News.
Conclusion
To fight fraud, money laundering, identity theft, account takeovers, and other financial crimes. Banks and other financial institutions need to develop a robust solution. KYC Banking – is a verification that is not only for battling against criminal activities. But also ensures the best experience for the customer with the organization/bank. Using a digital identity verification solution, banks make sure and try to reduce the drop-off, for the customers. The FATF and FinCEN KYC/AML regulations will also met without issue.
