Consequences Of Hiring The Wrong Person

Onboarding customers you never really saw could foster few challenges for your organization. One of these challenges without a doubt is identity verification. It’s a process to verify the identities of your customers. Incorporating few verification methods into your system could keep fraudsters and threats at bay. But do you think that it’s enough? The awful reality is that keeping up with traditional verification methods isn’t enough? So how should you protect your business and customers?

The fraudsters are not taking any time out and you shouldn’t either. It’s important to run a step-by-step verification method and avoid losing money. You should know what comes first in the verification process. Then putting up extra layers of authentication could drive bad apples out of your system quite sooner than you may realize.

More importantly, most customers don’t come on board if they happen to go through a long verification process. So losing money before you could make it becomes a nerve-racking reality. Therefore, relying on old and slow tactics of customer verification, such as 2-Factor authentication or KBA authentication could hardly make your business go ahead.

Therefore, your primary focus should be to track people’s behavior, keeping a long database, integrating blockchain, reading facial movements, liveness detection of person’s faces, etc.

But here is how you should follow along with identity verification with these tried and tested methods:

Step 1: KYC (Know Your Customer)

KYC or Know Your Customer is a process that financial institutions use to verify their customer’s identities and addresses. The process helps organizations to ensure that they are onboarding the right people as their customers. In most cases, it’s also used to identify if the services of a company are being misused or used illegally. The KYC procedure is completed by the organization itself or through a third-party vendor while opening a new account.

However, KYC (Know Your Customer) is the most important factor but in reality, most organizations misunderstand it. Most companies think that KYC works the same in each organization.

What Companies Misunderstand About KYC

1. KYC is The Same For All Businesses:

Each company has different business models and not to mention different customer bases and partners. Therefore, there is no single approach to KYC that all organizations can follow.

1. Automating Entire KYC Process:

It’s widely believed that an entire KYC process can be automated. It’s true for some parts of KYC. Because in reality, KYC is not a single method of verification but it’s a parent term that is used for several different ways of verification. However, organizations would still require humans to check KYC compliance, work with different tools, and check out any inconsistencies.

1. Checking KYC Compliance:

Most people believe KYC compliance is nothing more than a checkmate. It could result in heavy penalties, fines, or jail time if it’s not taken seriously. KYC compliance requires companies to comply with the rules and regulations of their country. Not only should it be given the respect it deserves but more importantly it keeps you secure and provides peace of mind.

1. Checking With Google For Customer Verification:

You could eventually run out of luck if you believe a little google research on a customer’s background is enough to onboard a customer. Without going through a PEP or other watchlists to verify the background of your customers could be quite painful. It would also create friction in the customer experience.

It’s best to Rely on Third-party solution providers that could provide you with KYC and AML background screening.

STEP 2: Incorporating Different KYC Verification Methods:

  • Face Recognition:

It’s used to verify customers remotely and encompasses liveness detection, 3D depth perception, anti-spoofing check, fake image detection, AI mapping for face verification.

  • Document Verification:

It is used by organizations to verify a customer’s identity by taking a real-time screenshot of their face and comparing it with the picture on identity documents.

  • Address Verification:

It determines the authenticity of a person against an ID document. Most organizations ask for different documents for verification, such as ID card, passport, utility bill, bank statement, etc.

  • 2-Factor Authentication:

It uses a personalized code to identify a user as real or fake.

STEP 3: Background AML Screening

This is the third most important step while verifying a customer. People who have a criminal background and run money laundering activities could be verified against several watchlists that are updated after a few hours.

Money launderers could give a significant blow to the organizations that are being used to launder money. Most B2B businesses should check their customers through AML screening.

In a few cases, your B2B client could have a company with several millions or billions of dollars in monetary value. But your client could be operating a shell company without a real address or assets to show.

Combine KYC verification and AML screening to ensure a seamless customer onboarding experience and keep track of their criminal record.

STEP 4: Biometric Authentication

Most companies have incorporated biometric authentication to verify a user’s identity through fingerprint scanning, eye or iris scanning, palm print scanning, etc. Ascertain human features are unique, so the password becomes almost uncrackable. Due to the difficulty, it might pose to the fraudsters, biometric authentication is used at sensitive sites that require high surveillance.

It’s always a good idea to have experts or third-party vendors on your side that can help you with integrating identity verification solutions. Although, by following these steps, businesses can protect their identity and achieve a strong customer base that people would return to. It would also help organizations to fight risks or threats that come with consumer onboarding.