The legal requirements of GDPR and compliance are getting stricter every day due to increasing fraud. The need for digital identity grows as regulatory compliance becomes mandatory. KYC’s digital solutions have become essential for managing financial data and identifying individuals. Businesses have to handle massive amounts of data, so it is necessary to keep it secure and address the risk of data breaches and other cybercrime.
Identity verification solutions are used for risk analysis and security management to mitigate potential threats to businesses. Such a solution should be integrated into the system to erase the negative impact on businesses and prevent them from falling into the abyss of fraudsters.
It is said that 2019 was the year of data breaches. Even in 2020, cybercrime is increasing day by day. Because of the Covid-19 pandemic, crooks have come up with new ways to trick the system and trick people. Digital identity verification solutions such as 2FA, document verification, age checks, biometric verification are therefore necessary to combat fraudsters. Digital solutions play a crucial role in curbing the spread of the virus and keeping a social distance, as a person’s identity can be verified online. KYC, contactless biometric solutions, and digital document verification technologies are on the rise.
Reasons why identity verification will no longer be necessary for 2021:
These are the reasons why this technology is needed more than ever this year:
The contactless solution to control the virus:
We all know that the coronavirus pandemic has turned the world upside down. Business is ingrained and people are forced to stay at home. During this time, businesses have to operate online, so the likelihood of fraud is higher. Digital identity verification solutions such as eKYC and biometric technology provide a contactless solution to meet the regulatory needs of KYC and AML. Thanks to the digital verification of documents using OCR technology, data can be extracted and verified, which a tedious process, when done manually, is and which also explains the spread of the coronavirus.
Increase in Cybercrime amid Coronavirus:
Online fraud attempts are increasing during COVID-19. Identity verification solutions play an essential role in coping with new cybercrime strategies. Identity verification solutions play a critical role in identifying and processing high-risk customers and curbing them early before they can damage the case.
Guide to FATF Digital Identification Systems – Strict Regulations:
A global regulatory body, the FATF, makes recommendations on AML and CFT (Counter Financing of Terrorism) to member states. This is a historic change in the evolution of the identity verification industry. Regulatory laws for compliance with KYC and AML will be stricter. To contain the rise in crime rates that is devastating for financial institutions, world authorities are still trying to fight these scams. The AML screening implemented by the FATF in the Member States parallels that implemented on financial institutions. It is mandatory for all types of businesses to adhere to KYC and AML controls to meet these mandatory requirements.
Rising cases of money laundering:
Money laundering and terrorist financing are global disasters for economies. For this, companies are used that are exploited for smooth money transfers. These companies are losing their reputation and also have to pay a hefty fine. This is why companies should invest more in technical solutions for AML screening of their prospects.
Remote identity verification in a world affected by COVID:
The current state of the world and the way life goes on is something that could not have been imagined or expected weeks or months before the virus changed the world forever. People said to stay indoors, even for work, only to leave for basic needs. But even then, being in close proximity to another person or coming into contact with surfaces that many people touch is something that makes a person shiver in a cold sweat because of the justified fear created by the increasing number of people. Infections and death.
Problems caused by the virus such as massive job losses, sluggish resources, and businesses struggling to make a profit. However, not all spaces appear to be negatively affected by the conditions. Online marketplaces and delivery services meet the needs of people around the world today. However, this surge in the use of the online marketplace is a golden opportunity for cybercriminals who wait to attack poor victims in the absence of adequate security for their sensitive information.
Identity and credit card fraud cases have skyrocketed, with the Federal Trade Commission (FTC) reporting more than 18,000 fraud cases since the start of the year. Such news is just the tip of the iceberg of cybercrime that has taken place this year as criminals take advantage of the chaotic and fragile world. This only makes the need and use of identity verification more important than ever so that financial institutions and businesses can tackle this increase in financial crime.
What types of online identity verification solutions are there?
The need to perform online security checks is in high demand in many places, such as banks that offer digital banking services. But even with such online services, criminals try to profit from exploits that can be solved through online identity verification. Advances in technology are making it possible to perform authentication verifications that were once on paper and now present life, now online and in many different ways, such as:
Face recognition
Identity thieves get away with their crimes by using fake or man-made identities. This risk is mitigated by requiring facial recognition during critical steps such as settling payments and creating a bank account. Depth and vibration detection helps ensure that a real face is present in front of a camera in case the criminal tries to trick the system with a mask or photo.
Verification of documents
In addition to facial recognition, match the scanned face with the image of their documents, like their ID card, passport or driver’s license, etc. OCR and AI make it easy to verify a person’s identity to confirm the information entered, while also verifying the authenticity of the document presented to avoid being duped with false papers.
Verification of consent
Businesses and markets can require identity verification by asking customers to prove they really want to make a purchase or open an account with a written note clearly stating their intention. This ID helps fight a variety of crimes, such as chargebacks and fraudulent purchases through identity theft.
KYC Online Video
Online identity verification can be done by connecting a client with an expert who would guide them through various required verification checks such as those mentioned above. Being able to do this remotely is convenient for customers and businesses in today’s age, where travel and human presence are looked down upon in public places.
Verification of the EGM
The identity of a customer is particularly crucial to verify when it comes to purchasing items subject to age restrictions due to the presence of minors on the Internet. Businesses are required by regulatory laws to perform such checks to prevent underage users from purchasing illegal items or using their parents’ credit card information that criminals attempt to capture through ingenious traps, such as sites falsely selling in-game items and currencies. By verifying the user’s age by scanning their documents and face, such problems can be avoided.