Intelligent Character Recognition: How it Drives the Industry with a Breeze

Intelligent Character Recognition: How it Drives the Industry with a Breeze

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Data is the nucleus of any business and how efficiently it is processed is the key to digital transformation. 

Organisations are producing piles of documents on a daily basis and are then spending billions on retrieving information from them manually. Optical Character Recognition (OCR), which has been present for a long time aids companies in data extraction but is a simplistic rule-based software. Businesses have to step up their data management efforts to thrive in this age of digitisation. This is where Intelligent Character Recognition (ICR) came as a ray of hope, helping firms process their data efficiently and accurately. It is estimated that the manual efforts to extract that would be reduced to half by 2024 due to the adoption of character recognition software.

Thus, it’s high time to jump from conventional to automated data extraction methods. But what to choose: ICR or OCR? Before investing in them, it is good to thoroughly check both technologies to see the best fit for a business. 

ICR and OCR – A Quick Overview

ICR and OCR technology are used to recognise characters. Although scanning any document sounds simple and easy, that’s only the case when the document doesn’t need any edits. If it does, it’s a great headache as one has to retype the sections that require editing. That’s where character recognition software came to the rescue.

There are other software too such as Intelligent Word Recognition (IWR), Optical Mark Recognition (OMR), and Handwriting Recognition (HWR). However,  they are used for more “niche” purposes as their names indicate. Let’s stick to ICR and OCR! 

ICR vs OCR – What’s the Difference?

Two acronyms might mean the same: retrieving text from documents. But they both serve different purposes. 

OCR identifies the character and converts it into text format. It then compares the letters of the processed images with the large database. As OCR is an optical technology, it depends on the quality of the image that is processed. And as OCR matches images with the database, it is not suitable for custom fonts or handwritten text. However, if OCR is given a typewritten document, it would then convert the image to text form with great accuracy and speed. 

On the other hand, ICR is the advanced version of OCR technology that produces better results when it works with handwritten documents. The intelligent character recognition software uses context, data, and predefined user input to recognise the handwritten content. However, with enough context and great image quality, ICR can retrieve handwritten content from images more accurately and with greater efficiency. 


Document Verification – How ICR Make it Happen

ICR software is integrated into the system that gets input from handwritten documents. The software scans the data and extracts information from those documents. Let’s look at how an ICR technology verifies documents.

  1. The end-user is asked to display their identity card in the camera. Intelligent character recognition software first scans the document and then extracts details from the ID  such as name, Date of Birth (DoB), etc.
  2. The end-user is also asked to provide handwritten consent too (according to the system’s instructions). ICR software scans the consent text and extracts information from it too.
  3. Both the retrieved information are then verified and the results are given to the end-user as well as stored in the back office for future use.

Perks of Using ICR Software

Intelligent Character Recognition is a self-learning software which means it understands, modifies, and transcribes information to digital databases every time it’s exposed to various handwriting fonts and styles.

Here are the advantages of using ICR software:

  • ICR extracts data accurately and saves time by eliminating manual data entry. The workforce can perform with greater efficiency as a result of this.
  • The software is not only used for preserving records archives digitally but is also used for document management.
  • Cloud storage becomes more secure when the data is uploaded using ICR solutions, and businesses may protect the confidential data of their clients from unauthorised access.

Intelligent Character Recognition in Action

ICR is a remarkable breakthrough when it comes to retrieving data from physical documents and converting it to digital format more intelligently. 

Here are how ICR is being used in different sectors:

  • NBFCs, banks, and other financial firms are dealing with volumes of customer documents. This is where ICR fits in the puzzle,  reading data from loan applications, surveys, cheques, and forms to process them digitally.
  • ICR technology allows e-commerce stores and online enterprises to capture electronic signatures and save them in the database for Know Your Customer (KYC) documentation.
  • Many insurance companies file claims using ICR which increases transparency significantly. Clients can renew files and insurance complaints as the data is accessible digitally and can be checked easily.
  • Property managers use intelligent character recognition to verify ownership by scanning land documents. On the other hand, landlords use ICR software to verify rental agreements electronically.
  • Logistics and hospitality sectors are using ICR software in scanning receipts, address proofs, bills of lading, shipping records, invoices, and other documents.

How Shufti Pro Connects the Dots for Your Business

Leveraging the power of artificial intelligence, Shufti Pro transforms the way you do business by taking document processing to the next level.

Here is what Shufti Pro’s ICR software brings to the table:

  • Unmatched accuracy of 90+ %
  • Document verification with support for 10,000+ ID types
  • Available in 230+ countries and territories 
  • Supporting 150+ languages 
  • Simple API integration
  • 24/7/365 Support

Want to know more about how ICR can automate your business?

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Fighting Fraud in Gaming & Gambling Industry with AML Screening Services

Fighting Fraud in Gaming & Gambling Industry with AML Screening Services

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The online gaming sector is on the roll and is projected to surpass $172.23 billion by 2030. Irrespective of how it is operated, offline or online, the casino and gambling sector is becoming a hub for fraudulent activities; this alone has become a premise for regulators to further impose stringent laws.

A Quick Rundown: Heavy Fines in the Gambling Industry 2022 

Gambling regulators in different countries issued a huge number of fines, alerts, and even gaming licence suspensions to casino and gambling operators in 2022.  

The gambling sector was issued fines 38 times in the past year, totalling $264,578,390 approximately. This is a record increase of 443% when compared to 2021’s total of $48,642,992.


1. Star Entertainment Group Hit with Record Fine of $100M for Money Laundering

The largest financial penalty was issued to Star Entertainment Group. Australia’s gambling giant was charged with $100M for failing to curb money laundering at its casinos that are operating in Sydney. Not only this but the group’s permit to operate the casinos is also revoked.

The Star was accused of using a “cavalier” approach to governance and periodically taking intended actions to hide its channels. This led to the infiltration of white-collar crime such as money laundering in their Sydney casino.

The regulator forwent revoking Star’s licence completely to safeguard a number of jobs, yet, the financial penalty announced currently is the maximum allowed. The casinos will keep running under a supervisor selected by the regulator in conformity with the words of suspension.

According to Chief of the NSW Independent Casino Commission Philip Crawford, “the Star won’t be able to manage the casino independently unless it can earn its licence back”. 

The Star responded to the report saying that it has taken powerful and urgent remedial measures and would take “whatever necessary” to get its licence back and run the casino.

2. Entain to Pay £17M for Regulatory Failure

Entain has been charged with £17 million for failing to abide by Anti Money Laundering (AML) rules and not fulfilling its social responsibility.

Entain Group has to pay £14M for non-compliance at its online enterprise LC International Limited, which operates 13 websites including,, and

The gambling business will also pay £3 million for not satisfying AML rules at its Ladbrokes Betting & Gaming Limited operation, running 2,746 gambling sites across Britain.

The total amount of £17 million would be used for socially responsible purposes as a part of the legal settlement.

More licence conditions would be added to ensure a business board member supervises the progress plan, and a third party would audit to check its gambling compliance.

Chief Executive of the Gambling Commission Andrew Rhodes, said: “There were completely unacceptable anti-money laundering and safer gambling failures. Operators are reminded they must never place commercial considerations over compliance. This is the second time this operator has fallen foul of rules in place to make gambling safer and crime-free”.

Suggested Read: Global Gambling Compliance: Regulations, Age Checks & Financial Safety

Regulatory Efforts to Stop Crime in the Gaming Sector

As technology is advancing, hackers are also becoming more sophisticated in exploiting the gaming sector. This calls for strict regulations in casinos, gaming and other sectors not only to curb fraud but also to protect businesses from heavy fines and build a positive reputation in the market. 

European Commission Lists Online Gambling a High-Risk Sector for Money Laundering 

The European Commission has highlighted online gambling as a high-risk industry for money laundering. The commission has carried out various supra-national risk assessments to check financial fraud across various sectors. 

The authority noted that it is a digital currency that has made online gambling more prone to money laundering. The European Commission also said that operators are self-regulating in different markets with great success rates but the authority has failed multiple times when questioned about the transparency of the industry. 

Cambodia And China Strengthen Ties to Combat Illegal Online Gambling And Scams

Cambodia’s PM Hun Sen and China’s Premier Li Keqiang are all ready to strengthen their ties in combatting illicit online gambling, telecommunications fraud, and other kinds of fraudulent activities.

Cambodia’s authorities, who are tasked with implementing laws and releasing foreigners fooled working in unlawful gambling operations, say that nations whose citizens are defrauded must carry out additional efforts.

Although Cambodia is improving, still more needs to be done like conducting in-depth inquiries and stepping up its AML initiatives to ensure online gaming safety.

MGA to Introduce Detailed Player Protection Guidelines for Responsible Gambling

Malta Gaming Authority (MGA) is geared up to introduce gaming KYC guidelines after being placed on the Financial Action Task Force’s (FATF) grey list.

A closed consultation was launched by the MGA in October 2022. It will cover licensees’ obligations regarding their responsible gaming policies and procedures and the introduction of five markers of harm that must be considered by licensees when determining effective measures and processes to detect and address problem gambling”.

What Shufti Pro Brings to the Table

Regardless of what jurisdiction a casino or gambling business operates in, gaming verification is a must. This is where Shufti Pro fits in the Puzzle. Offering AML screening services across the globe, screening against 1700+ watchlists and that too within seconds to keep cybercriminals at bay. Moreover, its interactive user interface, fully automated monitoring, and enhanced data security are what make Shufti Pro stand out from all other IDV service providers in the market.

Still, confused about how an AML verification service safeguards businesses and customers?

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Risk Assessment: Building Trust Among Travellers

Risk Assessment: Building Trust Among Travellers

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The travel and tourism industry is among the largest in the world. Many countries, such as the UAE, Switzerland, Sri Lanka, Maldives, etc., rely on income generated by domestic and foreign tourists.

In 2019, the World Travel and Tourism Council reported the travel and hospitality industry to be roughly 10.3% of the global GDP. Although it slashed to 5.3% due to the pandemic in 2020, the numbers are now starting to bounce back. 

Saudi Arabia recently expanded its tourism beyond religious pilgrimage to offer 4-day visit visas with just the purchase of a ticket. Countries know the importance of opening their borders to tourists who inject the economy with fresh cash. Before the COVID-19 pandemic, Europe saw nearly 750 million tourists in 2019.

However, opening borders and allowing the free flow of international tourists isn’t without any risk. Implementing KYC protocols is challenging when ensuring people travel globally in a safe environment.

The industry is quite lucrative; with high-value one-off payments, the tourism and hospitality industry is at the target of fraudsters.

Businesses also need to implement strong KYC protocols for a proper risk assessment of travellers and reduce the chances of fraud.

This blog will discuss what it takes for companies to assess risk levels for travellers and its implications in the near future.

Travelling After the Pandemic

While travel patterns were normal before the pandemic, the world has undergone dynamic changes over the last three years.

Fast forward to 2023, travelling isn’t what it used to be. Once the world opened up its borders, the costs of travelling and compliance skyrocketed. Airports, aviation authorities, and the hospitality sector will now have to work with the ever-changing rules for stringent compliance.

The travelling and tourism sector has been facing numerous challenges for a long time, one of which is the use of counterfeit documents such as fake passports.

A functioning AI-based KYC and ID verification system can mitigate fraudulent attempts of using someone’s stolen identity for human trafficking and other financial crimes.

False Vaccine Reporting

Vaccination has been a controversial subject throughout their very existence. Regarding COVID vaccinations, many countries made it mandatory for travellers to get coronavirus certificates. Unfortunately, this didn’t sit well with many international tourists who, in an attempt to bypass the system, relied on falsified vaccine cards.

Determining travellers’ health is imperative to reduce the transmission of the virus to others in nearby surroundings. This has led to delays in travel, bookings, and hotel stays, eventually impacting businesses.

As a result, there has been a whopping rate of increase in using forged vaccine cards to bypass the verification system.

What is ISO 31030?

The new ISO 31030 has been implemented from August 2021 to implement the best  industry practices for risk assessment in the travel industry. The new standards provide a robust framework to develop, implement, evaluate, and review travel risk management policy and programme.

Know Your Traveler – Risk Assessment for Hospitality

Implementing robust and strong KYC checks is a surefire way of mitigating against fraudulent attempts by travellers. Background checks of employees and guests in the hospitality sector are equally important.

Applying risk assessment with the option of developing a custom questionnaire can ensure that the business is working with a legitimate customer having no past track records of being listed in any sanctions lists.

Why is Travel Fraud Protection Important?

With more convenience, such as booking for favourite travel resorts, and hotels online, comes the heightened risks of scams. With that being said, TransUnion reported that travel fraud from 2019 to 2021 increased by over 50%. And the numbers from IATA backup this claim. Airlines are deprived of nearly $1 billion annually due to increased number of digital fraud.


What Are the Different Types of Fraud How To Prevent Them?

Due to its lucrative, one-off nature, travel fraud can lead from using a passenger’s identity for drug smuggling to using a stolen credit card and making a friendly fraud.

Here’s a weird scenario. In 2021, a passenger from London was found guilty of making a fraudulent claim for £13,000 when he weirdly tried to eat forged documents. Here are the different types of frauds that your business needs to be watchful of:

Travel insurance fraud

Travel insurance fraud is when a passenger tries to claim financial compensation for losses that neither occurred nor fall under the category of it. Here are common scenarios when it happens:

  • A passenger applies for an insurance claim for apparently lost baggage
  • Making false claims of missing items
  • Fabricating injuries for insurance claims, whereas in reality, there have been no injuries

Travel expense fraud

Similarly to insurance fraud, expense fraud is when a company’s employee artificially fabricates travel expenses to inflate them for reimbursements. For example, if the cost of travel, accommodation and food were $2,000, it would be inflated to $3,000 or even more. Here are a few types:

  • Providing inflated receipts
  • Submitting forged/fake receipts

Stolen credit card fraud

Hackers hack a service through data breaches and card skimming to credit card information and sell on the dark web. One stolen card information can fetch anywhere between $6 to $20 per card. Now multiply that by thousands to get the bigger picture. Unless the cardholder reports it stolen, the card information remains valid for misuse. Hackers often purchase tickets for a confirmed booking at the very last minute, usually when within the last 24 hours. They know that the fraudsters would have already travelled by the time airlines detect a fraud.

Fake Online Travel Agency Fraud

“Beautiful hotel rooms at 70% off. Reserve now or regret.”

If something is too good to be true, it definitely is. Using such taglines, fake online travel agencies sell hotel packages that never exist in the first place. This isn’t even limited to holiday destinations but also to popular religious trips that pilgrims perform annually.

Bogus agencies sell religious pilgrimage packages worth thousands of dollars, only for the passengers to discover that they have been ripped off.

This is done by cleverly mimicking the look and feel of legitimate apps and websites to gain consumers’ trust. Once a handful of money is made, these hackers shut off the platforms to keep their identities hidden.

How Can Businesses Protect Themselves from Travel Fraud?

A one-sentence answer for this would be:

By conducting a thorough risk assessment of travellers and employees.

Here are some steps businesses can take to reduce travel fraud:

  1. Educate employees on the best practices for identifying fraudulent attempts such as fake emails asking for personal details or requesting to click a link and download special software.
  2. Develop a fraud prevention policy using clear KPIs to increase staff awareness.
  3. Use a risk assessment questionnaire to fairly assess your customers’ risk levels.
  4. Ensure real-time authorisation is enabled so that the cardholder is asked for a special code to allow an online transaction.

Shufti Pro helps you in unlocking the true potential of travel. From detecting last minute credit card fraud to ID theft, we specialise in mitigating and preventing fraud in a digital-first world.

Scan your travellers and employees against the 1,700+ sanctions list to ensure that only real passengers are onboarded. Reduce the risk of fraud and physical damage to your hotels, restaurants and businesses.

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Facial Recognition KYC Services | Helping Businesses Fight Fraud with Unparalleled Biometric Checks

Facial Recognition KYC Services | Helping Businesses Fight Fraud with Unparalleled Biometric Checks

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The AI revolution has enabled businesses to leverage the power of technology in KYC verification. Shufti Pro is constantly upgrading its facial recognition technology in line with the latest AI tools, further enhancing the way businesses fight fraud in a digital-first world.

The biometric facial verification systems deployed by Shufti Pro for enhanced KYC enable businesses to cut the fraud rate while onboarding new clients significantly.

With nearly $5 billion in 2021, the market worth of AI facial verification is expected to jump to $13 billion by 2028. Facial recognition technology has so far managed to reduce biometric fraud rates in a digitally connected world.

How does Shufti Pro use Machine Learning to improve facial recognition technology? Let’s dig in.

Machine learning and Facial Recognition – A Match Made In Heaven

Officially, the world population has surpassed 8 billion residents. Businesses face a challenge to capture, manage, and process every individual’s data. Even if people are unaware, facial recognition technology is prevalent everywhere. From logging on to smartphones to accessing private and confidential data, facial recognition has become an industry standard to combat fraud.

Many aren’t aware of the fact that there is constant machine learning doing all the magic behind facial recognition.

What is Machine Learning?

Machine learning, in simple words, is a process of teaching computer systems to continuously improve based on the huge datasets it processes, by developing algorithms and detecting fraud patterns. The vast amount of data is used by machines to develop algorithms that break down and solve complex problems that otherwise are impossible to do by programmers.

What is Face Recognition?

Face recognition is a KYC process that Shufti Pro uses to identify a user’s unique traits and confirm they are who they say they really are.

Most of the available commercial facial recognition systems aren’t really sophisticated as they match the user’s face to already available data in the records. Shufti Pro uses AI-based facial recognition technology that studies every face’s unique characteristics, ensuring it matches with the ones in the record. For example, a high-resolution, colour copy of a user’s face may fool a typical facial recognition system, but not bypass an AI-tool. But it just doesn’t stop here. AI-based tools can also learn and detect individuals if their facial appearances have changed, for example, moustaches and beards.

The biggest use of face recognition is deterring fraudulent attempts by combatting ID thefts.

Industrial Use Cases of Facial Recognition Technology 

There are multiple industries in which facial recognition can be used to enhance security and combat fraud. Here are a few of these:

  • In the medical industry, integrating biometric devices can help verify the identities of staff and patients. Alongside this, it can also automate the check-ins and check-outs of medical staff, doctors, and nurses.
  • Just like Apple Pay and Google Pay that do not require a physical card to pay for goods at retail outlets, the same can be done through biometric devices. This allows for contact-free payment mechanisms so that only verified users get charged on their credit/debit cards. It also removes the waiting times for customers standing in long queues.
  • In the education and corporate sector, facial biometrics can automate the check-ins and check-outs of staff members, students, and employees instead of manual attendance.
  • Banks cannot onboard users without following a host of stringent AML/KYC regulations, including video KYC and liveness detection.
  • Gambling service providers can onboard users and go beyond the conventional and outdated “Verify I am 18 years old” statements to ensure the clients they are onboarding are over 18.

How Shufti Pro’s Facial Recognition System Can Help

Our machine-learning technology helps combat fraud and stop ID thefts with an accuracy of 99%. The best part is that our systems continue improving with the passage of time as more and more dataset is fed to teach the system. This is the beauty of machine learning.

Once our client onboarding a new customer or business, the first part is OCR, or Optical Character Recognition. It allows us to extract all of the textual information from the user’s ID card, driving licence, or any other form of ID documentation they have used for verification.

As such, a complete user ID verification is performed in a matter of seconds. Our clients use this technology to verify the identity of end users and ensure only legitimate customers are onboarded.

Our technology highlights:

  • Politically Exposed Persons
  • Individuals and corporations subjected to sanctions
  • High-risk entities from high-risk countries

Our ID verification technology for KYC and facial recognition has built-in safety and security features. Our multi-layer authentication process ensures that data remains safe from hackers and fraudsters at all times.

Coupled with the Optical Character Recognition and Liveness Detection technology, the facial recognition process is safe, secure and truly fast compared to traditional verification methods.

Shufti Pro’s AI-based liveness detection, 3d depth perception, and fake image detection in facial recognition help businesses remain compliant with ever-changing AML/KYC laws. Learn how we can help you in this fight to prevent cyber crimes.

Talk to a compliance expert now and learn you can use this ultimate defence against facial spoof attacks.

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Understanding Risk assessment in the Gambling Sector

Understanding Risk assessment in the Gambling Sector

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The e-gambling industry has always been lucrative for gamers. However, it has also been constantly plagued by issues such as lack of trust, insecure payment gateways, and hacked games. However, over the last few years, the gambling industry has shifted its attention toward developing an entire digital ecosystem for players. As online games took off, so did the opportunities for players and criminals. However, remaining compliant with global AML laws and regulations is one aspect that the industry must recognise.

The vast majority of land-based casinos are closing down due to a shift brought about by the COVID-19 pandemic to online gaming and gambling.

The European Commission and Periodic Risk Assessments

The EU Commission conducts risk assessments regularly to determine the risk of terrorist financing and money laundering across the entire region.

It recently published its 2022 Supranational Risk Assessment Report to the European Parliament. The report analyses and provides a concrete action plan to fight money laundering and terrorism financing.

After several years of study and in-depth analysis, the report has rated the gambling sector with the highest possible risk of money laundering. The Commission highlights that online gambling poses a severe risk for AML and CFT due to multiple factors, such as:

  • Complex and huge volumes of transactions
  • Non face-to-face element
  • Use of cryptocurrencies and e-money
  • Unlicenced and unregulated online gambling sites

As the EU lays the framework for efficient risk management in gambling, the US faces an alarming increase in online sports betting and gambling. This happened in 2018 when the US Supreme Court made a historic decision to reverse a 1992 federal law that banned sports betting in the country. Until 2018, Nevada was the only US state that legalised sports betting.

Fast forward to today, the situation has dramatically changed. Today, gambling has been officially declared legal in more than 30 states.


How to Develop a Risk-Based Approach for Gaming and Gambling?

A risk-based approach is imperative to efficiently detect and manage the risk of money laundering & terrorism financing in the industry.

Every new user signing up to avail sports betting services, should be thoroughly scanned against sanction lists, PEPs, and financial crime databases. Other than this, strong KYC measures need to be in place with regular ongoing transaction monitoring to ensure that the gambling operator does not face non–compliance fines and penalties.

4th and 5th EU AML Directive for Gaming and Gambling Industries

In 2015, the EU Commission launched its 4th Anti-Money Laundering Directive (4AMLD) to fight money laundering. The Directive demands the implementation of Know Your Customer (KYC) and Enhanced Due Diligence (EDD) measures.

Customer Due Diligence (CDD)

Customer Due Diligence helps gambling and gaming operators to scan, evaluate, and ensure that only legitimate individuals and businesses are signed up. CDD significantly reduces customer onboarding risks.

Here are some factors to consider while determining the risk score for each user:

  • Player’s country of origin
  • Type of Product offered
  • Payment methods
  • Source of income

The risk rating determines the type of due diligence required for each player they bring to the platform. After the due diligence process is complete, assessing the player’s risk score and comparing it with their earlier scores to assess risk accurately is better.

A structured and pragmatic approach to KYC can help businesses better assess risks while onboarding new players. Compliance is not an easy feat; however, it should also not be taken for granted.

Know Your Customer (KYC)

Before running a KYC on customer, it is always imperative for businesses to consider the following factors:

  • Do customers hold influential positions prone to embezzlement or bribery?
  • Are they from a high-risk or sanctioned country?
  • What evidence suggests that the funds they are using to gamble with are from legitimate sources?

Enhanced Due Diligence (EDD)

When conducting enhanced due diligence, look for signs beyond the typical “sources of income” or “sanction country”. Be watchful of the following red flags:

  • Sources of Income?
      • Student, fresh grad – Too much money, problem gambler, avoiding answering questions
      • Corporate, professional – Answers all questions and has an appetite for managing risks
  • Property Records
      • Any recently purchased or sold a property for large sums of cash that cannot be traced? It is a high-risk customer
  • Criminal Activity
    • Any past records of criminal activity?
    • Sanctioned for crimes?
    • Screened for AML lists?

Enhanced due diligence goes beyond basic KYC to ensure the players’ businesses onboarding are genuine and have income from legitimate sources.

FATF’s Designated Risk Categories

Regulatory watchdogs want to put a special emphasis on unusually large transactions. If cash goes beyond a certain threshold, it could mean the transaction is suspicious. FATF uses three specific criteria to determine the risk factor for each player. These are:

  • Country or geographic risk
  • Customer risk
  • Transaction risk

Let’s study these in more detail.

Country and Geographic risk

Some geographies and countries post a higher risk of terrorism and money laundering than others. Casino operators can refer to the FATF’s sanctions list and determine the countries on the greylist and blacklist.

Even though the customer may not have any unusual transactions, enhanced due diligence must be carried out if they are from a high-risk country.

Customer risk

Sometimes, a customer may be from a low-risk country, but given their influential power, it could be considered high-risk. FATF advises gambling operators to consider the following factors in understanding customer risk:

  • PEPs – Politically Exposed Persons
  • Unusually high amount of cash transactions
  • Casual customers such as tourists
  • Problematic gamblers such as students
  • Involvement of multiple shell companies to obfuscate the owner’s identity
  • Duplicate accounts by the same customer


Gambling operators, sports betting websites, and online poker are all ranked as high-risk sectors and prime attractions for money launderers. This is why gambling service providers need to implement risk assessment solutions to ensure the players onboarding are low-risk customers.

Shufti Pro’s risk assessment service is a viable option for gambling service providers as they help detect potential customers through the most advanced KYC & AML checks, including customisable questionnaires, multiple risk parameters, and fraud prevention data points. Powered by AI algorithms, Shufti Pro’s risk assessment system completes verification in a matter of seconds with a ~99% accuracy.

Want to know more about the customer risk assessment system?

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Video KYC Verification | The Hassle-Free Process of Authenticating Identities

Video KYC Verification | The Hassle-Free Process of Authenticating Identities

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Digital onboarding these days is getting tougher for firms working and managing their business operations remotely. The question is, why? Over the past few years, the need to authenticate identities has accelerated as criminals and their techniques of conducting identity theft are evolving at an alarming speed. And this might lead businesses to lose their reputation and finances.  In worst cases, they might get penalised with hefty fines for not complying with global KYC & AML regulations. 

However, it can all be prevented if businesses get decisive about implementing video KYC verification techniques while onboarding new customers or employees. 

Let’s dive deeper into the topic and learn more about video checks and their application.

Video KYC Verification – A Brief Overview

Video verification, being a quick, convenient, and reliable process, allows companies to verify their customers’ identities remotely through a video call. The whole process eliminates the physical presence of the people and makes businesses capable enough to detect potential fraudsters beforehand. 

And observing the situation from customers’ eyes, the enhanced quality of the cameras of mobile phones, tablets, and laptops has made it even easier for them to get verified without getting into any sort of irascible process.

Why is it Integral for Businesses to Implement Video KYC Services?

Every business across the globe risks getting netted by money launderers, terrorism financiers, and identity thieves. These types of criminals are evolving in terms of their strategies to torment companies &  individuals financially and ethically. They are smart, intelligent, and equipped with unscrupulous techniques of making a company responsible for not complying with global KYC & AML regulations. Isn’t it better to include video verification checks in identity authentication systems rather than facing severe consequences?

Video Verification Blog info

Which Industries Require Video KYC Verification?

No matter in which industry or market a business is operating, criminals are smart enough to create teething troubles for them to ensure risk-free operations. This is why the following are the most targeted industries that are required to acknowledge the essence of using the video KYC process:

  • Fintech 
  • Gaming
  • Banking
  • Betting Sites
  • Crypto Oriented Projects
  • Credit Institutions
  • Insurance Providers 

KYC Video Verification – How Shufti Make it Happen

Rather than making the customers visit the premises, the whole process of authentication takes place remotely. The following is the process through which a user gets authenticated by the platform they are trying to access. 


Once a user registers on the platform, a compliance officer gets connected with them through a live video call.

Liveness Detection

Over here, the Video KYC solution will be able to detect the liveness of the customer on the other side with facial recognition techniques.

Document Verification

This step allows the user to show their government-issued ID document in front of the camera in real time. 

Facial Verification

 User’s face is matched with the provided ID documents to conclude the process of video verification.

Video KYC Vs. Standard KYC – What Businesses Need to Know

Businesses must be wondering how video KYC can elevate the standards of their authentication systems. Points discussed in the following table might help them understand the difference between the implementation of video verification and the traditional KYC process. 


Video KYC  Traditional KYC 
Reliable and real-time verification The process might take 7 working days
Online document submission  Requires physical presence of the user
Error-free and authentic results Manual verification
Ease in data collection Chances of human errors


Use Cases of Video KYC Solutions

Video verification is something every business requires. Following are the use cases that can help them further understand how such an inventive feature can help secure and elevate their business operations. 

Onboard Users Remotely

Traditional KYC process requires the physical presence of the user in order to onboard them. And yes, it can get tiresome in most cases. On the other hand, video KYC is something that allows companies to onboard new users digitally via a video call, making the process even more efficient and productive. 

Prevent Potential Fraud

Detecting fraudsters is what companies of this era are concerned about. Video KYC check creates ease in detecting money laundering, identity theft, and terrorist financing while onboarding new users. The real-time video call allows businesses to know their customers’ previous records, fetched through their shared ID documents. 

Successful Compliance with Global KYC & AML Regulations

No matter in which country a company is operational, they need to ensure that the businesses comply with the standardised KYC & AML regulations. Video verification helps  businesses to meet those regulations while  assisting to avoid getting penalised with hefty fines. 

Award-Winning & Effective Video KYC Solution

Looking ahead to 2023, companies will become the hub of fraudulent activities if they fail to implement video KYC checks in their authentication system. Criminals are smart and way ahead to take advantage of companies with operational inefficiencies. 

This is where Shufti Pro, an award-winning identity verification solution provider, steps in, the only entity on which businesses should be dependent in order to prevent the aforementioned risks.  Our state-of-the-art video KYC services have served an array of companies across the world and helped them fight fraud & meet compliance at a glance. With an accuracy of 99% and global support in 230+ countries and territories, we are a perfect match for businesses aiming to secure their operation and embrace digitisation.

Still hesitant about making a decision?

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Risk Assessment: Building Trust in Crypto Exchanges

Risk Assessment: Building Trust in Crypto Exchanges

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Other than following AML and KYC laws, crypto exchanges have a huge responsibility on their shoulders, ensuring effective risk management. The crypto industry, just like the finance sector, is constantly jolted by changes in regulations.

With the recent collapse of FTX and the unusually high $12 billion withdrawals of Binance, crypto exchanges need to implement strong internal controls to limit their risk exposures.

Money laundering, terrorist financing, and financial frauds plague the crypto industry, hurting its reputation.

Recently, Binance teamed up with its rival Huobi and recovered $2.5 million worth of bitcoins from getting laundered by Harmony One.

This is an excellent example of collaboration and emphasises how companies may now need to go out of their way, collaborate with rivals, and stop financial crimes wherever possible.

Let’s dig into why risk assessment should be an integral component of crypto firms in establishing trust with and onboarding legitimate customers.

Prerequisite for Trust Building in Crypto Exchanges

The cryptocurrency market is mostly unregulated and has been struggling with developing trust.

To restore this trust, crypto companies must abide by the ever-changing regulations, be more transparent in their liquid cash reserves, and implement robust internal risk and security measures.


As blockchain technology continues gaining momentum, so do the legal uncertainties. Here are some prerequisites for building trust in crypto exchanges.

1. Security

Customers will continue investing with the exchanges knowing that their funds and cryptocurrencies are safe. Since crypto is still in its infancy stages, building trust using innovative technologies will take time.

Investors and potential clients have multiple security concerns, such as how to invest funds and the lack of regulation surrounding it.

2. Personalisation

71% of customers feel agitated when they do not get a personalised customer experience. Crypto exchanges can provide a personalised customer experience by implementing strong risk assessment controls and procedures. 

3. Transparency

No company in the world can operate without transparency. FTX didn’t collapse overnight, nor did Celcius. Terra Luna. This stresses the importance of transparency.

Crypto exchanges work on proof-of-reserves (PoR), a concept that ensures that the exchange has enough reserves to facilitate liquid withdrawals from its platform without any obstacles.

OKX, without any delay, published its second proof of purchase in December, 2022, to ensure “customer funds are safe and secure at all times.” With a minimum of 1:1 reserve ratio, users’ funds are backed by tangible assets. Binance and OKX comply with this minimum requirement to ensure greater transparency of how funds are held with the exchanges.

4. Education

There are two obstacles in achieving success through crypto trading; education and security. While we have addressed security, education is an often overlooked aspect.

Many beginners in the field of crypto have little to no knowledge about this field. All they are interested in is having quick, short-term gains, in an extremely volatile market. Most of the beginners often drain their entire life savings and never fully understand why it happened.

Most of the “courses” are aimed at beginners to generate windfall profits for the creators. In reality, these beginners are trapped in the idea of generating easy money. Leading crypto exchanges have come up with their own solutions to educate their audience and provide repeat warnings that users may lose more funds than they have invested.

It is up to crypto exchanges to educate how their platform works. The more educated the customer is, the lower the risk of failures in the long run.

Binance, OKX, and a number of leading crypto exchanges have started publishing videos, blogs, and multiple types of content to ensure their audience are well-informed about the industry’s best practices. However, we are just scratching the surface, and a lot more still needs to be done.

5. Strong anti-fraud measures

When Bitcoin, the world’s first crypto currency, was created in 2009, the idea was to have strong anonymity in making transactions without relying on any bank or middlemen. However, with the passage of time we saw a number of unpleasant events such as crypto bankruptcies and scams.

Fast forward to 2023, and we see a large faction of users demanding regulatory changes in the industry to reduce financial crimes and money laundering.

This is where crypto exchanges need to incorporate strong anti-fraud measures to deter any fraudulent activity on their platforms. Identity verification, KYC, and KYI are imperative to ensure a safe and sound trading environment.

Key Takeaways

What’s happening with crypto today is nothing different than what happened with the casinos in the 1990s. The crypto industry, plagued with financial crimes and money laundering, must take this burden off its shoulders.

The ability to buy, sell, and store crypto anonymously was once its biggest selling point. Today, however, it has started becoming a liability unless swift regulatory compliance is conducted.

The very ability to exchange digital money anonymously is exactly why it is surging in popularity with traffickers, money launderers, drug dealers and terrorists. When cybercriminals attack an organisation, there is a reason they want to be paid in crypto.

Crypto platforms of today can only do away once they implement strong KYC, KYI, and AML policies in place. This is where Shufti Pro helps crypto exchanges to remain compliant with AML, avoid hefty fines, and continue operating as a regulated business with utmost honesty and transparency.

Our AML experts have helped crypto exchanges in remaining compliant and can do the same for you too. It is time to fight money laundering and terrorist financing with an iron fist, which can only be done with strong ID verification measures.

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2 Factor Authentication: Businesses’ Secret Weapon Against Cybercriminals

2 Factor Authentication: Businesses’ Secret Weapon Against Cybercriminals

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Passwords continue to be a low-hanging fruit for cybercriminals. 

Approximately 15 million records were exposed globally during the third quarter of 2022.

Many argue that this figure makes humans and their credentials a weak cybersecurity link. However, deploying the best authentication technique and empowering individuals to prevent such incidents would be the best shield against cybercriminals. 

A Quick Recapitulation of Notable Scams and Warnings in 2022

Fraudsters are making every effort to bypass security controls and use others’ stolen data to accomplish their illicit goals. The financial sector witnessed 23.6% of phishing attacks globally, while web-based software services accounted for 20.5% of attacks in the first quarter of 2022. These two digital sectors were the main target of cybercriminals, putting a dent in their reputations.


Let’s have a quick look at some significant scams and warnings in 2022.   

Over 6000 BVNs Under Scrutiny for Fraudulent Transactions, Reveals CBN

​​The Central Bank of Nigeria (CBN) has disclosed that more than 6000 Bank Verification Numbers (BVNs) are under investigation for fraudulent transactions. The bank also stated that at least 11,871 BVNs were watch-listed as dead individuals in 2022.

The latest figures reveal that the enlisted BVNs in the first half of 2022 were more than 2.72 million, accounting for 54.65 million. Roughly 148.4 million active customer accounts make this in all Nigerian banks.

A total of 26,877 fraud cases were reported by GTB, Access Bank, and Fidelity Bank during the first half of 2022. While comparing with others banks, Access Bank topped the list with attempted frauds and the most losses in the same year.

AMLC Reports Steady Rise in Phishing and Hacking Attacks in the Philippines

The Anti-Money Laundering Council (AMLC) has documented a continuous surge in hacking and phishing attacks in the Philippines, accounting for P16.4 billion in the previous ten years. As per the AMLC, credit card purchases, digital cash card loading, inter-account transfers, and digital cash card withdrawals are among the most widely used transactions.

Furthermore, 99.7% of STRs involved local transactions, while 0.27% included overseas remittances. Ilocos Region, National Capital Region (NCR), Central Visayas, Central Luzon, Calabarzon, Davao Region, and Western Visayas accounted for 50% of all domestic transactions and 44.6% of transaction zones were unidentified. For overseas remittances, the US alone has made 27.2% of transactions.

The FIU has urged all information exchanges between law enforcement organisations, overseeing authorities, and other financial intelligence departments to address the issues and raise awareness about domestic phishing or hacking attacks.

Hackers Leak Stolen Patient Data After Ransomware Attack on Medibank

Medibank has given a red signal to its customers after becoming the victim of a ransomware attack. The bank warned its clients to be super cautious as hackers started revealing confidential medical information such as names and Dates of Birth (DOB) that they had stolen from an Australian health insurance company.

The leaked information shows that there were negotiations between Medibank’s Chief Executive Officer and hackers. Although Medibank said that no customers’ banking details were compromised, shots to WhatsApp discussions revealed that the hacking group planned to disclose “keys for decrypting credit cards” as well.

The Cybercriminal gang leaked the personal details of 200 Medibank clients. As per Medibank, roughly 9.7 million customers’ confidential data and almost 500,000 clients’ medical claims information were accessed by those hackers.

Bank of Ireland Warns Customers of Rise in Phone Call and Text Scams

Text and phone call scams are rising and the Bank of Ireland has already warned its customers. The bank has reported 40% more cases of telephonic call and text fraud in the last few months. 

The bank claimed that “callers are receiving texts with the Bank of Ireland logo urging them to await a call. If the client answers the phone, the fraudster will attempt to get their credit card information and swipe a fake notification to update the procedure on their application, which is basically the moment that their money is stolen. Another trick is to send phoney messages with the An Post or HSE texts that link to phishing sites that steal debit or credit card information as well as user login information”.

Two-Factor Authentication – A Need of the Hour

Using passwords to keep accounts secure is an outdated approach now as cybercriminals are becoming more sophisticated in hacking techniques. This is where two-factor authentication came as a ray of hop businesses. 

2FA doubles up security by asking the user to enter two or more than two pieces of evidence to prove that they’re who they claim to be. Two-factor authentication is a great bet for boosting any business’s protection against evolving threats such as phishing attacks, credential stuffing, and account takeovers. Not only it makes firms fraud-free and prevents them from hefty non-compliance fines and builds a positive brand image in the competitive market.  

How Shufti Pro Can Help

In this fraud-pandemic era, businesses are looking for trustworthy verification services to keep fraudsters away. This is where Shufti Pro fits in the puzzle. With simplified two-factor authentication that takes less than a second to complete, Shufti Pro is the globally trusted IDV service provider. It offers verification services to 230+ countries and territories and that too with 99+% accuracy. Moreover, Shufti Pro’s 2FA services offer an auto code generator facility to integrate API with digital platforms, boosting customer experience seamlessly.

Are you looking to protect your business from a multitude of threats? 

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AML Verification Services: Fighting Back Financial Crimes in 2023

AML Verification Services: Fighting Back Financial Crimes in 2023

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The Covid-19 outbreak has increased reliance on eCommerce and digital banking — cultivating a lush ground for crimes like money laundering, corruption, and tax evasion.  The surge in financial fraud is costing businesses handsome money and putting a dent in their reputations. 

The total amount of financial penalties in 2022 was £215,834,156, with no signs of slowing down in the coming years. Thus, thwarting heinous crimes and their ramifications has become a greater imperative in the ever-changing digital era. 

Financial Crimes and Global AML Regime – 2023 Outlook

Global penalties for failing to curb money laundering and other financial crimes increased by more than 50% in 2022. 

Banks and other financial firms were fined $5 billion for Anti Money Laundering (AML) infractions, violating sanctions and shortcomings in their Know Your Customer (KYC) systems in 2022.

Huw McCartney, Professor at the University of Birmingham, said that “in the wake of fines, companies usually put more resources into compliance and monitoring but remediations could be quite poorly enforced and monitored both within the firm and by the regulators themselves”.

The US is the most aggressive imposter of fines, charging total penalties of more than $37 billion, followed by $11 billion in Africa, Europe, the Middle East, and more than $5.1 billion in Asia-Pacific. 

According to Chief Executive of Better Markets, Dennis Kelleher: “No matter how big the fines are, they don’t punish and don’t deter, the penalties are mostly a meaningless cost of doing business. No matter how big they are, they are small compared to the revenue and profits of the banks.”

BNP Paribas, Goldman Sachs, HSBC, Standard Chartered, UBS, and JPMorgan Chase, topped the list for AML and related penalties in the post-crisis period.

Standard Chartered said that it saw “fighting financial crime as an ongoing process of improvement and will continue to invest in our people, systems and processes”. HSBC stated that it was “deeply committed to combating financial crime and protecting the integrity of the global financial system and had made significant investments to bolster its financial crime and compliance capabilities”. However, UBS, BNP, Goldman and JPMorgan refused to comment.


A Recap of the Latest AML Fines 

As technology is advancing, scammers are also revising their strategies to exploit banks and other financial institutions for accomplishing their illicit goals. Scammers are laundering money in a very sophisticated way, leaving businesses in vain.

Let’s dive deep into some latest AML fines imposed on banks and financial firms.

FIAU Charges ECCM Bank €310,000 for Weak AML Controls

The Financial Intelligence Analysis Unit (FIAU) has fined ECCM €310,000 for weak AML controls. FIAU disclosed that the bank didn’t have any adequate measures to assess the risk associated with business and customers. Besides slapping ECCM with a heavy penalty, the bank was also asked to take remedial steps to support its AML controls. 

FIAU Slaps Triton Capital Markets Limited with €227,000 Fine for AML/CTF Breaches

FIAU has charged Triton Capital Markets Limited with €227,000 for violating AML and Countering Terrorism Financing (CTF) regulations. 

The FIAU noticed, “the investment services company had failed to take appropriate steps, proportionate to the nature and size of its business, to assess the risks of money laundering/terrorism financing arising from its operations and to adequately document such assessment”. 

CFTC Fines CHS Hedging ​​$6.5m for AML and Other Violations

The Commodity Futures Trading Commission (CFTC) has charged CHS Hedging with a civil financial penalty of $6.5m for failing to manage risk and violating AML regulations.

​​As per the CFTC, these infractions are mainly the result of CHS Hedging’s ineptitude towards placing a robust AML programme, especially when it came to a trading account that was under the supervision of one of its clients. Also, CHS Hedging hadn’t set risk-based limitations for that client’s trading.

Danske Bank Charged with $413m for Defrauding Investors about AML Shortcomings

The Securities and Exchange Commission (SEC) has fined a multinational financial services firm in Denmark, Danske Bank,  $413m, for cheating investors about the AML compliance program in the Estonian unit. SEC announced that Danske bank was slapped with this hefty penalty as it didn’t reveal the shortcomings in its AML controls. 

AML Verification – The Solution to Curb Financial Fraud

Looking back at 2022 makes it clear that even such heavy fines are not the solution to curb money laundering, terrorism financing, and other financial crimes. Despite efforts to prevent fraud in banks and the financial sector, the surge in financial penalties indicate that the root cause of the problem must be identified and regulations must be followed to get rid of such heinous crimes. 

This is where the AML verification solution proves to be a great bet. But how? Well, it authenticates any customer before onboarding them, safeguarding all financial firms from fraudulent activities. Furthermore, it makes banks and other financial institutions comply with AML regulations, offers a great user experience, and builds a positive brand image.  

How Shufti Pro Fits in the Puzzle 

Shufti Pro is their go-to option for all banks and financial firms looking for a globally trusted AML service provider. Based on thousands of AI models and screening against 1700+ global watchlists, Shufti Pro’s AML screening services promise a fraud-free world. Moreover, it has an accuracy rate of 99+% and authenticates any individual in less than a second.

Still, confused about how AML verification services keep fraudsters away? 

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KYC and AML: The Key to Secure BNPL Services in 2023

KYC and AML: The Key to Secure BNPL Services in 2023

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Seems like Buy Now Pay Later (BNPL) services have taken the world by storm, with 360 million users worldwide in 2022, but the bitter truth is fraudsters have already taken the front-row seat. 

BNPL services have helped consumers make purchases worth $100 billion, from pet foods to insurance premiums over the last year. That’s a big jump with no signs of slowing down in the coming years.  

Banks and merchants are expanding BNPL services to boost B2B financing. With prices skyrocketing, the growth of BNPL would accelerate beyond the most bullish of projections making them a hub of opportunities for fraudsters. 

The Market Snapshot of BNPL 

BNPL is a payment model that lets customers buy an item and makes its purchase over several installments. Clients can get their parcels shipped immediately and they can pay off the amount over time. 

Looking at the trends of BNPL services, it is anticipated that its market value will reach $680 billion globally by 2025. The same research estimates that US clients would be using BNPL services to buy those items that would exceed their budget or avoid using credit cards. Furthermore, BNPL payments in the US would reach $82 billion in the coming months. 

The data suggests that 25% of eCommerce customers are using BNPL services in the UK, provided by approximately 20,000 merchants. Recent transactions were 5% of the eCommerce sector and were worth £6.4 billion.

Diving deep into the market makes it clear how popular these services are among youngsters. The Financial Conduct Authority (FCA) of the UK has found that 25% of BNPL users lie between the ages of 18 and 25 while 50% are between ages 25 and 36. And the astonishing thing is that 70% of users of BNPL servicers are females and 90% of the items purchased are related to fashion or footwear. 

Looking at the size of how BNPL services are growing in this digital era, it is crucial to understand its vulnerability to fraud and how to keep oneself and other businesses safe and secure. 


Suggested Read: Identity Theft Pushed to New Records with Buy-Now-Pay-Later Boom in Australia

BNPL Services – A Fraudster’s Paradise

As technology is advancing and businesses are looking to make their name, fraudsters are leaving no stone unturned to exploit them. The emergence of BNPL services has become a paradise for criminals to fulfil their malicious intent. There are several schemes that are used by fraudsters to target BNPL services which are as under:

  • Synthetic ID Fraud: Criminals use synthetic identity fraud when they want to open a bank account. First, they create a fake profile merging fictional and real details like identity documents, social security numbers, addresses, etc. When they are done with making a synthetic identity, they use BNPL services to buy anything they want using others’ payment or personal information. As soon as they receive the goods, they disappear, leaving the merchant or the customer in vainpaying the bill. Synthetic ID fraud costs lenders and banks $6 million a year and is the fastest-growing financial crime in the US. 
  • Account Takeover: Some fraudsters play a good game defrauding a BNPL user. They target individuals with good credit rating scores and who have taken a BNPL loan.  What they do is they get all the personal details of that customer through Account Takeover (ATO) attack and then purchase the expensive item using the genuine customer’s record with the BNPL provider. With the rising number of fraudulent activities, the FTC has warned every Buy Now Pay Later Service provider to comply with the consumer protection rules. 

Suggested Read: Buy Now Pay Later Service Openpay Warned for AML Violations

How BNPL Fraud is Harming Online Merchants

The surge in different kinds of BNPL fraud is not only causing havoc to customers but also merchants; here is how:

  • Merchant Reputation: When any customer is defrauded by the BNPL service provider, they will not choose the merchant again. The frustrated customer will share their bad experience with their circle. The scenario raises questions about the merchant who cannot even secure their clients, putting a dent in their reputation. 
  • Financial Repercussions: Fraudulent transactions ask the merchant for chargebacks. Merchants have to address the issue with the BNPL service provider. Many BNPL providers have also mentioned security breach clauses in their merchant agreements. This means merchants have to bear the costs in case any fraudulent transaction occurs. 

KYC/AML Services – The Only Key to Secure BNPL Services

BNPL service providers are hunting for ways to curb the increasing number of fraud and the best strategy, in this case, is to stop bad actors, not the BNPL. But how to keep those fraudsters at bay? This is where Know Your Customer and Anti Money Laundering (KYC/AML) solutions came as a ray of hope. KYC & AML solutions not only protect firms from heinous crimes but also prevent them from paying hefty fines by making them compliant with global regulations. Moreover, robust KYC services offer customers a greater user experience and help build a positive brand image in the competitive market.  

How Shufti Pro Can Help

To detect BNPL fraud effectively, it is essential to identify subtle events and patterns formed over time. This is where Shufti Pro steps in, offering identity verification services to 230+ countries and territories, supporting 150+ languages, and authenticating customers in less than a second. Shufti Pro is globally trusted in eliminating synthetic ID fraud with an accuracy rate of 99+%.

Are you still confused about how KYC verification services curb fraud in the BNPL market?

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Document Verification Services – The Secret Sauce  to Keep Fraudsters Away

Document Verification Services – The Secret Sauce to Keep Fraudsters Away

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Forging someone’s documents is something bad enough but selling them on the dark web is just rubbing salt in the wound. 

To one’s astonishment, falsified records in physical format sell at a greater price on the dark web than their scanned versions. An original Maltese passport was sold for $6,500 in June 2022 whereas a passport from other countries averaged 3,800. For scanned versions, the cost of a Minnesota driver’s licence is expected to reach $150. 

This is where document verification services come as a ray of hope, not only protecting businesses from identity and data theft but are more than this. Before exploring their many benefits for enterprises, let’s first understand what document fraud is all about. 

What is Document Forgery?

‘Document forgery’ or ‘document fraud’ is the practice of altering, creating, or using genuine or false documents with the intention to cheat or bypass security systems. The penalties for document fraud vary depending on the situation, intent, and type of document forged. Falsifying official documents such as ID cards, driver’s licences, and passports with the goal of selling them is considered a major forgery offence in many legislations. 

Different Types of Document Fraud

Interpol categorises fraud into the following types. This include:

  • Counterfeit Documents: Reproducing a genuine document without authorisation from the relevant authority.
  • Forged Documents: Altering an official document deliberately with the intent to delete, add, or modify details to make it look genuine. Forged documents include page substitution, data alteration, photo substitution, and attacks on entry/exit stamps or visas.
  • Pseudo Documents: Replicating documents from genuine documents like passports, and national identity cards, not recognised by countries or international organisations.

Regarding genuine documents, there are different types of document fraud:

  • Official documents that are obtained through corruption, bribery, theft etc. and are usually called Fraudulently Obtained Genuine (FOG)
  • Genuine documents misused by an imposter

The Growing Need for Document Authentication

Identity and data theft cases are rising, charging businesses with heavy fines. Almost 2.4 million cases including identity theft and other kinds of fraud were reported until June 2022. Thus, document verification has become an integral tool for any firm to authenticate that the customers are who they confess to be. It not only verifies customers during onboarding but helps businesses in many other ways.

How to Verify Documents?

Document verification checks feature like watermarks, fonts, stamps,  holograms, or other security markers to check if they are genuine or fake. 

Here is how document verification services get the job done:

Step 1: Document Collection and Data Capture

The user is asked to upload a picture of their identity documents. The algorithms scan the document thoroughly including the encrypted data and recognise it. 

Documents are pre-processed to make them ready for the second step. This includes checking documents’ borders, de-skewing images and enhancing their brightness and colour to ensure adequate data extraction.

Step 2: Data Extraction

The required details are retrieved from the documents and all the irrelevant information is discarded. The intelligent engine extracts all the information using Optical Character Recognition (OCR) technology. 

Step 3: Document Verification

The retrieved data is then cross-matched with the database to check its authenticity. The validation checks that are carried out include: 

  • Face and orientation recognition
  • Edge detection as well as cropping
  • Front-to-back correlation
  • Cross-matching with other global IDs
  • Colour space examination
  • Headshot integrity
  • Matching the selfie to the image on the ID card

Step 4: Results Generated

After verifying the documents, the results are provided to the end user and stored in the back office for future use.  

Benefits of Automated Document Verification Services

Fraud is increasing day by day and businesses are looking for ways that not only curb these heinous crimes but also help them make their name in the competitive market. Thus, AI-based document verification is their go-to option giving faster ROI, onboarding clients rapidly,  preventing fraud, preventing them from non-compliance fines, and building a positive brand image. 

  • Faster Return on Investment: Enterprises that use automated document processing can reduce their ownership costs and increase Return On Investment (ROI) compared to conventional technologies.
  • Rapid and Secure Client Onboarding: Digital document verification services onboard clients faster than manual procedures as the clients do not have to wait in long queues to get their verification. They just provide their details and the AI-based document verification swiftly checks their authenticity in real time. 

Are you looking for a globally trusted verification service provider? Well, Shufti Pro is a great bet as it offers a 25% higher client onboarding rate with minimum false positives. 

  • Compliance with KYC/AML Regulations: Document verification services make businesses abide by Know Your Customer and Anti Money Laundering (KYC/AML) regulations, preventing them from hefty non-compliance fines. 
  • Better Customer Experience: Companies are in the race to get ahead of their competitors and they can make a difference by offering greater customer experience. Client satisfaction is what makes the image of any business or destroys its reputation. This is where automated document verification services prove to be fruitful. When any business is KYC/AML compliant, customers feel secure. They automatically portray a positive brand image; this is how it helps the business generate greater revenue and make its mark in the competitive world market.  

How Shufti Pro Steps in

Verifying customers in real-time is a necessity to satisfy KYC/AML compliance. This is where Shufti Pro fits in the puzzle, onboarding legitimate customers globally and that too in less than a second with an accuracy rate of 99+%. With Shufti Pro’s identity document verification services, businesses can quickly reduce client abandonment rates and boost conversions. 

Are you looking for a customised document verification process for your business?

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5 Reasons to Invest in Intelligent Character Recognition Services

5 Reasons to Invest in Intelligent Character Recognition Services

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Businesses deal with a plethora of documents, ranging from accounting and finance to sales and marketing. Enterprises are spending millions of dollars processing the information manually which is susceptible to human errors, is time-taking, and isn’t scalable. 

Touchless handling of documents is the need of the hour. It is estimated that 50% of corporate-to-corporate invoices worldwide will be processed and paid without human intervention by 2025.

Optical Character Recognition (OCR) has been used for many years but is insufficient as it only retrieves data from printed files. This is where Intelligent Character Recognition (ICR) comes to the rescue, extracting information from handwritten files of different fonts and styles automating business workflows. 

What is ICR?

ICR is the advanced form of OCR that uses artificial intelligence algorithms to enhance text recognition. But how does ICR extract information from documents

The technology recognises handwritten digits and letters by analysing features such as lines, closed loops, and line intersections. 

For example, “C” is an open loop while “O” is a closed loop. ICR compares these features with vector-like representations rather than pixel-based is what makes it best to work on different handwritten fonts.  

What is OCR?

OCR uses “matrix matching” algorithms to identify characters. But how does OCR do this? The software determines any character by matching a matrix of pixels between the character in the picture and the stored example. This sounds like a good approach but has some pitfalls. 

Even when there are thousands of examples stored for just one character, issues happen when there are uncommon fonts used or matching text on bad-quality images.   

OCR vs ICR – What is the Difference?

Besides just understanding both technologies from a technical perspective, it is crucial to understand why businesses use ICR vs OCR or vice versa.

  • OCR is a vast character recognition technology and ICR is its subset
  • OCR focuses on printed documents while ICR recognises text in handwritten forms and images
  • OCR is not adaptive and can not be trained according to document layout as compared to the ICR
  • OCR is best for those firms that have structured as well as the unchanging format for documents while ICR can recognise even unstructured documents

Perks of Using ICR Software 

Firms need ICR not only to save time on managing data manually but also to enhance data security. This is where ICR proves to be a great bet.

Let’s dive deep into the many benefits that ICR software has for any business.

5 Ways Intelligent Character Recognition a Promise to Automate Businesses info

1. Scan and Read Documents More Accurately

ICR uses neural networks that help the software learn from its own experience. AI algorithms help software enhance its capability of scanning and reading documents more accurately.

2. Assist in Making Wise Decisions

ICR helps businesses in retrieving documents from handwritten documents. As far as the accounting department is concerned, the software helps in accessing information and making decisions about whether they should partner with another firm or not. 

3. Save Time

Businesses have piles of documents to handle and are struggling to get the job done while saving time. Hiring a workforce to do the data entry tasks is not effective as they spend hours scanning data. Not only this, manually retrieving data leads to increased errors in the authentication process. ICR automates workflows and saves time for urgent tasks that need more attention, enhancing customer experience.  

4. Eliminate Manual Data Entry Work

ICR software makes a big difference in terms of recognising text and that too with higher accuracy. As it does not require any labour to enter data or manage files, proves to be a great investment to automate businesses and go away with laborious data entry tasks. 

5. Improve Data Security

Identity theft and data breaches are increasing day by day, causing reputational damage to any firm. Almost 15 million records of customers were exposed through data theft globally during the third quarter of the year 2022. The figure has risen 37% when compared to the last quarter.

Businesses are dealing with bundles of files containing personal details, including their name, driving licence number, social security number, etc. If the software doesn’t have ICR, they may face the risk of privacy concerns. Privacy incidents lead to loss of employment and cost the firm heavy penalties. 

When Do Businesses Consider ICR Technology?

ICR software is getting popular due to the many perks that it offers. Here is when a  business must consider using ICR technology.

  • Dealing with Handwritten Documents: ICR handles all the data entry and processing tasks automatically with minimum to no errors. 
  • Working with Different vendors: Companies are dealing with a number of vendors on a daily basis and managing their documents manually is a frustrating job. However, ICR makes data management simple and easy.
  • Requiring Scanner Regularly: Businesses have to scan volumes of documents which is a time-consuming task when done manually. ICR helps companies scan data quickly and accurately. 
  • Striving for Digitisation: All firms want to do away with paper documents; this is where ICR is a promising software. It is assisting businesses in examining, organising, and transferring documents more efficiently. 
  • Encouraging Remote Work: ICR converts all paper-based files into digital format. This encourages employees to do their tasks in a remote setting.

How Shufti Pro Fits in the Puzzle

If your firm is dealing with volumes of paper documents, ICR is the perfect option to boost business efficacy. And this is where Shufti Pro’s ICR software steps in, covering 150+ languages and extracting information from documents in less than a second. Shufti Pro is trusted globally with effortless integration and unbeatable accuracy of 99+%. 

Still, confused about how ICR can meet your data extraction needs?

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5-Steps to Improve Customer Due Diligence Process

5-Steps to Improve Customer Due Diligence Process

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The digital age has witnessed a new wave of financial fraud. It is estimated that $4.7 trillion of corporate revenue is lost annually to scams. Worst hit by the fraud pandemic, businesses are looking for a way out. Taking the situation into account, regulators are introducing stricter Anti Money Laundering (AML) regulations and Customer Due Diligence (CDD) responsibilities. 

A Bit About Customer Due Diligence

So, what is CDD? It is the process of identifying clients, verifying their identity, and tracking their behaviour to protect businesses from bad actors. An obligation upon financial firms and certain other companies, CDD helps to curb money laundering, terrorism financing, and other heinous crimes. 


3 Tires of Customer Due Diligence 

Although CDD is mandatory for certain institutions, it doesn’t mean every client must go through a comprehensive monitoring process. Depending on the level of risk associated with a particular customer, they either have to be the subject of Simplified Due Diligence (SDD), Standard Customer Due Diligence, or Enhanced Due Diligence (EDD).

  • Simplified Due Diligence: SDD is conducted when a client poses little to no risk to the business or when the product they are applying for poses little risk. Low-risk customers are identified simply through their official documents and  Personally Identifiable Information (PII).   
  • Standard Customer Due Diligence: CDD is performed when the customer poses a moderate risk to any business. Medium-risk profiles are verified through official documents, PII, and an official third-party identifier as per Know Your Customer (KYC) requirements.  
  • Enhanced Due Diligence: EDD is applied to those clients who pose a high risk to the organisation, live in high-risk jurisdictions, or are engaged in high-risk activities. 

Institutions Subject to CDD Regulations

AML and due diligence procedures are considered banking regulations; however, they also apply to some non-banking firms too. Although legislation varies from country to country, businesses are seeing stringent regulations regarding which firms should have customer due diligence processes in place. 

Section 352 of the US Patriot Act has amended the Banking Secrecy Act to expand the businesses that must implement due diligence processes. Previously only banks had to comply with AML regulations. Now non-financial firms such as broker-dealers are also mandated to deploy AML programs. 

The United Kingdom also has stricter AML policies under ‘Money Laundering Regulations 2007’. The regulations outline sectors that must use due diligence processes:

  • Money service businesses
  • Accountancy service providers
  • High-value dealers
  • Insurers
  • Telecommunications services
  • Art market dealers
  • Estate agency services
  • Bill payment services

The fifth European Anti-Money Laundering Directive (AMLD 5) included tax-related services, art traders, virtual currency exchanges and wallets. AMLD 6 came into force in 2020, establishing business liability for money laundering. 

How to Enhance Customer Due Diligence Process? 

To ensure that the company follows best practices, here are the 5 steps to improve CDD in banking and other non-banking institutions. 

1. Verify Customers

Performing CDD before entering into a corporate relationship with clients is the key to keeping fraudsters at bay. Clients can be verified through their name and residence; however, with an increasing number of fraudulent activities, collecting additional information like their Date of Birth (DOB), national ID card number, etc. is advisable. Checking which category of risk a customer faces is key to preventing identity theft and potential forgeries at an early stage.   

2. Choose Third Parties Wisely

Businesses must rely on third parties like banks or lawyers to help them accurately and efficiently conduct due diligence procedures. The only tip is that companies must choose them wisely because, in the end, the particular firm is accountable for their CDD measures, not the third parties. The golden tip to selecting third parties is to check whether their goals align with the business.  

3. Ensure Security of the Collected Data

When authenticating any customer, it is essential to classify their category before securely storing all the data digitally. Although collecting personal details is a part of due diligence in banking and other sectors, there are often tight regulations on collecting and storing information. Ensuring the security of customer data is not only a legal requirement to avoid non-compliance fines but also a necessity to maintain the business’s reputation. 

4. Perform EDD in Case of High-Risk Clients

Beyond just performing basic due diligence, checking whether enhanced due diligence is necessary. This is a continuous process as any low-risk customer can turn into a high-risk profile with the passage of time. For example, many countries require Politically Exposed Persons (PEPs) to be the subject of EDD. Other factors that trigger EDD are profiles with high transaction value and adverse media mention. Enhanced due diligence protects businesses from nefarious crimes and makes them compliant with KYC/AML regulations

5. Be Prepared for Audit

Keeping records of due diligence performed on any client is crucial for satisfying future regulatory obligations. Having digital records in place can help re-analyze any situation to decrease any risk, boost performance, and better guard against problematic profiles. These checks facilitate the auditing team to hone their methodology and otherwise optimise compliance processes. 

Who Can Benefit from the CDD Checklist?

  • Businesses dealing with customers
  • Companies that must abide by AML regulations
  • Financial or non-financial institutions that want to safeguard themselves from the risks associated with their clients

Stay CDD Compliant with Shufti Pro

Compliance with CDD is not a checkbox exercise but the key for all forward-looking organisations. And Shufti Pro, the leading document verification service, is the go-to option for all those firms who want to protect themselves from hefty non-compliance fines. Providing customer and business verification in less than a second, Shufti Pro is globally trusted in protecting companies from fraudulent activities. 

Are you confused about whether your business is KYC/AML compliant?

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7 Things Businesses Should Know About Online Face Recognition Solutions

7 Things Businesses Should Know About Online Face Recognition Solutions

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One might be good at identifying faces. People find it a cinch to recognise a friend’s or family member’s face. This is because they are familiar with their looks — eyes, mouth, nose. That’s how face verification technology works but on an algorithmic scale.

Where one sees a face, the recognition service sees data. Many people are aware of how face recognition technology works. However, many individuals don’t know how it gets the job done— verification. It’s not only Tech experts who are discussing the potential of this technology; human rights advocates and politicians are also examining its features. It is wise to stay informed about the technology to make businesses free from fraud.  

What is Facial Recognition?

Face verification uses AI algorithms to authenticate customers’ faces by cross-matching them with the image on their identity document. It reduces the probability of spoof attacks, deep fakes, reply attacks, and 2D and 3D face masks during client onboarding. Face verification not only makes businesses free from fraud but also makes them compliant with KYC regulations.  

Long gone are the days when face recognition was the only concept of sci-fiction movies. With the rising number of identity and data theft cases, verification services have been widely adopted by businesses across the globe.

7 Things Everyone Should Know About Face Recognition Online infographic

Features of Face Recognition Online

Besides just verifying individuals’ authenticity, face verification also has some other features that a few people are aware of. Thus, before deploying this advanced biometric technology, businesses should know what it has in store for them. 

People have privacy and ethical concerns regarding face verification, but its benefits outweigh the two.  Here is how an AI face recognition service is a great bet in this age of digitisation.

 Suggested Read: AI face recognition for total automation

1. Facial Recognition Can also Identify Objects

Face verification technology uses more versatile tools than an individual can think of. It is not only restricted to recognising people but can detect objects too. This means that algorithms can be taught to identify and categorise things such as colours, trees, cars — really anything and everything one can think of — and do it at a massive scale. It is estimated that the facial recognition market will be worth $12.67 billion by 2028. 

2. It’s Just as Good as the Data it is Trained with

Face recognition is an artificial intelligence-powered technology that relies on the data it is trained on. Thus, it is naturally inclined towards developing biases. The leaders should use technologies and best practices to ensure fair and ethical use of AI. 

3. It Makes Customer Experience Much More Secure

Face verification proves to be a great bet as it offers an extra layer of security to any user experience. However, laws can limit the capacity and scope of businesses that can use this service. Thus, educating companies and consumers about the changing regulatory landscape has become a need of the hour. It is crucial to know the data privacy laws that vary from jurisdiction to jurisdiction. Moreover, companies should be crystal-clear about how collected information will be stored or used. 

Suggested Read: Identity Verification Forecast: How Will KYC Evolve in 2023?

4. It Streamlines Many Aspects of Daily Life

Face verification identifies and authenticates an individual using their facial features. Although there are some limitations and policy issues that must be addressed, it has the potential to simplify different aspects of everyday life. It is streamlining travelling and financial transactions, diagnosing different conditions and detecting any possible risks. Not only this, it helps businesses identify legitimate customers across the globe. 

5. There are more Pros than Just Convenience

Face recognition technology is convenient to use and more than this. Law enforcement can use it to find the missing children and identify any suspects. The technology is also used to create a mobile application that helps blind ones read others’ facial expressions. 

6. ​​Current Legislation is a barrier to its Widespread Adoption

Existing rules are the major barrier to adopting a facial recognition system. Many countries have banned its use as it can be used without permission and for illegitimate purposes. Countries not only have to decide how they regulate their use but also what level of government should establish regulations or laws for it. Otherwise, there would be a lot of regulations that make it complex and confusing for the service providers to develop and sell it. 

7. It is Difficult to Hack Facial Recognition

Face verification, unlike other authentication methods, is difficult to hack. The reason is that it uses facial features to verify an individual and give them access to a particular service as compared to passwords that have a higher rate of being hacked by cybercriminals. 

How Shufti Pro Fits in the Puzzle

As technology advances, fraudsters are also revising their tactics to bypass verification services and fulfil their malicious intentions. It is concerning for businesses, be it a bank, educational institution, healthcare, or any other sector, prompting them to have an advanced verification solution in place. This is where Shufti Pro steps in. 

Shufti Pro is offering face verification services that are trusted across the globe and uses AI algorithms to verify the live presence of an individual. It can detect deep fakes and spoof attacks in less than a second. In addition to this, Shufti Pro offers verification services in 230+ countries and territories, supports 150+ languages, and has a remarkable accuracy of 99%. 

Are you confused about how facial recognition online helps businesses prevent fraud and non-compliance fines?

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What To Consider When Implementing Forensic Document Verification Services

What To Consider When Implementing Forensic Document Verification Services

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As the demand for digital products and services has skyrocketed, so does the need for verification services. It is expected that the market value of ID Verification (IDV) will grow by more than 13 billion by 2027. 

The truth is that several companies are still using conventional methods to verify their clients. Those outdated identity verification practices are not only time-taking but also susceptible to human errors making it easy for fraudulent documents to slip through the safety net.

Any sector that deals with financial transactions must follow stringent regulations or be prepared to face the after-shocks of non-compliance. 

Automated Forensic Document Verification – A Need of the Hour

Today, only those businesses can win the race that are integrating Machine learning (ML) and Artificial intelligence (AI) powered  IDV services. With automated verification services, companies no longer have to depend on manual methods of Forensic Document Verification (FDV). They can instead automate the procedures to verify documents accurately and cost-efficiently. Not all IDV services are the same, but leveraging sophisticated FDV can be a key to a fraud-proof future.

Forensic Document Verification – A Brief Overview

FDV incorporates scientific rules to check the authenticity of any records. Popular forensic document authentication techniques use microscopes, ultraviolet light sources, photography and infrared imaging to identify handwriting. Experts in this field use specialised methods, particularly in courts where no individual’s records are accepted without verification.


OCR Technology – Improving Forensic Document Verification

Forensic document verification is as old as the hills, dating back to 539 AD when document fraud was only falsifying someone’s handwriting or changing seals. Today document forgery includes anything and everything from terrorism financing and money laundering to identity theft. Moreover, what is adding fuel to the fire is that scammers are coming up with sophisticated strategies to falsify documents, making it difficult for the human eye to identify them.  

Emerging technologies like Optical Character Recognition (OCR), AI, and ML play a major role in identifying cleverly conducted forgeries. OCR can detect documents more accurately and efficiently than manual verification procedures. It assists financial firms in verifying identity documents from foreign countries, retrieving information and then authenticating it with the in-built matching templates. 

OCR, when combined with ML and AI-powered algorithms, detect any document for irregularities by matching it with the template in the database. Businesses should know that not all firms that provide IDV services offer forensic document verification. They must be aware that not all OCRs function the same and choosing the best service provider for verifying documents is crucial. 

Looking for one of the best OCR service providers that are trusted globally? Contact Shufti Pro

Steps to Implement Forensic Document Verification

Forensic document verification plays a crucial role in Governance, Risk, and Compliance (GRC) reporting and complaint, boosting efficiencies by removing the need for manual procedures. FDV can facilitate firms to stay compliant with evolving regulations like the National Institute of Standards and Technology (NIST), Service Organization Control 2 (SOC2), and the International Organization for Standardization (ISO).

When firms shift towards FDV technology, they have to consider the organisation’s hunger for change, current infrastructure, and the staff training required. 

Gathering Buy-in

Collecting buy-in from leading company leaders and stakeholders is essential for all those firms who want to move towards FDV successfully. Such internal conversations can assist in guiding resource allocation and best use cases. A good tip is to involve C-suite leaders who have expertise in developing, managing, and training the required workforce like Chief Information Security Officers (CISO) as well as risk and compliance officers.  

The primary purpose of implementing FDV is to get maximum efficiency while also abiding by regulations. However, not getting cross-organizational support can make the process a cumbersome thing rather than yielding a positive net. Thus, both bottom-up and top-down buy-in is crucial to support positive culture change. 

Implementing New Technology

Implementing the latest technology in the existing infrastructure and framework, such as identity verification services, has a natural risk. Thus, it is essential to allocate sufficient resources so teams can be aware of emerging identity fraud and keep their systems up-to-date. 

The remaining complaint heavily depends on having a skilled team to implement risk motion strategies. Another risk that firms must consider is compliance’s burden on labour. As updating FDV systems are stressful and complicated, companies should prioritise the well-being of employees in order to avoid turnover. 

Properly Training Staff

The rise of FDV requires accurate information, training, intelligence, and supervision just like implementing any latest technology. As the FDV technologies are highly complicated, more than a single training session to educate staff is required. 

Only through proper training — whether that be seminars, workshops, or toolbox sessions— will the workforce be able to truly recognise their part in the FDV process and how best to curb financial crimes.  

Implementing this approach is not as simple as ABC. It requires a basic culture shift on a corporate level to build a sustainable and risk-free future. 

How Shufti Pro Can Help?

Identity theft and other emerging fraudulent activities impact customer experience and destroy the business’s reputation in the market. Companies are looking for robust IDV services to make their platforms safe and sound. This is precisely where Shufti Pro steps in. 

Shufti Pro offers the latest IDV services, authenticating clients’ documents and helping businesses onboard legitimate customers using OCR and forensic techniques. Shufti Pro’s identity verification services are trusted globally and help companies mitigate financial crime while staying compliant with KYC/AML regulations. Powered by artificial intelligence algorithms, Shufti Pro’s Know Your Customer (KYC) solution authenticates clients’ true identities and gives output in less than a second.

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Top 5 Ways to Improve Transaction Monitoring in Fintech

Top 5 Ways to Improve Transaction Monitoring in Fintech

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Fintech is a fast-growing sector that combines finance and technology to assist businesses and customers in managing payments, funds, and more. It is estimated that fintech revenue will be worth  €188 billion globally by 2024. This makes transaction monitoring a key issue in fintech. 

Although this growth is good news for novices to the market, setting up a fintech company is not the same as starting a business in other sectors. The fintech industry is heavily regulated, and those entering the sector must abide by regulations to avoid heavy fines. 

Another area the sector finds challenging is Anti Money Laundering (AML). Here regulations mandate fintech to conduct comprehensive monitoring of clients’ transactions.

A Bit about Transaction Monitoring in Fintech

Transaction monitoring, the phrase says it all, is the tracking of customers’ transactions. This includes purchases, deposits, transfers, and withdrawals and is usually linked to analysing clients’ historical information to give a complete picture of customers’ activity. 

Transaction monitoring helps fintech and other firms predict clients’ future activity and manage risk. It facilitates businesses in curbing fraud, money laundering, terrorism financing, and different types of financial crimes.   

In this connected world,  transaction tracking and assessment are crucial to satisfy AML and Countering Terrorism Financing (CTF) regulations in addition to other obligatory requirements.


How Does Transaction Monitoring Work in Fintech?

Although the most powerful strategy to track customer transactions in fintech is delegating the task to the workforce to stop and check every transaction manually, it needs more efficiency. Reviewing each transaction before getting it processed is an impractical concept, fails to scale, and needs to be more workable. 

Instead, many fintech sectors will pick an automated AML solution that monitors transactions in real-time and flags any suspicious transactions to be reviewed manually. Taking advantage of automation enables fintech to reduce human error and allot more human capital to review and investigate suspicious behaviour.

When appropriately deployed, a transaction monitoring system detects criminal activity on a broader scale, including bribery, corruption, identity theft, money laundering, and terrorism financing. After detecting the illegal activity, an automated transaction monitoring process issues an alert and the compliance team then does the follow-up assessment. 

Transaction Monitoring Thresholds

Being a financial form, there are many local and international regulations to comply with. FINRA has also published its latest report on the investigation and risk monitoring program.  

FATF has set some standards linked to AML and CTF processes. It recognises the below-mentioned factors as determinants of AML/CTF controls:

  1. How diverse are the operations being conducted in the financial sector? 
  2. What is the scale, nature, and complexity of the firm?
  3. To what degree does the fintech sector deal with intermediaries, third parties, and ‘non-face-to-face’ access? 
  4. What is the distribution channel that the industry is using?
  5. What is the size and volume of transactions taking place?
  6. What is the extent of risk linked to each area of the fintech industry?
  7. What is the financial sector’s product, activity, and client profile? 

Best Practices of AML Transaction Monitoring

All the sectors can pick a KYT verification solution that meets business demands in order to monitor customers’ transactions. Choosing a manual transaction process is an outdated approach these days. Only those businesses can stay ahead of their competitors who use an automated KYT solution that tracks any fraudulent activity in real time.

Tips to Enhance Transaction Monitoring in Fintech

Getting to grips with an AML transaction monitoring system is something the fintech sector is looking to tackle criminal activity. It is because any customer who has ties with Politically Exposed Persons (PEPs) or those on global watchlists could face hefty penalties.  

To provide customers with the best user experience and stay ahead of competitors, making transaction monitoring a frictionless process is crucial. Here’s how companies can hit the ground running with their updated transaction screening solution

1. Understand Customer Risk Factors

Customers carry different risk levels influenced by several historical and current factors like location and industry. Thus, it is crucial to understand the clients’ risk factors if they want to mitigate financial crime. 

2. Create Rules for Each Risk

The fintech sector needs to enact rules for every risk category, be it low, medium, or high, to avoid financial crimes and prevent non-compliance fines. The tip is to create rules that must be dynamic and customisable.  

3. Set Up Alerts

Whenever any AML rule is violated, an alert should be issued. The reason is to notify human alerts that some suspicious activity just happened and that they should gear up for stringent security measures.

4. Notify Compliance Teams

As soon as the alert is triggered, no transaction would be allowed to continue until or unless properly and thoroughly investigated by the risk or compliance team. 

5. Create a SAR

In case, any suspicious activity is detected, generating a Suspicious Activity Report (SAR) is crucial. The transaction into the probe should be reported to the Financial Intelligence  Unit (FIU). This is a cumbersome process but can be made seamless with an automated Know Your Transaction (KYT) solution. 

How Shufti Pro Fits in the Puzzle

Although it is tempting to handle the KYT verification manually, the value of a sophisticated AML solution can’t be overlooked. Moreover, the changing regulatory landscape and complex nature of financial crime make AML transaction monitoring a complex element of compliance. 

A globally trusted AML transaction monitoring solution offered by Shufti Pro is the go-to option for the fintech sector to comply with AML regulations. Screening against 1700+ global watchlists and available in 230+ countries and territories, Shufti Pro’s transaction solution is a great bet to make the premises safe and sound.

Do you need clarification on choosing the best AML solution for your business?

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