digital customer

Digital customer onboarding – Revamping onboarding process in banks

The first impression is what counts most when it comes to customer-oriented services. Banks and financial institutions are in fierce competition to make a remarkable first impression in the very first interaction with the customer i.e client onboarding process. 

How can banks ensure their customer onboarding process is seamless? What are the factors to be considered to provide an ideal onboarding experience to customers?

Digital customer onboarding in seconds is the answer!

Over the last few months, banks and financial institutions have witnessed a rapid transformation in their customer onboarding process due to COVID-19 pandemic. These unforeseen challenges have existed already and the industry started revamping their processes. According to Ron Shevlin, “digital account openings surged long before the pandemic”.

Banks have started recognising the prodigious potential of digitisation. Financial institutions are rapidly adopting advanced measures with a stronger focus on their online presence to cater to the customer needs as they go digital. In all this, digital customer onboarding has attained quite a popularity in the banking world.

Why is the digital customer onboarding process important?

Most of the enterprises lose their potential customer at initial stages because of an inefficient process in place when it comes to onboarding. Customer onboarding is the official beginning of the customer-business relationship. It is the first step of interaction between a customer and the bank. What if your onboarding process is tedious and time-consuming? Do you think the customer would want to continue? Of course, not. 

Think of the onboarding process as bidding, the better your customer service the more clients will be inclined towards your institution in initiating the relationship, otherwise they always have an option to find a better institution. With digital customer onboarding, banks can streamline their customer acquisition process with enhanced customer experience. Unfortunately, traditional processes are no more reliable since the customers are more interested in digital account opening.

Why traditional customer onboarding is not reliable?

Customers are shifting their interest to the digital sphere and require solutions that can fit their needs. Traditional onboarding is affecting organisational workflow, and hence a low conversion rate.

Here are some reasons why traditional onboarding is not an option these days

  1. The process requires the customers to be physically present during the onboarding process and submit their identity documents, which is quite cumbersome.
  2. The whole onboarding process is time-consuming and can take up to weeks due to involvement of multiple stakeholders. 
  3. It involves paperwork and therefore, can be prone to manual error.
  4. The whole process can cripple service delivery and customers are likely to abandon the process middle way.

Customer Onboarding and KYC in banks

Know your customer (KYC) and customer onboarding are inter-related terms in the banking industry. Banks and financial institutions are obliged to ensure KYC checks during the customer onboarding process as part of KYC and AML regulations. Identity verification is the fundamental part of KYC and that’s what banks do in their customer onboarding process. 

Customer onboarding is a crucial process for financial institutions because of stringent regulatory obligations. Apart from verification, banks are required to conduct due diligence of customers as well to analyse the associated risks with them. If a customer fails to verify their identity or has high risk-factor then banks can reject the account approval request.

Identity verification – Making digital onboarding secure

Digital onboarding is now becoming new normal. Neglecting the need for a better and enhanced onboarding process is not even an option. With the increasing trend of financial crimes and frauds, banks are under the continuous scrutiny of the global regulators. Onboarding criminals and identity thieves can taint the bank reputation leading to monetary penalties. Therefore, they need to be very vigilant in verifying the identity of their customers during the onboarding process.

With AI-powered identity verification solution in place, banks can securely and efficiently verify the true identity of their customers in real-time. ID verification eliminates time-consuming manual KYC process and allows banks to onboard customers within seconds. With identity frauds on the rise, organisations are facing immense losses and damaged brand reputation.

New account fraud is quite hard to detect since fraudsters use either legitimate yet stolen information of real individuals or synthetic identities to open a new bank account. Traditional methods are not efficient to detect fake customers. But, with ID verification solution including document verification and biometric authentication, enterprises can identify fraudsters in real-time.

Incorporating identity verification for KYC ensures that the identity is real along with the assurance that the client applying for a new bank account is actually the same person owning the identity being claimed.

new account

What an ideal onboarding experience look like?

You never get a second chance to make a good first impression; the same saying goes with client onboarding experience as well. If you are not providing your customers with exceptional experience in the first go then, they will abandon services middle way. While designing the onboarding process some points much be checked to provide an ideal onboarding experience. These include:

  1. Speed – The process has to be fast enough to verify the customer in real-time
  2. Digital – To eliminate the branch visits
  3. Global – To onboard customers from anywhere, anytime
  4. Paperless – No paper contracts to sign or form-filling; everything must be online
  5. Fully Complaint – To fulfil KYC & AML regulatory requirements
  6. Secure – To combat fraudsters and keeping the consumer’s data safe

It all boils down to…

With Fintech already providing seamless customer experience, digital customer onboarding is something every bank needs in order to survive the competitive financial world. Now banks can onboard customers in real-time with Shufti Pro’s KYC – identity verification solution. Shufti Pro provides secure and quick digital onboarding through government issues ID document verification.

Have more questions on how Shufti Pro can help you? Share your concerns with our team and get a solution as per your business needs!

Fincen files

FinCEN Files – Banks abandoning front-line defences against money laundering

Banks and financial institutions are under the continuous scrutiny of regulatory authorities, yet, some of them are abandoning their roles in deterring money laundering. The leaked documents revealed trillions of dollars of dirty money are being circulated around the globe by the world’s largest banks.

The blog covers detailed insight into the leaked FinCEN Files to highlight the increasing trend of suspicious activity reports (SARs). 

Recently, secret US government documents alleged five major banks to defy money laundering rules by moving a large amount of money for criminal networks and shadowy networks. This illicit movement of funds has resulted in turmoil and undermined democracy across the globe. According to the ICIJ report, the leaked records indicate that the five global banks kept benefiting from dangerous players even after being penalised by the US authorities for failure to combat money laundering. 

The analysis by ICIJ asserted that big banks continue to move money for the entities they can’t even identify and fail to report the suspicious transactions even for a longer period of time. Is this a negligence of law enforcement agencies or the banks are unable to streamline their processes? The US money laundering law enforcement agencies rarely indict megabanks that are involved in money laundering scandals. In fact, the actions authorities take such as money laundering fines are not enough to wash black money through the international financial system.

Money laundering isn’t a victimless crime

The unsupervised cash flow not only helps support criminal organisations but also leads to a destabilized economy. Laundered funds usually flow between the accounts owned by shell companies that are registered in furtive offshore tax havens. It allows the elites and business tycoons to hide massive sums of money from tax authorities and law enforcement agencies. 

Read more: 3 stages of money laundering

FinCEN Files and ICIJ analysis

Over 2,100 suspicious activity reports (SARs) comprising more than $2 trillion in transactions were leaked from FinCEN and shared with the international Consortium of Investigative Journalists (ICIJ). Around two weeks ago FinCEN predicted that some media organisations were planning to publish stories regarding the leaked documents. In fact, before this warning, FinCEN was seeking public comments regarding improvement in anti-money laundering system in the US.

Along with examining the FinCEN Files, ICIJ and other media partners collected more than 17,600 other records from different sources including court files, insiders and whistleblowers, freedom-of-information requests and some other resources.

The analysis by ICIJ indicated that banks and financial institutions mentioned in FinCEN Files frequently processed transactions to offshore companies registered in so-called secretive jurisdictions, and that too without knowing the owner of the account. According to ICIJ report,

At least 20% of the FinCEN reports contained a customer having an address of the British Virgin Islands – one of the top-world offshore financial havens.

Apart, many other reports included the addresses in the US, the UK, Hong Kong, Cyprus, Russia, Switzerland, and United Arab Emirates (UAE).

Another key finding of ICIJ includes that in 50% of the reports, the banks didn’t possess any information about the entities behind the transactions. And in 160 reports, even though banks investigated corporate vehicles but got no response.

illict funds laudering

Everyone is doing badly!

The executive secretary of Paris-based FATF, David Lewis, claimed in his interview with ICIJ that “Everyone is doing badly”. The evaluation reports of FATF (Paris) digged into the performance of government agencies and banks to meet anti-money laundering (AML) laws and regulations. The report highlights a lot of paperwork with little practical progress. Lewis declared that many countries are focusing on the check boxes to look good on papers instead of cracking down the money laundering.

We can’t blame only financial institutions or government agencies, both are equally responsible for the increasing trend of money laundering. Last year, an association of the world’s biggest banks criticised that regulators are more concerned about technical compliance instead rather than knowing if the systems are actually making a difference in combating financial crime.

Penalties are not enough to stop money laundering

FinCEN Files provide prodigious insight into the secret world of international banking, secretive tax havens and financial crimes. These files show banks blindly allowing cash flows for years without even identifying the owner of accounts or the source of funds. The US authorities working to combat money laundering and financial crimes have previously fined banks millions and billions of dollars. 

A 16-month investigation by ICIJ demonstrates that these penalties are not enough to stop money laundering. Big banks contiue playing significant role in transferring dirty money associated with corruptions, organised crims, terrorism and fraud. According to FinCEN Files, five giant banks have been named in the investigation – JPMorgan Chase, Standard Chartered, HSBC, Deutsche Bank and Bank of New York Mellon.

FinCEN files - top banks with most SARs

These banks have repeatedly violated their promises to show good behavior and deter money laundering, explains the leaked documents. 

Let’s consider an example of Standard Chartered Bank

Standard Chartered Bank 

Back in 2003, the incident of the Jerusalem bus bombing took place. By 2010, a lawsuit against an Arab Bank – Jordanian financial institution – was filed for moving funds that facilitated bankroll terrorists who were involved in bus bombing and other attacks. FinCEN Files uncovered the working relationship of Arab bank with a giant influential bank – Standard Chartered.

Standard Chartered bank supported the Arab Bank clients in accessing the US financial system even after the regulatory authorities found weak money laundering checks in 2015, forcing to halt funds-transfer activities in the US. Moreover, the UK- headquartered banks continued its relationship with the Arab even after the regulatory authorities issued the notice to stop serving the suspects.

In 2012, New York regulators reasoned that Standard Chartered had schemed with Iranian government for more than a decade profiting millions of dollars in fees. As a result, the Us financial system is left vulnerable to corrupt entities, organised criminals and terrorists. This scheme cost Standard Chartered almost 670 million-dollar penalty in the second half of 2012 by New York regulators and US authorities.

Despite all, Standard Chartered processed around 2,055 transactions for Arab Bank customers between September 2013 and September 2014 – summing up more than $24 million – shows FinCEN Files. Moreover, Standard Chartered moved $12 million more in transaction for Arab Bank till February 2016 – according to follow-up SAR. 

Why financial penalties are not enough to change bank’s behavior?

Apart from Standard Chartered Bank, JP Morgan, HSBC, Deutsche bank and other banks represent the similar stories of not changing their behavior in combating money laundering? What can be the reason? These bank cases point out two major things; either the regulatory authorities are not putting enough pressure on the banks or the banks are not affected with these financial penalties.

A financial crime expert, John Cassara, who has previously worked as a special agent of FinCEN, pointed to the later cause. According to him, the financial fines imposed by law enforcement authorities may sound as a huge amount but for banks it’s equal to a little fraction of profit. Moreover, this fine isn’t paid by the bankers but the shareholders. 

James S. Henry, a New York-based economist says only if the banks and bankers are held accountable then we can witness some impact on large banks’ behavior in tackling illicit cash-flows. He stated,

“We have to put some senior executives who are in charge of this stuff at risk. And that means fines and/or jail.”

Money Mules

Jobs in the frame for money laundering

How banks can detect money mules?

Remote jobs are trending but not every job is legitimate. Some jobs can land you in jail.

This blog highlights how job scams are turning employers into money launderers and how banks can detect these money mules to comply with changing regulations.

Ever come across job listings that require an employee to handle funds and process payments for the employer? Seems like an easy job, but beware! You might end up being a money mule. And the interesting part is you won’t even know about it. With all this pandemic situation going on, remote jobs are trending, providing an opportunity for financial criminals to target job seekers and turn them into money mules.

Detecting money mules is no longer easy!

Generally, criminal groups hire individuals that are willing to participate in illicit funds transfers. Typically they are instructed on what they are supposed to do and what should be done to surpass checks by financial institutions and law enforcement authorities. Many of these participants open bank accounts with the intention to deposit or transfer illicit funds to overseas accounts controlled by criminal organisations. In this scenario, the banks already conduct due diligence on their customers at the account opening stage and can detect suspicious activity from accounts.

On the other hand, sometimes money mules are unaware that they are committing a crime that makes the due diligence process much more difficult. In such scenarios, criminal organisations use various tactics to trick victims into becoming money mules unknowingly. In such cases, the targeted recruits may have already been classified as low-risk customers by financial institutions. Undoubtedly, money launderers prefer such a set-up because it adds a perception that all the transactions being processed are legitimate.

How do ‘money mule’ job scams work?

Identifying professional money mules is easier than detecting the money laundering from low-risk authentic customers. That’s the reason why criminals target such individuals. Job seekers are often targeted by criminal organisations to move small amounts of cash using their personal bank accounts. In all this process, individuals become money mules, oblivious of the fact that they are being exploited by the financial criminals.

How job scams can turn into money laundering?

Money launderers and financial criminals apply various legitimate-looking tactics to trick individuals. Some of these techniques include:

  • Online job postings offering easy and lucrative remote job opportunities.
  • Sending out emails stating that they are hiring employees who can process their payments and transfer funds.
  • Fake job postings in which the international employer asks a candidate to transfer funds and make payments from an employee’s bank account.
  • Promising a certain percentage for using your bank account to transfer payments.

4 ways banks can detect money mules

Banks and financial institutions are under the continuous scrutiny of regulatory authorities. Combatting money laundering and financial crimes has never been this important as it is now. Proper AML checks must be put in place to comply with stringent AML/CFT regulations. The significant challenge is to identify low-profile money mules who are unaware of the fraud they are committing by transferring illicit funds.

Here are four strategies that banks can incorporate to detect money mules and comply with changing AML regulations.

Transaction Monitoring

To be aware of higher-risk transactions is crucial for banks and ongoing account monitoring of customer accounts is a necessity to look out for any red flags and unusual suspicious activity. The activities such as currency-insensitive transactions, continuous cash flow from the account, funds transfers to and from high-risk jurisdictions and frequent ownership changing of some business entity, are what considered suspicious.

For instance, if an individual working with a company or a money transfer agent starts receiving numerous cash deposits in their account that are shortly sent through wire transfer, then the bank should conduct the due diligence. The purpose is to not only to verify the purpose of these transactions but to also know the beneficiaries of these transfers.

Financial institutions must incorporate know your transaction (KYT) process to ensure that the transactions being processed are legitimate and don’t pose any risk of money laundering. Moreover, the compliance officer must ensure an intelligent and automated transaction monitoring system to successfully fetch the identity of the beneficiary and geographic location along with the date of a transaction.

Failure to monitor transactions can land financial institutions in a complex situation where the important risk factors such as potential involvement of politically-exposed person (PEPs), jurisdictions, and high-risk countries are not taken into account. It makes it nearly impossible for the banks to investigate and detect potentially suspicious transactions.

Know the ‘Ultimate Beneficial Owners (UBOs)’

Criminal organisations can use various tactics to trap individuals, one of which is to convince the individuals having accounts in British or American banks to open trusts and shell companies as a part of their legitimate job. Sometimes, the illegal funds have already been deposited into the account of mules (the victims). The hidden purpose is to obscure the beneficial owner – might be the head of a criminal network – with the shell corporations.

These shell firms are formed mysteriously such as Panama and are generally called Private Investment Corporations (PICs). It is crucial for the banks to verify and establish trust in the use of these legally-structured PICs and efficiently follow any strategy to know the ultimate beneficial owner of these corporations. Identifying and monitoring beneficial owners came under the guidance issued by UK’s Joint Money Laundering Steering Group in 2007.

Moreover, with the fifth AML directive coming into effect, the obliged entities are mandated to implement beneficial ownership registry. It is vital for the banks and financial institutions to collect and maintain current and accurate information about the beneficial owners.

Watch where the money goes!

One easy way to identify the money mules is to track where the money is sent. Most of the times, money mules working for criminal organisations have no idea to whom they are transferring the money since they only follow the instructions they are given. Such funds are most likely to be transferred to the high-risk countries having low assessment ratings according to FATF’s evaluation report.

With the funds moving to jurisdictions with weak anti-money laundering checks and systems, red flags must be raised for the banks. Ignoring them is not even an option. Recently this year, the Deutsche Bank Epstein’s fine highlights important lessons for the financial institutions. The bank was fined for financial dealings with a criminal and funds flow through two banks involved in large-scale money laundering scandals.

Banks must keenly monitor where the money goes and question their clients about the purpose of payments and the sources of money to detect money laundering.

Pay heed to originating countries

Informal and unusual funds transfer can be easily detected by paying continuous and close attention to the country of origin of the transaction in question. Such suspicious transactions mostly originate from the countries with weak AML controls in place and whose residents have been indicted by fraud prevention authorities for financial scams and money laundering.

Recently 80 individuals are arraigned by the U.S Justice Department for involvement in the money laundering scheme and massive business email scams, valued at approximately $3 billion. 78 out of these accused individuals are Nigerians. Undoubtedly, Nigerian scams have been making headlines for the last few months. In such a scenario, any financial relationship with residents of Nigeria is a red flag. And it must provoke compliance officers to investigate the financial dealings of the customers.

Additionally, when the customer is unaware of laundering money, they are likely to provide valuable information to the compliance officer or the bank authorities. For instance, the customer can inform the bank about the source of money, the purpose for which this money is going to be used – a customer may tell the officer that the funds are to be invested in some profitable business.

All this information from the customers can lay a strong foundation for the investigation of the transaction resulting in the detection and combating of money laundering. With this information in hand, the bank can further initiate Know Your Business (KYB) process for business verification through ‘company registration number’ and ‘jurisdiction code’.

It all boils down to ongoing KYC and AML

Detecting accidental money mules is difficult but not impossible. With adequate steps in place, banks can effectively disclose and report money laundering activities to comply with changing AML regulations. One-time customer verification and screening is not enough, especially in the case of low-risk customers. You never know when these individuals can turn into high-risk stakeholders of your organization. Therefore, ongoing KYC and AML checks are essential to timely identify the risks associated with customers.


E-commerce Frauds – Common types and Prevention tips

What are some common e-commerce frauds and how can you prevent them? Is the buyer on your site an authentic individual? 

Preventing e-commerce business from fraudsters requires proper awareness of potential frauds, best practices and the right tools to combat con-artists. 

The blog covers potential types of e-commerce fraud followed by tips to prevent them. 

“Stay home, stay safe” – the common phrase that we have become accustomed to these days. The fear of Coronavirus has confined people to their homes and forced organisations to operate remotely. In all this crucial time, there is one industry that seems to be striking higher sales contrary to previous years, and that is e-commerce. Over the last few years, the e-commerce market is booming and will continue to grow even more this year,  and so is the e-commerce fraud.

E-commerce market hitting new records

According to the Signal Science Research report, online sales are expected to reach over $630 billion this year. The businesses that were previously operating as a store-first, have now shifted to e-commerce stores, with online becoming the fundamental channel. Going back to a brick-to-mortar framework is not even an option. 

Businesses need a digital transformation in order to survive this new wave of online shopping. Earlier this year, Forter released a report, indicating the steady increases in volumes of online consumer purchasing and the impact on the businesses to readjust to their business strategies.

ecommerce infographic

With the excitement of retailers for higher projected sales comes the threat of cyberattacks and retail fraud. Online retailers are more prone to sophisticated attacks and cybercriminal activities due to the lack of adequate identity verification checks and strategic framework for fraud detection and prevention. According to Signal Science report 2019, it is expected that the con-artists will cause loss of more than $12 billion in the U.S. alone by the end of 2020.

These direct financial losses are not the only part of a picture. The bad customer experiences and damage that come with these losses further destroys the brand reputation.

Common e-commerce fraud types

Fraudsters may use countless methods to get to consumers accounts and fulfil their malicious intents. These methods are not limited to a few numbers, it’s all up to their imagination. However, there are some techniques that these perpetrators of financial crimes commonly follow, that includes 

Classic/True fraud:

It is the simplest kind of online fraud where the fraudsters purchase or steal a victim’s personal and credit card details from the dark web. This information is further used to make an unauthorised purchase from the site that leads to a purchase dispute from the customer’s side. This method is usually followed by newbies. 

Triangulation fraud:

As the name represents, it involves three parties in the fraud, an E-commerce business, a fraudster and a legitimate shopper. The fraudster sets up an online e-commerce store that sells high-demand products at low prices. When the customers place an order on their site, they use their credit card details to purchase products from a legitimate e-commerce site.

Interception fraud:

In this fraud, criminals make an order using a legitimate credit card where the billing and shipping address match the information associated with the card. Later, they try to intercept the order by various methods. For instance, by asking the customer service to change the shipping address.

Chargeback fraud:

This type of fraud usually happens after the product is delivered. A customer places an online order but then claims for a chargeback stating their card was stolen. It is the most common fraud and difficult to detect because sometimes the legitimate customers are involved in it.

Account takeover and fraudulent chargebacks

E-commerce frauds and scams are rising amid COVID-19 pandemic. Fraudsters are becoming smarter in their tactics to separate you from your money. These frauds used to be common around the holiday period but now are occurring all year round. Only in 2020, Forter analysed 179% increase in ‘Account Takeover (ATO) attempts; but this isn’t the only scam. 

Read more: Account takeover frauds – Impact, causes and prevention

Sometimes you might encounter identity thieves on your site that would seem the legitimate consumers, but if not detected timely can cause you a fortune tainting the brand reputation

Living in the digital world, account takeover isn’t a difficult task. Imposters are becoming successful in tricking users to disclose their account credentials through phishing and social engineering tactics. Once the fraudsters get account details, they can easily make purchases which result in chargebacks.

Chargeback frauds are usually categorised into two major types:

  1. False/Friendly chargeback It happens when an authorised consumer makes an order and after receiving the order claims chargeback stating various reasons, for example, they didn’t make a purchase someone else did through their credit card and their credit card was stolen. Customers usually do this to enjoy free products.
  2. Fraudulent chargeback It happens when an imposter uses the stolen accounts to make orders and the legitimate owner of the card claims chargeback.

Whatever the case is, e-commerce business has to suffer the loss. 

How to prevent e-commerce frauds?

Now that we are clear about various types of eCommerce frauds, what should be done to prevent them? From the discussion above, one thing is clear that all these frauds are a result of inefficient identity checks. 

Here are a few ways to protect your e-commerce business from fraudsters.

Integrate Identity verification services

Identity verification is spiking in demand due to an increasing trend of online frauds and the e-commerce sector is no exception. The e-commerce industry is one of the most targeted industries by fraudsters. Identity verification solutions facilitate business owners to deter scammers and fraudsters. Through document verification, the business can have evidence of the real identity of the customer during the account opening process.

In addition, the AI-powered ID verification mitigates card-not-present (CNP) and chargeback frauds ensuring that only authorised customers are able to process the order. 

Implement biometric authentication

Unauthorised access to the platform is the foundation of eCommerce frauds. Traditional checks – username and passwords – have failed to adequately authenticate the customers. You know the credentials you are in. How will you ensure that your customers are who they say they are? Biometric authentication is the answer. Biometrics are the distinct human traits that can’t be stolen or forged. 

Biometric technology, especially face verification is the secure and efficient method of customer authentication. With the features like liveness detection and 3D-depth analysis, the remote presence of authorised user can be ensured at the time of authentication. This eliminates the risk of account takeover fraud and identity theft. 


A guide to choosing the right ‘Digital Identity Verification Solution’

Living in the digital era, everything is now just a click away. From customer onboarding to online payments, personal information is what we consider the most valuable resource. Businesses are striving hard to implement processes that will let users to efficiently perform their tasks in digital space. Identity verification is an emerging market in the digital sphere that is becoming a need for every digital business. 

An increasing number of organizations are opting for digital customer verification solutions. But numerous challenges are waiting for them. What qualities to look for  in identity verification solution? How to efficiently and securely connect users’ digital and physical identities in a convenient way? 

We’ll cover these questions in our blog. The first section will cover the challenges of digitization followed by key considerations for selecting digital verification solutions. Finally, we’ll discuss the important features of an efficient ID verification solution.

Choosing the service-provider that brings transparency and security for the organisation is essential.

Digital Challenges laying a foundation of Identity verification

Digitization has become a necessity for every business. With this digital transformation comes the significant challenges for organisations. To address them while protecting the business from potential threats and frauds, enterprises are investing their resources more than before. The presence of an immense number of individuals in digital spaces is threatening itself. You never know the real identity and intention of an individual present online. That’s the reason why online identity verification is spiking in demand.

Although identity verification is not new, the incentives it offers are now enhanced. Trust is something that must be established between an organisation and a customer. With trust, comes efficiency and convenience. Undoubtedly, online businesses will always be under the radar of fraudsters and cybercriminals. There doesn’t exist any bulletproof solution yet that can fully deter fraudulent activities. Currently, the goal is to minimize these risks, if not prevent them fully. 

Identity verification is the solution to overcome these hurdles. As digital identity becomes prevalent, extra layers of security checks are required to authenticate the user. However, with digitization, user expectations have become even more eminent when selecting the product or service. This conveys a clear indication for the companies to go an extra mile and incorporate identity verification solution that offers incentives beyond the traditional solutions.

Databases – the beginning of digital identity

Data is a goldmine for cybercriminals. The creation of databases by banks, government agencies and other private companies was another beginning of digital identity. With the advent of technologies such as big data, consumer information is the new currency in the digital world. This readily present information of users is the core driver for the increase in data breaches.


Online activities are emerging and the need to protect user data is crucial than ever. The rising trend of data breaches is forcing companies to raise trust in their digital services. According to the Risk-Based Security breach report, the business sector was responsible for  84.6% of records compromised in 2019. This urges companies to rush their identity verification.

Considerations for the company before selecting the solution

Ready to incorporate identity verification solution, but wait did you do your homework? You can’t just randomly select any solution and expect it to cater to your needs efficiently. There are some key points that must be taken into consideration before choosing the identity verification solution.

Evaluate your needs

It’s a well-understood fact that every use case requires a different level of user authentication and security. For instance, if your business needs a simple verification system that checks and the identity of people entering your office, more likely an attendance system, the simple biometric fingerprint verification will do the job. In this scenario, the enterprise won’t need an expensive solution with multiple checks. 

Contrary to this, enterprises dealing with critical data such as banks, financial institutions, crypto firms, etc. require comprehensive identity verification solutions. The reason is mere customer authentication is not enough, KYC and AML regulations further oblige AML screening and cross-checking against multiple data sources. So, the first step before selecting the ID verification solution, be clear about your needs and business demands.

Analyse the process flow

What set of information do you need to verify the identity of your consumers? What services does your business require? What will be the steps involved in the verification process? These are some vital questions that businesses must answer when opting for the right verification solution. If your company only needs an identity document to verify the user’s identity then don’t include an extra facial recognition check.

This happens in case of the gaming industry, liquor stores, and age-restricted sites that only need identity verification service for age verification of their customers. Sometimes, companies make the biggest mistake of including unnecessary features in the process assuming it will improve the overall process. However, most of the time it turns out to be opposite, creating friction. Less is more! Your emphasis must be on what is actually needed and that’s the key to determine right services.

Tracking customer behaviour

Customer behaviour is a significant factor in the success of an enterprise. Businesses need to track customer behaviour in regard to omnichannel presence. It’s vital for a company to analyse whether consumers use mobiles or desktops to carry out their activities. At the planning phase, the right fit for every channel must be decided. The reason is every channel has unique characteristics and presents different challenges, for example, the responsiveness of solution on mobile.

So, whatever strategy, you’re planning to opt, mobile-first or desktop-first, ensure the process consistency and smooth customer interaction. 

Balancing security and user experience

Authorising the user’s identity while ensuring the seamless user experience is a significant challenge companies encounter. The balance between user experience and security of the enterprise must be achieved. The incentives of the identity verification process are enormous, however, only in case of right use case and the appropriate solution. For instance, users are more likely to follow extensive ID checks while accessing bank accounts rather than a social media account.

Before selecting the solutions, it is vital for a business to analyse the worth of the service and how likely the users will adapt their processes – and of course the user flow. The identity verification solutions need to establish a certain threshold. For instance, while incorporating facial recognition service for ID verification, any match above the defined threshold must be accounted for a match.

It is essential to ensure that  the defined threshold for ID verification is neither too low that will increase the risk of false positives and hence, security vulnerable, nor it is too high to reject the good match, ultimately affecting user experience. While incorporating the solution, make sure that every step provides great user experience while remaining secure. Because in the end, it’s all about the user journey and how likely they’ll complete the process.

Checklist for Identity verification solution

Once you have decided to integrate an online identity verification solution. The next step is to go through an identity verification solution market. Some features must be checked for efficient verification of customers. Here’s our checklist for features that need to be analysed while selecting the solution.


Global coverage

Mostly online IDV solutions offer coverage within the country only because of lack of access to country-specific information databases. Every country has its own laws and regulations and information availability also differs. Your customers can be from any part of the world and letting them go just because your vendor doesn’t offer global coverage is unsatisfactory.

Ensure that the selected verification service offers global coverage empowering you to verify ID documents of your customers from all over the world.

Real-time verification

Real-time verification is one of the essential features to look for in an identity verification solution. The ability to verify the user identity within seconds while they’re in the middle of registration has become an important factor to strike balance between security and customer experience. Delayed verification processes result in lost conversions.

Geolocation services

Online frauds are rising and enterprises need a solution that offers an extra layer of security to deter fraud in real-time. Geographical information, IP address, mobile & device specifications, timestamps, all these features formulate a strong foundation for the business to assess any potential risks.

Globally compliant solution

Is your selected IDV solution compliant with the relevant global regulations? The question that you must answer before implementing the identity verification process. Identity checks are well-known in organisations, still, many of them have to face severe legal penalties due to non-compliance with the regulations. KYC and AML regulations are becoming stringent. Select a solution that easily adapts the changing compliance requirements. 

Legal enforceability

Is your service-provider following proper data security standards? You wouldn’t want your consumers’ data to go into wrong hands right? Ensure that the agreement between the company and the IDV solution provider is legally enforceable. Always know beforehand, what happens to the data once the customer decides to opt-out of the service. The best solution is the one that is compliant with GDPR and other consumers data protection laws.

Paperless process

To carry out the identity verification process, consent from the user is obligatory. But how to take consent from remote customers? Does the online IDV solution drop paper and wet signature process while digitally capturing the consent from the user? Look out for the solution that offers consent verification service to take and verify the consent from the user. It facilitates the enterprises to avoid any false defamation cases while staying compliant to the data protection regulations.

API and documentation availability

API docs are a valuable component of any solution. It allows you to deeply understand the solution, its flexibility and process flow, and evaluate the IDV provider. Comprehensive documentation presents clear requirements that you need to fulfil to build out an integration. Do check out the API of the IDV solution before integrating and if they are providing you with a free trial of the service then it’s a cherry on top.

Customised functions

What features do your businesses need? A simple biometric verification service or a complete IDV solution offering AML screening and document verification? Not every service provider will offer you a customised package. The best solution provider is the one who understands the business needs and requirements and accordingly offers the services.

Ensure that the selected verification service offers global coverage empowering you to verify ID documents of your customers from all over the world.

It all boils down to

With the advancement in technology, organisations are actively turning towards digital solutions to cater to the growing demands of customers and needs of the business. Identity verification is now mission-critical for business operations. Having a seamless verification process will not only incline the users to employ your services but will also benefit the organisation in the long run. The first impression goes a long way and that’s how Shufti Pro’s identity verification solution is designed.

At Shufti Pro, we ensure to achieve the best identity verification solution through hybrid technology of human and artificial intelligence. The IDV solution verifies people in real-time within 30-60 seconds and provides reliable proof of verification. Taking into consideration the unique expectations and requirements of the company, it offers a customised solution with pay as you go pricing feature. To sum up Shufti Pro is one in all solution to cater your customer verification needs.

Have more questions on how Shufti Pro can help you? Share your concerns with our team and get a solution as per your business needs!

Have more questions on how Shufti Pro can help you? Share your concerns with our team and get a solution as per your business needs!

key market trends

5 Key Market Trends in Identity Verification

The year 2020 has caused a dramatic shift in the business industry and our way of living.  The significant change post-COVID-19 pandemic is our extended relationship with technology. Looking a few years back, the things we considered ‘a thing of future’ have now become a ‘new normal’. Individuals and businesses are turning towards the adoption of digital channels and services to bridge the gap between ‘in-person’ and remote work.

With digitization comes the cyber threats and security vulnerabilities. To address these security challenges the demand for identity verification is increasing. According to the Mordor Intelligence Report, the identity verification market is expected to grow at a CAGR of 13.1% over the forecast period, 2020-2025. The new verification services are actively responding to escalating cyber threats and vulnerabilities in the organisations.

Blockchain-based Identity Verification

Technology is advancing and traditional methods are becoming outdated. Technology experts are introducing blockchain-based identity verification solutions for enhanced security and business operations. 

Identity verification is now very apparent in the financial industry and businesses where the individuals and businesses are required to open accounts, make online payments through digital channels, apply for loans and carry out other financial activities online. Apart from financial institutions, every organisation dealing with consumers online now requires to incorporate identity verification channels.

Adoption of BYOD trends in organisations drives the identity verification market

The adoption of ‘bring your own devices (BYOD)’ trend in the industry is driving the identity verification market. The BYOD concept gained more traction since the COVID-19 outbreak when the organisations were forced to operate remotely. With this shift in events, the medium and large-scale enterprises are striving hard to address the emerging security challenges while enjoying employee satisfaction and cost-cutting opportunities. 

Earlier, in March, the Department of Homeland Security’s Cyber Agency (CISA) highlighted the cyber threats linked to ‘work from home’ as compared to in-office jobs. With a BYOD approach, there’s a potential vulnerability around virtual private networks (VPNs). The organisations are required to turn towards integral security measures. 

Biometric verification, especially facial recognition, is becoming readily available on the majority of the smart devices. In the upcoming years, identity verification will be the most effective and secure measure for employee verification. Biometric scanners and facial recognition technology will be widely used by the enterprises to verify and authenticate employee identity before granting access to corporate data through BYOD.

In addition, the payment industry has shifted from cash to mobile payments. And they already started incorporating AI-powered identity verification solutions to combat fraud in real-time and authenticate customer identity and transactions.

COVID-19 has observed a striking shift in the business processes and con-artists know this too

Digital identity verification is witnessing a spike in demand COVID, driven by COVID- 19 pandemic. Organisations and businesses have shifted towards remote work during the pandemic. This sudden paradigm shift has resulted in increased demand for video-conferencing tools such as Zoom. Though remote working is a new normal, we can’t deny the security challenges that come with this new trend.

While businesses are shifting technology capacity on digital platforms to alleviate the impact of the outbreak, fraudsters are exploiting the situation to capitalize on inefficient security checks. They are using chaos and confusions to trick the victims into frauds scams using email and SMS phishing scams.

COVID-19 Frauds

According to Checkpoint, more than 4,000 coronavirus-themed website domains have been introduced since January 2020. Some of them are with the intention of running email campaigns to trick victims into clicking the malicious links. In addition, online scams have trapped more than 16,352 victims in online shipping fraud during this pandemic, since the physical stores were closed – reported, the United Kingdom’s National Fraud and Cybercrime Reporting centre.

Apart from online platforms, Fintech lenders and banks have also witnessed a surge in lending fraud attacks during a pandemic. These frauds were declared as first and third-party application frauds and synthetic identity fraud (SIF). Digital businesses, therefore, need to be extremely vigilant in their customer onboarding and verification processes to detect and prevent application and synthetic ID fraud.

Furthermore, businesses with existing customers are highly susceptible to phishing attacks and account takeover frauds. Hence, organisations need to streamline their user authentication process to detect and prevent any possible identity fraud and avoid financial losses in real-time.

WP Business Fraud

The need for compliance and stringent AML regulations drive the market

The Bank Secrecy Act of 1979 (BSA), introduced to deter the illegal fundings, laid foundations of KYC and AML regulations for banks and other financial institutions. Customer Identification Program (CIP) is one of the requirements of KYC laws; making identity verification an integral part of financial institutions. With technology advancing, the regulatory authorities are becoming more stringent towards KYC and AML compliance.

Earlier this year, the EU’s Fifth AML Directive came into effect from January 10, 2020, that set out new guidelines for the financial businesses. AMLD5 reduced the identity verification threshold for the payment card industry from EUR 250 to EUR 150, enhancing the scope of AML regulations. Moreover, FATF expanded the scope of reporting while recommending the member countries to mandate art dealers, legal professionals, and virtual asset dealers to perform AML screening on their customers.

These advancing regulations are enforcing organisations to redefine their KYC processes and hence, driving identity verification market.

Identity verification is an old concept but the incentives are now greater than ever

Financial businesses are already very much familiar with the term identity verification. Organisations are actively incorporating identity verification solutions to comply with KYC/AML regulations while mitigating the risk of identity fraud during the onboarding process. Traditionally, identity verification takes place when a customer handovers government-issued valid ID documents during the onboarding process; and usually takes few weeks for process completion. But not any more!

How do you expect a person from another city to physically present the documents in order to open an account or verify identity? That’s the reason, organisations are adopting digital ID verification solutions for remote customer onboarding. Undoubtedly, the institutions were already carrying out KYC processes but with technology advancing, AI-powered services offer incentives greater than ever. It enables the business to swiftly and securely onboard remote customers in a compliant way.

Digital services are a necessity, not a preference!

Analysing the significant incentives, majority of the businesses have already started digitising the onboarding and account opening process. Not only this, but enterprises have increased their budget for remote onboarding. It shows that the institutions have aspired to digitize and now they have a more pressing driver, i.e. ‘speed to market’ due to the pandemic. 

The organisations that want to stay ahead of competitors need to figure out the loopholes in the remote onboarding process of customers. The quicker they can accomplish this, the better they can perform in the digital world. 

Adoption of digital identity verification in  healthcare constitutes a significant share

Healthcare sector is one of the most targeted industry in the last decade. According to HIPPA Journal, over 2,550 healthcare data breaches were reported in the last decade; including 46 breaches in April 2019 alone. The records compromised in these breaches were exposed on the dark web including patient’s information, date of birth, credit card info etc. In fact, these records were worth 10 times more than ordinary credit card records.

Such incidents make digital identity verification a significant element to ensure patient security. Know Your Patient (KYP) through digital identity verification is essential for healthcare organizations. It verifies the patient through real-time document verification that compares the photo on the government-issued ID document to live photo of the patient. Also, with health insurance fraud on the rise, identity verification is needed more than ever.

KYP under GPhC’s guidelines

Adoption of KYP process in health care organizations is now mandatory. As per the guidelines of the General Pharmaceutical Council, online pharmacies are obliged to perform age verification before selling the medicines in the United Kingdom. Traditional age checks are not efficient enough to verify customer identity and age and therefore, digital identity verification is need of the hour.

Read more: Know your patient process explained under the GPhC’s guideline


Know your patient process explained [Under the GPhC’s guideline]

How to make sure that the patient qualifies for purchasing a restricted medicine? 
Someone requesting the results of a blood test online is who they claim to be?

Know Your Patient (KYP) is the process that helps verify the identity of patients. This article highlights how your business can carry out this process.

Towards the end, it mentions use cases that might apply to your healthcare business.


What is Know Your Patient (KYP)?

Ever wondered why doctors and other medical offices require patients to show identification?

The medical staff needs to know who they are treating, much like a bank performs ‘know your customer’ or the KYC process when someone applies for a loan or to open a new bank account.

There are several reasons why hospitals require credentials from patients. For example, to secure medical data, to prevent health insurance fraud, and to protect the patient’s identity. 

Digital identity verification in healthcare plays a crucial role.

The General Pharmaceutical Council (GPhC) of the UK issued Guidance for registered pharmacies providing pharmacy services at a distance, including on the internet, in April 2019.  

The summary of GPhC’s guide is that online medical stores need to verify the identity of patients before selling opiates, or medicines for diabetes, asthma, and epilepsy.

So how to ensure that the online order for a diabetes medicine is placed by someone having an authentic prescription from a qualified doctor?  

Online identity verification solutions can address this problem. 

Seemingly, KYP is a restriction for drug stores but it also benefits the healthcare providers regarding the protection of patient data.

We wrote in our previous post, Anti-Fraud Pill for Healthcare Industry, how data breaches have damaged the healthcare industry.

KYP protects both the patients and healthcare providers.

It is not only the patients that need to demonstrate credentials before buying, the ID verification for pharmaceutical businesses is also mandatory.

Identity theft is not only prevalent in the financial and eCommerce industry, but healthcare sectors are also its primary targets. Our article, Medical Identity Theft, elaborates on how this menace has penetrated the medical industry. 

And the result is that the requirements for ID verification for pharmaceuticals all over the world are getting stricter. 

Digital ID verification for pharmaceutical in the United Kingdom 

Pharmaceutical solutions keep extremely personal and sensitive data, which makes it crucial for their ID verification. On the dark web, a patient’s history or medical record holds more worth compared to someone’s credit card detail. 

This makes it imperative for pharmaceutical services to confirm patient identity before selling medicine listed by the health care regulators. 

It may seem like a burden on the hospital dispensaries to verify customers but digital solutions exist that verify patients in 15 seconds. Yes, not every solution provider gives the same quality.

However, healthcare providers need to get trusted IDs for real-time verification.

How to verify patient identity

Patient identifiers help with KYP process. With tools such as face- or document verification, pharmacies can record unique features and patients’ data. This ensures that the person is who they claim to be, and ascertains a legitimate request to obtain medicine or medical test results.

ID verification of patients also helps prevent fraud while preventing the misuse of stolen medical data.

ID verification for pharmacies

As mentioned earlier, pharmacists need to possess a proper license to operate and sell medicine. Consider it two-way traffic. An actual patient who walks up to a pharmacy that is not licensed can misuse a person’s data. The first step is perhaps patient age verification.

Verifying patient age can be similar to the age verification process extensively being used by online gaming or other age-sensitive sectors of different industries. 

Depending on the region, there are several ways verification of patients can help pharmacies meet compliance requirements.

Use Cases

KYP has several use cases that help protect the patient’s identity and assist healthcare businesses in ensuring that they are providing the medical test results to the rightful owner of that sensitive information.

Age verification for online prescriptions

How to know the age of a person standing in the drug store or ordering online? Under the latest guidelines, online pharmacies in the UK are required to perform age verification for anyone seeking prescription online.

Verifying their age with a government-issued identity document is one way to achieve that.

Preventing insurance fraud 

When a patient’s data is compromised, the identity thief can falsely claim insurance using the health insurance ID. The fraudster swindles the claimant, making it difficult for them to file a claim.

Ongoing KYP with biometric authentication

After the initial screening, pharmacies and clinics can accept/reject future requests for online purchases from a simple selfie. 

The process is simple; at the time of creating the account, a 3D face map of the person is created using facial recognition technology. 

So every time the user wants to request online purchases or medical test results, they can simply send their live selfie.

This selfie is matched with the 3D map of their face captured at the time of enrollment, authenticating patients with selfies.

Going forward, the regulations for medical facilities and pharmacies will become more challenging. There will be more scrutiny as the COVID-19 lockdown phase has highlighted how important online businesses are especially in the time of a crisis like that. 

Online pharmacies can simply ask the patient to verify ID online before entertaining their request.

Patient identification through KYP process is helpful for society at large. Medical health records stay safe and minors are prevented from ordering restricted medicine online. However, a user friendly Know Your Patient process can benefit healthcare businesses and the patients.

Implementation of AML compliance Challenges and fundamentals

Implementation of AML compliance – Challenges and fundamentals

With the advancement in security controls, financial businesses are becoming fraud and stress-free. However, every new thing comes at the cost of something and is not as easy to implement as it seems. The organisation heads invest time and money to efficiently replace their old processes. The stringent regulatory framework requires even more proficiency for implementation of stable anti-money laundering (AML) and counter-terrorist financing (CTF) compliance.

Information flow – the key challenge for implementation

It’s a known fact that businesses are always facing new challenges for the implementation of effective AML compliance. The significant challenge is to adequately obtain, maintain and transmit the relevant required information. Proper information flow is crucial and a prerequisite to executing AML/CFT laws and regulations. To ensure enforcement of law and prevent any possible violations, law enforcement authorities require proper information.


Since 1970, the government’s approach towards information for enforcement of laws has been disrupted due to interconnected technological developments and upgraded processes. The technological developments have resulted in the globalisation of economic activity and financial crimes. Not to forget that cross-border funds movement is intensely increasing, both in terms of volume and speed. Moreover, certain factors are fueling economic crimes to reach higher levels of magnitude crossing the national borders. This involves both global activities and processes.

Globalization of economic activities

The arising challenges for law enforcement authorities are because the law enforcement strategies were present only at the domestic level. When the activities and crimes crossed borders, the strategies worsened. The difference in the legal systems raised problems for the authorities since the foreign jurisdictions were applied to the procedures to safeguard their sovereignty. 


The difference in legal and regulatory systems also induced another challenge for the authorities that was the discrepancy in the gathered information. The information-gathering processes varied from country to country, therefore law enforcement agencies couldn’t guarantee if reconstructing the money trail would be possible after going through foreign jurisdictions. 

Cross-border movement of funds

With globalisation and intense cross-border fund flows, criminals excessively started using trading channels to circulate their assets and reinvest them without getting detected. It became crucial for law enforcement authorities to acquire financial and transaction information. The traditional processes weren’t efficient to meet the requirements of law enforcement authorities.


Apparently, the traditional methods were slow and required an evidentiary threshold which wasn’t needed at an early stage of the detection process. Apart from limitations to access the information, some of the information that authorities needed to reconstruct the money trail wasn’t even gathered by the financial institution and businesses. For instance, banks and other financial institutions didn’t always maintain records of verified customer data related to wire transfers. 

AML/CFT standard for effective information flow

To address the challenges identified, AML/CFT standards were introduced. The 40 recommendations of FATF presents a comprehensive set of instructions. These recommendations can address the challenges regarding inefficient information flow that law enforcement authorities face in tracing the financial crime.


AML/CFT standard systems facilitate law enforcement agencies to achieve multiple objectives that include:

  • Financial crime detection by pursuing money trail
  • Removal of profit out of crime through expropriation
  • Identification of professional or third-party money laundered who provide services and platforms to criminals to launder money without getting detected
  • Targeting the heads of a criminal organization (such as terrorist financing, drug trafficking) that are not under the limelight
  • Most importantly, protecting the integrity of the financial system and making it crime-free.

3 major interventions of AML/CFT standard

To successfully achieve these objectives, the international AML/CFT standards focus on three major interventions that the countries must adopt, these include:

  1. Imposing the obligations on the key players of the business world that deal with transactions; it includes, banks, financial institutions, real estates, casinos, etc. These institutions are mandated to gather and verify certain pieces of information about the transactions being processed.
  2. AML/CFT standards obligate the above-mentioned institutions to keep a record of the gathered information for a specific period. Also, these record, when retrieved by the authorities, must be in a timely fashion.
  3. Creation of a legal environment to enable the secure sharing of information between various parties with the purpose to fight against financial crime. This category address the challenge of information flow.


Fundamentals of AML Compliance

The world is changing and regulations are becoming more stringent. AML compliance is a term every business is familiar with. But just knowing it isn’t enough, instead of relying on the definition only, the fundamentals must be taken into consideration for an efficient AML compliance.  Here are some key functions that every financial business must-have:.

Know your customer (KYC) system

Customers are the assets of any organisation, therefore, their risk assessment must be conducted before onboarding them. Not, just at the time of on-boarding but businesses need to re-evaluate whenever there’s some update in the information or any new possible risk. Henceforth, KYC program is vital for any business to successfully comply with AML/CFT regulations. With the KYC process in place, there are several questions that institutions can cover, including;

  • Who is the person? Is the provided information correct?
  • Is it safe to onboard him/her?
  • What type of activities do they want to perform in future? etc.


Through customer identification program and customer due diligence, not only the identity of the customer can be verified but the risk associated with an individual can be identified before onboarding.

Comprehensive Policies and Acceptance

Written policies and procedures are important that cover the full spectrum of AML compliance guides. As financial institutes need a solid proof for each of the components of AML so these have to be easily accessible to everyone including relationship managers, branch managers and other financial salespersons. Because of competing demand and lack of commitment many businesses suffer a lot.

The Board of directors and CEO commitment to the policies means real hands-on dedication to ensure that every person takes compliance seriously and views it as part of their duties instead of relying on the compliance department only. 

A designated AML compliance officer 

Supervision of any work is requisite in every organisation. When it comes to efficient AML compliance, a compliance officer must be there to monitor all the AML processes. A designated compliance officer should have adequate knowledge and resources available to support the financial institution’s compliance program readily. By this, it means that company CCO does not only need personnel but also needs a real investment in technology to implement AML for organizing financial information, customer data, and filtering transactions.

Ongoing Monitoring and Testing

Financial institutions need to become more flexible for monitoring and auditing of their compliance program. An AML program provides many metrics to measure the compliance program by generating lots of data. With every passing day, the trend is changing and the processes must be timely updated to meet regulatory needs. Independent evaluations and testing should be conducted and reported to senior management annually.

identity verification

Identity Verification entails a lot more than customer verification

Identity theft and digital fraud are on the rise. Cybersecurity is of essence for all the organisations and digital businesses dealing with consumer data. With the increasing number of high-profile data breaches, and online frauds affecting millions of consumers, online identity verification of stakeholders has set off as a significant requirement for businesses of every size.

While the COVID-19 pandemic has transformed major business operations introducing remote processes, establishing trust among consumers and organizations is now inevitable. Be it a customer onboarding or business partnership, identity verification is vital for almost every operation. 

“According to VMware Carbon Black report, there’s an increase of 238% in cyberattacks from February to April 2020”

The future of identity verification

The term verification has been used for ages, that refers to the checks or proofs about existence, correctness and truth of something. Talking about identity verification, it generally indicates a process for validating a person’s identity by confirming the personally identifiable information against real human claiming that identity. 

Given the pace at which markets are shifting towards the digital sphere, identity verification is the need of the hour to secure business and to provide consumers with a seamless customer experience. From in-person identity verification to online customer authentication through AI-powered SaaS products, the ID verification market has evolved already. Looking into the crystal ball, it’s safe to say that identity verification holds a bright future in the business industry.

identity verification

Identity Verification – Going beyond customer verification

Identity verification is a lot more than “show your ID card to enter the club” or “ present your driving license to officer to prove your age”. The AI-powered ID verification goes beyond customer verification and the advancements in technology are enhancing the scope and evolution of the industry. Identity verification is a powerful tool to perform simple consumer verification to complex corporate screenings and remote biometric authentication, read below to explore more about these advancements. 

Know your customer through digital ID verification

Over the past few decades, the concept of know your customer or KYC has gained traction in the financial world. Considering the rapid increase in the digital and financial frauds, regulators have made it mandatory for every organization, dealing with money, to comply with KYC regulations. ID verification and customer due diligence are the minimum compliance obligations of reporting entities. 

Identity verification is an inherent part of the KYC process that enables businesses to securely onboard new customers and to authenticate existing ones in real-time. The best approach to fulfilling these compliance requirements is to choose multi-factor authentication or multi-layered authentication by using a combination of various ID verification services (such as document verification, address verification, and biometric authentication) for customer verification. Multi-layered verification approach provides a quick, convenient, and frictionless customer experience with minimum error rate. 

Read more: Instant Client Onboarding with E-KYC Screening

KYB – Protect yourself from shell companies 

Living in the digital era, identity verification isn’t just applicable to humans. Individuals aren’t the only ones posing threat towards an enterprise; corporate entities (partners, corporate consumers, affiliates, etc.) can be equally threatening and that’s the base of the concept of Know Your Business (KYB).

Identity verification for businesses to detect shell and swindling companies and saves organisations from falling into the trap of fraudsters and enables them to stamp out aggressors. Moreover, with EU rolling out stringent regulations for customer due diligence and FINCEN’s requirement for companies to be aware of Ultimate Beneficial Owners (UBOs) before commencing a relationship, business verification is a pressing priority. 

Minor protection through age verification

With digitization and technological advancements, access to the internet has never been this easy for children as it is now. This ease of access has pushed children into the pit of darknet and as a result, not just the children but their parents and associated businesses are suffering as well. Identity verification plays a vital role in facilitating businesses to comply with age verification laws through real-time online age verification.

Unlike the traditional age gates, AI-based age verification solution incorporating document and face verification service efficiently authenticates the age of the individuals before allowing them access to age-restricted products and services. Because of sophisticated technology, the age verification process is instant and provides highly accurate results to ensure that buyers of age are not shunned away due to false positives or time consuming verification processes. 

Fraud detection and prevention

Digital frauds including identity theft, account takeover, Card-Not-Present (CNP) and chargebacks frauds, all have one thing in common, i.e. unauthorized access to credentials. Fraudsters get past the verification gateway due to lacking or inefficient authentication checks. Binary checks (username and passwords) are not enough to identify imposters. AI-powered identity verification serves as a productive tool to mitigate these frauds. 

Various ID verification services ensures that only authorized users are accessing the services or applications. Through a liveness detection feature, businesses can ensure that a real accredited user is present on the other end at the time of verification. Moreover, the intelligent verification solution detects any spoof attacks that con artists may use to bypass authentication checks. All this is done within seconds, hence, identifying identity thieves in real-time.

Age verification

Digital Age Verification replacing Age Gates for better compliance

Age verification is one of the trending snd sensitive topics these days, especially in the business industry. With the technology advancing every passing day and availability of the internet and smart devices at almost every home is alarming for minors. According to a survey, 53% of the children in the US own smartphones by the age of 11 and 84% of teenagers having phones. 

Online Age Verification

The significant ratio of minors immersing themselves in advanced technological experience raises a critical challenge for businesses to incorporate adequate age checks for minor protection. The demand for secure age verification had spiked significantly in the past few years when organisations started shifting their operation online. With this paradigm shift, multiple incidents have been reported in the past, highlighting minors access to age-restricted products, services and content. 


One such accident took place a few years ago when a 16-year-old boy brutally stabbed schoolboy with the knife that he bought online from Amazon, taking his life. Taking into account such incidents, regulators are becoming stringent in preventing children online from accessing age-restricted products and sites. They are continuously finding new ways to deal with organisations failing to protect minors online.

Age verification regulations demanding better compliance

According to the CDC report, alcohol is the key factor behind the death of people under age 21. 

Governments in different countries are coming with age verification laws to protect children.

The U.S has passed the law for selling age-restricted products and services. The President approved the legislation revising the Federal Food, Drug, and Cosmetic Act on December 20, 2019. It raised the minimum age from 18 to 21 years for the sale of tobacco products. According to Nicotine Vapour Products (NVP) Law of Scotland, it is prohibited to sell or use nicotine vapour products and tobacco under the age of 18. Moreover, it mandates businesses to check identity cards of the buyers who seem younger than 25.

Read more: Age verification laws and regulations for better compliance.

Age Gates – A Thing of Past

Concerning age verification laws organisations are implementing age gates on their website to prevent minors from accessing adult content or age-restricted goods. But are they efficient enough to restrict underage users from proceeding further? No, they are not anymore. The reason is age gates rely on the honesty of the user to enter their date of birth or check a box to verify their age. You never know if the users are honest or not since nothing more is there to authenticate the information provided by them.

age gate

Prove your Age Online with Shufti Pro’s Age Verification Service

As per statistics, businesses can’t rely on the simple age checks. These days online businesses are trying to cope with “how to create age requirements on the website with credit card verification”. The answer is simple to implement sophisticated age checker that ensures not only the age but the identity of the individual as well to comply with age verification and KYC & AML Regulations.


Shufti Pro offers an AI-powered age verification solution for businesses to verify the age of the user through government-issued identity documents – an ID card, driving license, and passport. All user have to do is enter the date of birth and display their ID card in front of a webcam or mobile camera to get their age verified. Shufti Pro’s advanced solution automatically extracts the data from the ID document through OCR extraction and authenticates the fetched information and face of the user. This service can verify age within seconds, ensuring seamless customer experience.


Deutsche Bank’s Epstein Fine – Lesson for Financial Institution

High-risk clients pose a serious threat to banks. Over the past few years, a significant number of money laundering cases have been witnessed globally, resulting in hefty fines. Consequently, KYC and AML regulations are becoming more stringent across the globe. And having criminals as your clients can cost you a fortune. 

One such incident took place last month when Deutsche Bank was fined for financial dealings with a notorious sex offender, Jeffery Epstein, and involvement with two banks having a bad reputation for large-scale money laundering scandals. 

Deutsche Bank fined $150 million

In July 2020, the New York State Department of Financial Services (DFS) imposed a monetary penalty on Deutsche Bank for its failure to identify and mitigate the financial crime risks posed by Epstein. Moreover, DFS penalised the bank for its relationship with foreign bank clients, i.e. Danske Bank and Federal Bank of the Middle East (FBME). Not to forget that Danske Bank was behind the world’s most massive money-laundering scandal, and the Financial Crimes Enforcement Network (“FinCEN”) punished it for it. 

Due to Danske Bank’s involvement in one of the most massive money-laundering scandal in history, it holds OCCRP’s 2018 corrupt actor of the year award. Even after being labeled as the high-risked client with the highest possible risk rating from Deutsche Bank, billion-dollar suspicious transactions circulated through its New York branch, resulting in an extensive compliance violation.

Regarding the bank’s relationship with Epstein, Linda A. Lacewell – Superintendent of Financial Services – held Deutsche Bank responsible, stating that the bank has “inexcusably failed to detect or prevent millions of dollars of suspicious transactions” despite knowing Epstein’s criminal history. 

So what exactly went wrong?

The detailed report from DFS highlighted how Deutsche Bank continued their relationship despite knowing the criminal history of Epstein. 

Relationship Onboarding and Suspicious Transaction

Deutsche Bank onboarded Epstein and his related entities in August 2013 and this relationship continued till December 2018. It terminated because of negative media coverage of Epstein’s criminal activities. The relationship manager – who had previously overseen Epstein’s accounts in another institution – suggested the upper management that financial dealings with Epstein could be profitable for the institution.

To comply with KYC and AML regulations, Deutsche bank conducted due diligence before onboarding and registered Epstein’s criminal conviction. However, the Reputational Risk Committee (RRC) of a bank in the US didn’t present any possible reputation risk professed by this relationship with Epstein. 

Ultimately, the bank held over 40 Epstein linked accounts. The biggest mistake was the approval of initial onboarding by the compliance officer based on an email sent by a senior manager. Hence, he failed to discuss the matter with any of his senior colleagues before approving.

Due to his connections to senior politicians, Espetian was deemed a ‘high-risk client’ and ‘Honorary PEP.’ Therefore, his accounts were subjected to enhanced due diligence and transaction monitoring. However, no such surveillance took place. From 2013 to 2017, the Epstein’s lawyer withdrew $800,000 in cash. Though Deutsche bank did meet their legal obligations by submitting the cash reports, and authorities readily accepted the explanation that withdrawals were for travel, tipping, and household expenses.

Ignoring ‘Red Flags’

In April 2016, the new relationship manager reviewed Epstein accounts. Although he was aware of RRC endorsement of Epstein’s relationship, he was unaware of the three conditions that RRC put in January 2015 for the continuation of a relationship. There sprawled a communication gap that Epstein’s relationship committee wasn’t given any guidance on RRC conditions, and the accounts continued operating the same way as before, despite multiple red flags.

Lessons for other Financial Institutions

Following a media report on Epstein’s criminal activities, Deutsche Bank terminated their relationship with Epstein. This case is a lesson for other institutions to revise their KYC and due diligence strategies and monitoring of high-risk clients. 

Proper KYC Checks and Due Diligence

Every financial institution is obliged to comply with KYC regulations and incorporate KYC checks in their onboarding process. These checks need to be efficiently performed while ensuring that the client is who they claim to be. Besides, customer due diligence must be carried out prior to onboarding to rate the risk. When an institution decides to onboard a high-risk client, conducting Enhanced Due Diligence (EDD) becomes mandatory. Failure to do so can result in legal action.

AML Screening and Transaction Monitoring

People having ties with criminal groups and politicians are called ‘High-risk PEPs’ that require ongoing AML screening. Even FATF requires financial institutions to incorporate proper AML checks for PEPs to prevent money laundering and detect any misuse.

Apart from AML screening, transaction monitoring is essential to identifying suspicious cash flow. Know Your Transaction (KYT) solution is an exemplary model to facilitate financial institutions for transaction analysis. It monitors transactions to find fraudulent activities such as money laundering and terrorist financing. In the case of Deutsche Bank, there wasn’t a proper process to monitor payments, and even in case of an alert, they didn’t address it adequately.

digital identity

The Role of Digital Identity in Business-Customer Relationship

Dealing with any business online have you ever wondered where this relationship would go? We all do. Even the modern-day enterprises possessing digital presence are quite familiar with the importance of a business-customer relationship. And with this relationship, there comes a series of challenges to retain healthy relation. The first step towards achieving a long-term business-customer relationship is to question.

How do you ensure that your customers are content with your services, and they have a secure and seamless experience to continue using your product and services? Do they feel confident enough in letting you handle their data? How are you going to manage a customer journey from frictionless onboarding till customer support? How will you personalise customer experience without compromising security?

These are a few essential questions that play a crucial role in enhancing customer experience and building an ongoing healthy relationship. All these questions point towards one thing, i.e. the importance of digital identities for customer retention. Let’s dive deeper into the role of digital ID in customer experience life-cycle and business-customer relationship.

First and the foremost ‘User Experience.’

User experience has a direct link to business success and customer retention. Therefore, providing a service that is better than the current one is a must. Always remember that your customers have multiple options to choose and if their experience is not up to the mark then they’ll surely switch to some other business. A report states that 79% of the users leave in between onboarding process due to bad experience.

Exceptional customer experience is no longer a plus point; it’s a necessity for businesses, more like a critical differentiator between an organisation and its competitors. Customer and identity access management (CIAM) is the primary factor for excellent customer experience and relationships. For any business getting everything right in the customer journey is the ultimate goal for it involves various stages and interactions. 

The best customer and identity access management solutions – Digital Identity Verification solutions – enable the businesses to know who their customers are while ensuring the streamlined process, security, scalability, magnificent user experience and regulatory compliance. 

Data Security is directly proportional to customer experience

Living in the digital era, securing digital identity is a significant concern of customers. With data breaches gaining publicity, the brand image and business reputation are at stake. Both of these points are necessary to retain customers. The stats show a 33.3% increase in data breaches in 2019 as compared to 2018. And this trend is even expected to grow more in 2020.

The business-customer relationship is all about striking the right balance between security and customer experience. Therefore, digital identity is as important as the ability to verify digital identities because the efficient ID verification is essential to curb online frauds including identity theft, financial scams, and money laundering while complying with KYC and AML regulations.

Stages of Customer Identity Life Cycle and Identity Verification

Customers are the backbone of any organisation, and if you think your work is done by onboarding them, then you are mistaken; the real struggle starts afterwards. Customer digital identity journey is a combination of different stages, and each step raises equally essential questions and holds a significant value. The common point among all these stages is ‘Knowing the customer’s identity’.


Traditionally, identity verification was only considered during customer onboarding but now moving forward as the business operations have transformed digitally, the demand for identity lifecycle has spiked. Presently, digital identity verification feeds into both security and customer experience throughout the customer journey. Shufti Pro’s KYC verification solutions efficiently cover all the stages of customer identity lifecycle and facilitate organisations in building sustained business-customer relationships.

1. Customer Onboarding

“What processes are businesses going to follow to bring customers online?” is the most important question that customers ponder upon. Modern-day customers expect frictionless onboarding process and exceptional customer experience. Manual form fillings and registration are out of date, time-consuming and quite cumbersome. 

Shufti Pro’s AI-powered Identity solution is more convenient and secure, focusing on two elements, i.e. Government-issued ID document and a face of a customer that are unique for every individual. Moreover, the OCR technology eliminates the need for manually form filling; hence, empowering customers to enjoy seamless onboarding within seconds. 

2. Customer Verification

“Are your customers who they say they are?” is crucial for businesses to confirm the identity of their customers to comply with KYC regulations and avoid any unfavourable circumstances in future. With online document verification, security can be achieved within seconds. 

Shufti Pro’s intelligent verification solution compares the ID document of the customer with their live selfie in real-time. This solution ensures that the customers are who they are claiming to be. With the video proof of the entire verification process, the business can have evidence to avoid any KYC violation. Also, this verification lays a foundation of customer’s real identity throughout their identity lifecycle.

3. Customer Authentication

Once you have onboarded a customer, how will you ensure that every time only the authorised person is accessing your product or service, not some imposter? Simple login and passwords are not reliable, and con-artists can easily hack them. Face verification can authenticate the customers before allowing them access. It’s as easy as taking a selfie and ensures an exceptional level of security.

The liveness detection and 3D-depth analysis feature ensures that the authorised user is remotely present at the time of authentication. Henceforth, it curbs any type of facial spoof attacks. Also, there’s no need to rely on higher-friction solutions as call verification or KBA; just upload a quick selfie, and it’s done.

4. Customer Authentication

Your customers aren’t going to stay with you forever. Some are going to de-register within a month while some may take years. So, what’s going to happen to their data? Will it be immediately deleted or stay forever? Shufti Pro’s is GDPR compliant identity verification solution and hence, provides the customer with their right to demand the deletion of data. This way, a customer unsubscribes the service in good terms without worrying about the privacy of their data.

Summing up, a seamless identity verification solution throughout the customer journey facilitates businesses in establishing a healthy customer relationship. Even when the customer opts to unsubscribe, it ends on a good note.

digital identity verification

ID Verification for High-Potential Digital Fraud Cases

Instances of digital frauds and payment scams are highly damaging for banks and financial institutions. Not only first-party fraud which includes an individual or group of people that provide false identity information to become part of a legitimate system but also third-party fraud such as data obtained from data breaches used to make online user accounts. 

A banking industry exposed over 13 billion records containing user and organizational data that has been stolen or lost since 2013. Financial institutions (FIs) all over the world are striving hard to mitigate high-risk criminal activities. It is estimated that by 2020, the U.S. will be spending USD 599 million to combat loss by account application fraud. In the bank account application fraud, fraudsters use synthetic ID documents and stolen Personally Identifiable Information (PII) to open a bank account.

Fraud Prevention Strategy

The most successful fraud prevention mechanism is ID verification. In the digital environment, the chances of criminal activities and fraudulent attempts are high. Banks and financial institutions are under the regulatory obligations of verifying each onboarding identity to curb the high potential financial crimes such as money laundering and funding of terrorist activities.

mobile fraud stats

Chargeback fraud

Among all chargeback frauds, 86% are of friendly fraud which is increasing at a rate of 41%. All totaled digital frauds cost online retailers an average of 1.47% of their overall revenue. In chargeback fraud, a user calls his banks or credit card company to request a chargeback over some product which he has not ordered. The online merchant would have to transfer the money without even suspecting the fraud. As a result, the fraudster who made the purchase gets money as well.

Unprotected bank transfers

The digital payment services are under the threat of suspicious transactions. Unauthorized access over user accounts can be responsible for transferring funds to some suspicious destination. Money laundering and illicit funds transfer activities are performed through digital channels.

Mobile fraud

Mobile fraud is the leading fraud today in which fraudsters are able to access the confidential data and impersonate as if a legitimate customer is making a request. ID verification for customers helps mitigate the risks of fraud that occur through mobile devices. There are some common mobile frauds that are increasing rapidly with the penetration of the Internet and mobile devices. With varying but almost similar occurrence percentages, these mobile frauds are becoming part of daily mobile users. However, the need is to combat the crimes by ensuring a strict ID verification.

mobile fraud techniques

Identity Verification – Do’s and Don’ts for Compliance

Digital identity verification is the only solution that aligns well as per the regulatory requirements of ensuring KYC compliance. Also, to fight back against the high-scale financial crimes and digital frauds, digital identity verification is the most praised solution by business entities.

identity verification rates

ID verification involves various methods of verifying the identity of customers in which document verification is the one most adopted by businesses. In digital document verification, a user’s government-issued ID card is scanned to ensure that it has not been digitally manipulated or involved in some criminal activity. ID verification provides a strong trust for online businesses. It is crucial to assure that the online user who is holding the ID is actually the one who they say they are.

The different digital fraud cases can be solved with mere identity verification that verifies each onboarding identity. ID verification involves an ID scan with a selfie to verify the identity of individuals. In this way, it serves many benefits to businesses that seek to build trust in their digital channels, get higher levels of assurance, and meet KYC/AML compliance obligations.

Common documents for verification purposes

The following are some common documents that can be used for ID verification purposes:

  • Household utility bills such as water, gas, electricity, TV, and landline, etc.
  • Lease or rent agreement
  • Bank account statements
  • Official photographic ID

Less common documents

Some documents are not commonly used for verification purposes because they are not considered as much authentic when it comes to verifying the identity of an individual. 

  • Mortgage statement
  • Housing insurance documents
  • Voter registration certificate
  • Municipal tax statement

Non-acceptable documents

For ID verification, some documents cannot be accepted when it comes to compliance requirements. These include;

  • Envelopes and postcards
  • Internet and mobile phone bills
  • Invoices for privately rendered services
  • Self-completed applications
  • Informal letters
  • Tax-related documents

For ID verification, generally, PII is verified which must feature the full name and address of an individual. The following are some other requirements:

  • The name and address should be clearly visible in the document.
  • It must be recent
  • There should be a residential address given
  • It must be issued by an official authority

ID verification services also maintain a balance between mitigating fraud and customer experience. The AI-powered ID verification provides an optimized customer experience that leaves no stone unturned when it comes to secure business, regulatory compliance, or a smooth onboarding process for end-users.

intelligent character recognition software one step ahead of ocr

Intelligent Character Recognition (ICR) Software – One step ahead of OCR

Intelligent Character Recognition Software captures handwriting from image files. It is an advanced version of OCR technology in which printed characters are captured. ICR is in the transformation phase as technology keeps improving to give better accuracy and recognition rates. The changes and adjustments in this field are constant which incorporates possibilities with time to make technology more reliable. 

In fact, when compared to OCR, we can say that the results of ICR still lack correctness. The reason is that currently available ICR software is constantly learning neural networks developed by Artificial Intelligence. The more the data will be available, the better the ICR software would be able to learn and process the handwritten documents. Any exception can result in wrong data interpretation. 

icr and ocr

Intelligent Character Recognition can interpret an array of new handwriting styles and fonts by developing an AI-based neural network model through which the system ensures self-learning with each new document style and font. It means that whenever a new type of document is learned by the model, the ICR software upgrades its database which ultimately helps the software predict the handwriting effectively with high accuracy. With every new data to the Artificial Neural Network (ANN) model, the new, as well as previous data, is used to predict the handwriting, fonts, and styles, etc.

Intelligent Word Recognition, however, does not replace OCR and ICR systems as it is optimized technology to process real-world documents that are not well-written and have free form. The documents in which it is hard to recognize the data fields can not be identified with ICR. Instead, to do the data entry operations, IWR technology automates it and recognizes the text in a detailed manner. 

How does ICR work? 

ICR software is integrated into a system that takes in an input of a handwritten document. It scans the information from it and extracts the data from the documents. Let’s understand the working of ICR technology in the digital document verification use-case of a bank.

  1. The end-user will display their ID in front of the camera. ICR software will scan the document and extract the information from the ID (Name, DoB, etc)
  2. The user could be asked to upload a hand-written consent as well (as per the system’s instructions). The consent text will be scanned and extracted.
  3. Both the extracted information will be verified and data, as well as results, will be sent to the bank.

Automated data extraction process eliminates the overhead of time-consuming and ineffective data entry processes by businesses. Not only time, but it saves the cost to hire employees for the job of data entry. The extracted data can further be used in an automated data flow system that can help businesses ensure predictive modeling over large datasets to make the system more efficient and optimized.

icr improves day to day

Application of Intelligent Character Recognition Software 

ICR software was invented by Joseph Corcoran in 1993 for the purpose of automated forms processing. This process involved three stages in which the document image was captured and processed by the software, then the information was extracted using the ICR engine and in the final stage, results were processed to validate that output automatically.

With time, this invention proved to be fruitful for a variety of real-world business applications. Today, modern business software use ICR technology for automated form filling. Before ICR, the identification of unstructured data was a complex process. However, now innovative technologies have the capability to automate the data extraction process no matter if it is structured, unstructured, or cursive handwriting. ICR software has the following applications at an industrial level:

  • Intelligent Character Recognition systems are adopted by Robotic Process Automation (RPA) worldwide. 
  • To optimize workplace operations, ICR is used in the applications of Optical Mark Recognition (OMR).
  • ICR software is used for achieving the data in an electronic environment. 
  • Electronic document verification to verify the identity of individuals online. This application is mostly used in banks and financial institutes.
  • Verification of handwritten consent in a digital environment. 
  • ICR software is used to automate the manual data entry process at an industrial level.
Protect Business and Remote Staff from Cybercriminals Shufitpro

7 Ways to Protect Business and Remote Staff from Cybercriminals

Businesses are facing ‘new normal’ as the workplace has shifted from offices to homes amid coronavirus pandemic. This has made many businesses keep running but added vulnerability too as the company’s data is being accessed from different servers and locations. Remote work is a trend that is being widely adopted in this pandemic to keep businesses operating but companies need to take steps to safeguard their data and team members against cybercriminals taking advantage of the current situation. In this blog, we’ll discuss some preventive measures that businesses need to take to prevent cyberattacks during coronavirus pandemic. 


Cybersecurity Tips for Companies and Remote Workers Amid Covid-19 Lockdown

Businesses need to go on, work has to be done, so effective security measures have to be observed for businesses implementing WFH policy. Due to the current crisis, employees are pushed to work from their homes and get their work done effectively in inconducive environments and protect company data from unauthorized access. Cybercriminals are smart and will not let a good crisis go to waste. They will do whatever they can to exploit data and hardware device security vulnerabilities that can arise due to remote workers. 


Here are some ways businesses can protect cyberattacks while implementing remote work policy:

Check for Security Vulnerability

To detect vulnerabilities and offer solutions, ethical or white-hat hacking is the act of legal penetration testing done by a cybersecurity expert on organizations’ information systems. Relevant solutions are suggested based on that hacking for enhanced cybersecurity. Ethical hackers must be hired to check for potential security threats. Moreover, this gives companies a better sense of understanding their security vulnerabilities so that they can implement more robust defense measures to prevent data breaches.

Protection for Malware/Ransomware

Malware is malicious software that allows the cyber attackers to gain control of the desired computer or system. Ransomware is a type of malware in which the attacker demands a ransom to give control of the computer or system back to the victim who is the rightful owner. If the victim fails to pay the ransom, the hackers release small amounts of data to force the victims to pay. Remote employees can protect themselves against such attacks in the following ways:

  • Always inform the company’s security experts when moving or using a different computer than the one provided to them. 
  • Avoid using open public Wi-Fis.
  • Do not open suspicious emails or attachments.
  • Always update all software and use reputable antivirus software or firewalls.

Online Security

Use of VPNs

A virtual private network (VPN) allows organizations to safely connect to a computer when they are using a less secure network. Using a VPN offers privacy and protection for company’s data from being accessed by unauthorized sources.

Cloud Storage

Companies should use cloud-based services authorized by security experts to store data and encourage their remote workers to do so. In case the computer malfunctions or is stolen, this will protect any kind of data loss.

Deploy Identity Verification Solutions

Identity verification solutions assist businesses to comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. To mitigate the risk of scams while working remotely these solutions play a vital role. Knowing who you are dealing with is an uphill task but it is very crucial especially when you are operating online. Moreover, as the staff is working from their homes how can the businesses be a step ahead to properly secure the company from fake identities? Digital ID verification solutions provide contactless technology to conveniently carry out cumbersome procedures of KYC, KYB, and AML. This technology provides a remote solution by authenticating identities and other businesses in real-time using document verification and biometric technology. Knowing your employees remotely through biometric identification service can harden your WFH process. 

With a face verification solution using a 3D liveness detection feature, you can always authenticate an employee working from afar.

Read More: Working from Home Spikes Demand for Digital Identity Verification

Educate Employees about CyberSecurity

Businesses must give awareness to their employees about the basics of cybersecurity such as phishing emails, ransomware, malware, antivirus software, avoiding using public Wi-Fi, etc. There should be an emergency response team that remote workers should contact when something suspicious takes place. As it is said that a stitch in time saves nine.

Software Updates & Strong Passwords

Remote workers must update their software to the latest version in line or the security team should set your system to update automatically when there is a new version available. This will save businesses from falling in the pit of scammers. Moreover, strong passwords must be used by remote workers to minimize the chances of being hacked. There are many online password generators that individuals can turn to create strong passwords using upper case and lower case letters, numbers, and symbols. To reduce the probability of being hacked through brute-force attacks the passwords need to be changed periodically.

In addition, 2-factor authentication is strongly recommended to avoid unauthorized access in case if the hacker has got your credentials.

In a Nutshell

These are unprecedented times in which both businesses and the government are still navigating their way around this Covid-19 pandemic. It is through these tough times that cybercriminals will exploit those businesses who drop the guard. It is the duty of both businesses and employees to protect private data from falling in the wrong hands. 

Sim swap fraud shuftipro

Sim Swap Fraud: A new battle in the war of your Identity

  In our connected world, we are using mobile devices for communication, work, banking, and entertainment. Phones help us manage the private files in our cloud storage accounts and organize our lives. By these devices, we manage our social media accounts. In short, our mobile devices hold every detail of our personal information. No matter the distance, the small chip in our devices known as SIM cards allow us to stay in touch with family and friends. But what if we lose our SIM cards? What if someone else hacked our SIMs? These are one of the many questions that are faced by SIM swap attack victims. 


In this article, we’ll cover all the insights of a SIM swap fraud and we’ll discuss how to protect yourself from this type of scam.

What is SIM Swapping Scam?

SIM swapping or SIM jacking is a type of ATO (account takeover) fraud in which a malicious fraudster uses various techniques such as social engineering by which they transfer victim’s phone numbers to their own SIM card. The hackers can reset passwords or receive 2-Factor Authentication codes that can gain all the accounts which are linked to that SIM number. This type of attack can give fraudster access to everything your number is linked to which may include your social media accounts, email, and bank accounts.  

How does it work?

A SIM swap scam occurs when scammers take advantage of a weakness in two-factor authentication and verification or exploit the system. So having control over your SIM would be valuable to fraudsters as he can have access to all of your personal data. Scammers start by gathering as personal information and engaging in a bit of social engineering to get hold of your number. The scammers call your mobile carrier, impersonating claiming that they have lost or damaged their (your) SIM card. They can then get a new SIM card activated in their possession with your number. So the fraudster is using a different SIM card with your number in his device.  Fraudsters can then access your phone communications with banks and other organizations by using your data. They can change the passwords by receiving reset links and codes on their phone. And that’s it: They’re in. They can even create a new bank account with your name and carry their malicious activities like money laundering and terrorist financing under your name.

SIM Swap Hackers Targeting Crypto Investors- Some Examples:

On June 11, it came to light that California resident Richard Yuan Li had been charged to commit SIM swap attacks that targeted at least 20 individuals. With his elaborate money swindling scheme, he exhorted 100 Bitcoin (BTC) in exchange for keeping private and sensitive information of individuals from being released online.

There has been a dramatic spike in SIM swap attacks in the past few years. A crypto investor  Michael Terpin fell victim to a $23.8 million SIM swap attack.

 Similarly, investor Seth Shapiro filed a lawsuit against American telecom giant AT&T as one of their employees had masterminded a nefarious SIM swap scheme that resulted in him losing $1.8 million in various crypto assets.

Sign to Know you are a victim of SIM swap fraud:

It can be a challenge to stay a step ahead of SIM swap scams. But there are always some warning signs so you can put a halt to fraudsters’ access as soon as you know those signs. Here are some of those signs:

  • One warning sign, which is very common, is social media activity that isn’t yours. Any social status upload or tweet which you have not done alerts you to the breach.
  • The other big sign is when your phone calls and texts aren’t going through. This may happen when the scammer deactivates your SIM and uses your phone number so you are unable to make calls or texts. 
  • If you get a notification that your SIM card has been activated on another device you’ll know you are a victim. So never ignore your notifications!
  • If you lose access to your accounts and your login credentials no longer work, it’s most likely that they have been taken over through your number. In such a case, without losing a minute, contact your bank or other organization immediately. 
limit chances of sim

SIM swapping due to poor ID verification process?

SIM swapping has become a significant threat for users as a large number of users are having their lifetime savings and invaluable data stolen from under their eyes. This is happening solely because mobile operators are seemingly failing to take reasonable steps to prevent these criminal hackers. They need to have proper identity verification checks so that they can restrain fraudsters from gaining access to anyone’s SIM. 

SIM-swap-related incidents have increased sharply over the past few years because the telecommunication industry lacks identity verification checks and make customers vulnerable to a variety of different hack attempts.

Read Also: KYC for customer on-boarding in Telecommunications Industry

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