Read More about fast-id page

Shufti globally launches webinr-icon - a new kind of identity solution!

Shufti globally launches - a new kind of identity solution!

Read more

Investor Onboarding | Navigating the Challenges of Digitization

n-img-inves-onboard

Private market companies are setting their sights on retail investors and exploring technology and innovative funding structures to overcome the sector’s barriers. Such retail investors are turning to private markets for diversified risk, enhanced returns, and lower volatility. With the high stakes, the private equity assets market is anticipated to grow by 10.2% yearly, while venture capital investments are positioned to surpass $659 billion by the end of 2027 compared to $531 billion as of 2022. 

However, today’s investors expect a digital onboarding experience from wealth managers that parallel standards seen across all other major online marketplaces. To meet this growing demand, wealth managers are going digital while offering several financial services, such as managing investor wealth, finding opportunities to create more wealth, and revisiting investment plans after periodic intervals. Forrester, the research agency, investigated wealth managers and found some interesting outcomes from the shift to digital.  For instance, using automated investor verification solutions reduces initial onboarding time to a few minutes, resulting in more than 90% enhancement and increased customer conversion rates. Despite the fact the investment sector is transforming, it is exposed to increased risk of crimes, leading to significant financial losses.

What is Investor Onboarding? 

Investor onboarding is introducing new investors to a financial or investment platform while screening them against financial crime databases by undergoing KYI checks to ensure that their initial investments are coming from legitimate sources. The traditional procedure usually takes months to ensure a seamless execution. However, investment firms can use automated Know Your Investor (KYI) checks to carry out the same process within seconds.

The first step of the KYI verification process is to identify the true identities of investors, followed by anti-money laundering screening and rigid due diligence checks. AML is one of the key steps in investor onboarding as it helps businesses screen their potential investors against a global financial crime database, ensuring that they are not linked with any crime. Once investors undergo the AML screening phase, they can make transactions.

Why is a Legitimate Investor Onboarding Process Important?

As mentioned, investor onboarding is a critical component of a fundraising process, so why exactly is this so important to investment firms? Firstly, meeting know your investor compliance is a regulatory obligation, and verifying identities helps firms meet this requirement while adhering to other regulations, such as Know Your Customer (KYC) and Anti-Money Laundering (AML) standards. An effective onboarding procedure ensures that KYI, KYC, and AML checks are practiced systematically, reducing the risk of onboarding fraudsters and effectively deterring financial crime.

In addition to meeting compliance requirements, the investor onboarding process is also imperative in creating a positive impression among the investor community, leading to long-lasting relationships. This can only be achieved by integrating state-of-the-art KYI solutions, while a slow, tedious investor onboarding procedure can lead to increased drop-offs and delays in capital deployment.

Ultimately, a frictionless onboarding journey frees up the capacity for investment firms to focus on value-adding tasks, for instance, finding new investors and managing investment portfolios.

b-info-consumers

What Steps Are Involved with Onboarding Investors?

Across all jurisdictions, particularly across Europe and the US, investment firms must practice certain checks to ensure compliance onboarding. These steps include:

  • Information Collection: Gather investors’ personally identifiable information, government-issued identity documents, and investor profiles required to complete the onboarding process. 
  • Document Authentication: automated checks create the templates and match them against ID documents placed in the database.
  • AML Screening: Undergo background screening against financial crime databases to verify that the potential investor has a clean track record.
  • Results: An investor is onboarded and authorized to make investments upon successful verification. 

While the above steps look simple, if done manually, they are complex processes involving an array of emails, form filling, and ongoing communication with each potential investor. This way of onboarding is not adequate for anyone involved, including investors, customers, and the firm. Practicing manual onboarding processes can damage investment firms’ reputations, leading to inconvenience and decreased conversion rates. Additionally, it could expose a firm to various risks, including GDPR compliance breaches, especially around gathering and managing investors’ personally identifiable information. Some investors may also find the onboarding process hectic, leading to frustration and backing out of their investments while investing their funds elsewhere. For these reasons, the investor onboarding process should be simple, investor-centric, and hassle-free for every entity involved.

Back-End Complexities in the Digital Investment Sector

By harnessing the power of automation, enhancements being made within customer onboarding processes are notable. The unnecessary complexity and blocks around compliance, verification, onboarding, and payments adversely impact both investors and the firm.

Compliance Roadblocks 

Any digital service other than opening a bank account can lead to a complex compliance structure and due diligence extensiveness. However, the compliance is designed to secure investors’ integrity. Many investment firms have failed to connect the disparate set of advanced technologies and services to make the investor onboarding journey frictionless. From investors’ identity verification to due diligence checks to AML screening, interjection of human resources and manual processes can become the reason for fluctuating investor onboardings, leading to lousy customer journeys.

Order Execution Bottlenecks

While the transactions of buying simply equity are fast, the tantalizing dream of  T+1 settlements still requires the swift execution of transactions. However, the US has a regulatory agenda for this issue, while India is pioneering the way to enhance the process. Still, surely investors who make same-day transactions for other payments will find it difficult to understand why this is not the same for securities; after all, it’s just a data transfer. In addition to delays, investment fund order execution is notoriously inconsistent. End-of-month clauses are uncommon and take days and months before money is invested. Those seeking to get benefits of timing and market corrections end up frustrated. Near to an investor, validation is not a necessary prerequisite for a purchase.

Transfer Delays 

While it’s challenging for many to completely understand why automated processes have not transformed the whole wealth management sector, some significant hurdles are more complex and fundamental than others – including transferring funds, switching between multiple wealth managers, and meeting regulatory obligations all while restricting to manual expert reviews and checks. Perhaps the most acute problem among these is the transfer of assets or wealth. The transfer between highly regulated and privately managed or self-directed schemes represents one of the most hectic and time-consuming processes investors face. It usually takes many months to process the transfer of wealth – by which time the market situation has most likely changed. Dealing with this specific problem has become an industry-wide challenge.

Manual Onboarding Process

Conventional paper-based investor onboarding processes require multiple human resources and outside counsel to handle document processing, including limited partner or non-disclosure agreements, side letters, and tax documents, while ensuring Anti-Money Laundering and Know Your Customer monitoring checks. However, managing this process manually requires spreadsheets, checklists, emails, and disparate platforms. In addition to this, determining the investors’ status also slows down the onboarding speed. This back-and-forth array of processes, including paperwork, signatures, and follow-ups, can take days and even months to verify the identity of an investor. However, harnessing the power of automation can streamline onboarding while eliminating the risk of inefficiency, frustrations, delays, and investor drop-offs.

Digital Investor Onboarding: The Ultimate Solution 

Finally, in today’s digital-first world, digitizing the entire journey using automation technologies is the best way to simplify the investor onboarding process and communicate effectively.

The question arises: how? An automated investor onboarding automatically reduces the potential of human error, removes friction, increases transparency, automates document processing, eliminates human interventions, and reduces onboarding time – all while enhancing the customer journey.

Here are some prominent examples of leveraging technology to enhance investor onboarding:

  1. Optical character recognition (OCR)  scanner to fast-track document verification using automated data extraction.
  2. E-signature to automate approvals
  3. Face biometric authentication for liveness detection and contactless onboarding.
  4. Customer relationship management solutions to track investors’ interactions, payments, and other activities.
  5. Integration with third-party identity verification services can save cost and onboarding time.
  6. Automated document verification solutions can streamline onboarding processes.
  7. NFC-based solutions can make payments more robust and secure.

However, investment and wealth management firms may have ample time and resources to automate each investor onboarding procedure component. Still, automation technologies can benefit by digitizing repetitive and redundant tasks while streamlining more complex aspects of the process.

Luckily, your business doesn’t need to worry, there is a state-of-the-art investor onboarding solution that can streamline your onboarding journey – Shufti!

Onboarding Legitimate Investors with Shufti

Shufti, a pioneer in offering identity verification services, provides investment firms with robust and technology-backed know your investor verification solutions that aid companies in determining investors’ identities while authenticating their status and documents in real-time. Our solution supports 10,000+ ID document types in more than 150+ languages with coverage across 240+ countries & territories, making it simple for businesses to authenticate their investors without delays.

With Shufti, your business can:

  1. Ensure only legitimate investors are onboarded, mitigating potential risks.
  2. Safeguard your business and mitigate risk with our experienced Money Laundering Reporting Officers.
  3. Reduces internal compliance costs by up to 60%.
  4. Comply with regulations and safeguard your business reputation.

Related Posts

Blog

Identity verification in social media – Lighting up the dark side

Social media is a word every one of us can relate to. With every passing day, it is penetrating i...

Identity verification in social media – Lighting up the dark side Explore More

Blog

License Verification for Online Transport Services

License Verification for Online Transport Services The world of transport services has dramatical...

License Verification for Online Transport Services Explore More

Blog

The Significance of Age Verification in the Digital Space

With the innovation of technology, digital services among younger audiences are becoming increasi...

The Significance of Age Verification in the Digital Space Explore More

Blog

Securing Business Operations with Risk Assessment

The increasing connectivity and dependence of the world on technology have led to a rise in sophi...

Securing Business Operations with Risk Assessment Explore More

Blog

KYC/AML Compliance – Eliminating Financial Crime in Challenger Banks

Challenger banks have emerged in the financial services paradigm by bringing digital innovations ...

KYC/AML Compliance – Eliminating Financial Crime in Challenger Banks Explore More

Blog

AML Compliance in the Insurance Sector – Red Flags to Look Out For

The insurance sector commonly faces criminal activities like money laundering and terrorist finan...

AML Compliance in the Insurance Sector – Red Flags to Look Out For Explore More

Blog

Shufti’s ID Fraud Report: Reviewing 2022 and a Preview of 2023

Twenty years back, “identity theft” was imagined as pictures of shady figures rifling through gar...

Shufti’s ID Fraud Report: Reviewing 2022 and a Preview of 2023 Explore More

Blog

Age Verification Laws and Regulations Worldwide

The world has become increasingly digital, making it easier to access age-restricted products, se...

Age Verification Laws and Regulations Worldwide Explore More

Blog

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 organis...

Identity Verification entails a lot more than customer verification Explore More

Blog, Reg Tech

Effect of the Amendment to the FINMA Compliance on IDV Service Providers

In the first quarter of the year 2018, the Swiss Financial Market Supervisory Authority rolled ou...

Effect of the Amendment to the FINMA Compliance on IDV Service Providers Explore More

Blog

10 Ways to Eliminate Business Fraud with Robotic Process Automation (RPA)

One of the prime concerns of businesses today is detecting and mitigating the risk of fraud. This...

10 Ways to Eliminate Business Fraud with Robotic Process Automation (RPA) Explore More

Blog

e-IDV | Combatting Fraud in a Remote World

Know Your Customer (KYC) is a method to identify and verify clients’ true identities and re...

e-IDV | Combatting Fraud in a Remote World Explore More

Blog

The Importance of KYC Remediation to Prevent Financial Crimes

If we talk about financial institutions including banks and their processes, one can freely argue...

The Importance of KYC Remediation to Prevent Financial Crimes Explore More

Blog

January 2023 Recap: Major Events Worldwide and How AML Verification Solution Can Help

Noncompliance with Know your Customer and Anti Money Laundering (KYC) regulations continue to pla...

January 2023 Recap: Major Events Worldwide and How AML Verification Solution Can Help Explore More

Blog

Know Your Driver – Urgency of Identity Verification for Mobility service Providers

Scams have been at the forefront whenever a new tool is made available. The same goes for ride-sh...

Know Your Driver – Urgency of Identity Verification for Mobility service Providers Explore More

Blog

KYC Isn’t Enough: Get Ready for the Future of Verification

Over the past few years, companies have been looking for more sophisticated identity verification...

KYC Isn’t Enough: Get Ready for the Future of Verification Explore More

Blog

April 2023 Recap: Major AML Fines and Key Events

With the world embracing digital transformation, scammers have adopted sophisticated strategies t...

April 2023 Recap: Major AML Fines and Key Events Explore More

Blog, Identity & KYC

User as Owner: Why KYC Software Needs to Respect Privacy Laws?

User as Owner is a simplistic concept that stipulates that all the data of any user collected by ...

User as Owner: Why KYC Software Needs to Respect Privacy Laws? Explore More

Blog, Financial Crime / AML

Shufti integrates AML Compliance into its end-to-end Verification Services

Shufti has now launched AML compliance in its set of identity verification services to provid...

Shufti integrates AML Compliance into its end-to-end Verification Services Explore More

Blog

5 Ways Face Recognition Will Become More Prevalent in 2023 and Beyond

During the covid pandemic, many businesses updated their access control systems to facial recogni...

5 Ways Face Recognition Will Become More Prevalent in 2023 and Beyond Explore More

Biometric Technology, Blog, Online Marketplace

Face Verification Becoming Vital For Travel Industry

Over the past few years, biometric technology has become increasingly mainstream. This is due in ...

Face Verification Becoming Vital For Travel Industry Explore More

Blog

AML/KYC 2020 – how 2019 changed the landscape of global regimes?

Copy pasting your 2019 AML/KYC compliance strategy to 2020 plan will not do the job. Businesses n...

AML/KYC 2020 – how 2019 changed the landscape of global regimes? Explore More

Blog

AI-Powered OCR to replace data entry in 2020 – A detailed insight

Living in the data-driven world, there is a huge demand for storing data from printed or handwrit...

AI-Powered OCR to replace data entry in 2020 – A detailed insight Explore More

Blog

Europol launches European Financial and Economic Crime Center (EFECC)

Financial and economic crimes are today the leading threats that are affecting millions of EU cit...

Europol launches European Financial and Economic Crime Center (EFECC) Explore More

Blog, Identity & KYC

KYC/AML Compliance in light of FinTRAC

Witnessing the updated AML/CTF regime; the guidelines by FinTRAC regarding ID verification have b...

KYC/AML Compliance in light of FinTRAC Explore More

Blog, Business Technology

What Due Diligence Means for Your Business

Due diligence is a process that helps banks and individuals to get to know in detail who they are...

What Due Diligence Means for Your Business Explore More

Blog

Verify on the fly: Touchless airport security clearance using biometrics

Around one hundred and seventeen years ago, the Wright brothers designed, built and flew the firs...

Verify on the fly: Touchless airport security clearance using biometrics Explore More

Blog

OCR Reader | How Does it Streamline the IDV Process?

The unprecedented growth in business automation has created a competitive market where businesses...

OCR Reader | How Does it Streamline the IDV Process? Explore More

Blog

The Looming Threat of Deepfake Apps for the Financial Industry

Deepfakes gained prominence back in 2017 when an anonymous Reddit user manipulated Google’s open-...

The Looming Threat of Deepfake Apps for the Financial Industry Explore More

Blog

A Guide to Understanding KYC in Banking

2022 has witnessed a rise in the number of fraudulent cases by 18% compared to 2021, damaging bus...

A Guide to Understanding KYC in Banking Explore More

Blog

Age Verification: Data Privacy and User Protection

In recent years, there’s been a lot of speculation surrounding the issue of whether or not ...

Age Verification: Data Privacy and User Protection Explore More

Blog, Financial Crime / AML

What is PEP Compliance and Why do Financial Institutions Need it?

For Politically Exposed Persons (PEPs), an inter-governmental body established in 1989, Financial...

What is PEP Compliance and Why do Financial Institutions Need it? Explore More

Blog

5 Predictions on the Future of Digital KYC and eKYC

It’s 2023. Welcome to the day and age of digital KYC verification. From multiple copies of ID car...

5 Predictions on the Future of Digital KYC and eKYC Explore More

Blog, Business Technology

Fraud Prevention in Fintech Industry

The FinTech industry has really made its mark in the last couple of years. FinTechs have been pro...

Fraud Prevention in Fintech Industry Explore More

Blog

Singapore’s Digital Payment Token and AML Regulations [2022 Updates]

Financial crimes are an ever-increasing threat to the global economic climate. As a financial hub...

Singapore’s Digital Payment Token and AML Regulations [2022 Updates] Explore More

Blog

Youtube Stepping up to Protect Minors’ Data Online

The explosion of the internet and mobile devices has paved new ways for marketers and Cybercrimin...

Youtube Stepping up to Protect Minors’ Data Online Explore More

Blog

Dirty Funds & Tax Evasion – Can the Crypto Sector Be Safeguarded?

2021 has turned out to be another eventful year for the cryptocurrency sector. In just a span of ...

Dirty Funds & Tax Evasion – Can the Crypto Sector Be Safeguarded? Explore More

Blog

AML Verification Services: Fighting Back Financial Crimes in 2023

The Covid-19 outbreak has increased reliance on eCommerce and digital banking — cultivating a lus...

AML Verification Services: Fighting Back Financial Crimes in 2023 Explore More

Blog

Strengthening digital businesses with online age verification

It is projected that by the end of 2021, 2.4 billion will buy products and services online, up 46...

Strengthening digital businesses with online age verification Explore More

Blog

How FinTech can Leverage on FINMA Blockchain Initiative?

Swiss Financial Markets Supervisory Authority (FINMA) has taken a revolutionary step in the histo...

How FinTech can Leverage on FINMA Blockchain Initiative? Explore More

Blog, Fraud Prevention

Identity Theft Frauds – How can you stay a step ahead?

Identity theft is ‘a hot potato’ these days. Every day we come across news of online fraud that h...

Identity Theft Frauds – How can you stay a step ahead? Explore More

Blog, Identity & KYC, Reg Tech

RegTech: The Case for Financial Inclusion

The FinTech industry has grown tremendously in recent years, introducing both scale and efficienc...

RegTech: The Case for Financial Inclusion Explore More

Blog

How FinTech can Leverage on FINMA Blockchain Initiative?

Swiss Financial Markets Supervisory Authority (FINMA) has taken a revolutionary step in the histo...

How FinTech can Leverage on FINMA Blockchain Initiative? Explore More

Blog

Know Your Customer – Addressing the Risks of Financial Crimes in Challenger Banks

With emerging technologies, financial services are witnessing a digital revolution that is changi...

Know Your Customer – Addressing the Risks of Financial Crimes in Challenger Banks Explore More

Blog, Online Marketplace

Know Your Customer Verification for Charity Organisations

They say no good deed goes unpunished, if we were to take a look at it literally the frauds that ...

Know Your Customer Verification for Charity Organisations Explore More

Blog

5 Predictions on the Future of Digital KYC and eKYC

It’s 2023. Welcome to the day and age of digital KYC verification. From multiple copies of ID car...

5 Predictions on the Future of Digital KYC and eKYC Explore More

Blog

FATF’s Travel Rule: A New Dawn of Regulations for Virtual Asset Services

Here at the start of 2021, there is much uncertainty regarding the coronavirus situation, whether...

FATF’s Travel Rule: A New Dawn of Regulations for Virtual Asset Services Explore More

Blog

Online Identity Verification – The Hallmark of Surviving the Digital Upheaval

Embracing the digital world seems like entering uncharted waters where the challenges are novel, ...

Online Identity Verification – The Hallmark of Surviving the Digital Upheaval Explore More

Blog

What Makes the Automotive Industry a Vehicle for Money Launderers

The automobile industry is the world’s biggest revenue-generating sector. In the global aut...

What Makes the Automotive Industry a Vehicle for Money Launderers Explore More

Blog, Business Technology

The demand for OCR Technology increasing for ID Verification

ID verification is core to overall identity verification services that help business around the g...

The demand for OCR Technology increasing for ID Verification Explore More

Blog

A Brief Insight Into Anti-Money Laundering (AML) Regulations in Colombia

Money laundering has become a global issue, and almost all countries are facing this threat in va...

A Brief Insight Into Anti-Money Laundering (AML) Regulations in Colombia Explore More

Blog

Inside the EU’s New Crypto-Assets Regulatory Regime – How Shufti Can Help

With transforming technologies, the use of cryptocurrency is skyrocketing, and a large number of ...

Inside the EU’s New Crypto-Assets Regulatory Regime – How Shufti Can Help Explore More

Blog

Money Laundering Spikes High in the Gulf Region – What’s Next?

Given the rapid increase in FinCrime, the Gulf region is now working day in and day out to impose...

Money Laundering Spikes High in the Gulf Region – What’s Next? Explore More

Blog

Digital KYC – Protecting All Generations from ID Fraud

From baby boomers to Gen Z, identity fraud is the problem of all generations. Studies suggest tha...

Digital KYC  – Protecting All Generations from ID Fraud Explore More

Blog

Six Ways to Protect Your Business from Christmas Scams

Christmas is around the corner and all of you must be very excited to decorate christmas trees, e...

Six Ways to Protect Your Business from Christmas Scams Explore More

Blog

Understanding UBOs: A Critical Component in Enhancing Security in the Financial Sector

Regulated entities must be aware of who they are interacting with. Validating the real identities...

Understanding UBOs: A Critical Component in Enhancing Security in the Financial Sector Explore More

Blog

DHSC’s Counter-fraud Strategy to Combat Healthcare Fraud

Healthcare remains one of the most lucrative industries for criminals with nearly $272 billion lo...

DHSC’s Counter-fraud Strategy to Combat Healthcare Fraud Explore More

Blog

7 Best KYC and Fraud Prevention Tips for Online Businesses

With the explosion of internet and web applications, the online interaction between consumers and...

7 Best KYC and Fraud Prevention Tips for Online Businesses Explore More

Blog

Blockchain and Identity Theft: Potential Challenges and how to Tackle Them

Blockchain has become increasingly popular because of its potential to provide secure transaction...

Blockchain and Identity Theft: Potential Challenges and how to Tackle Them Explore More

Blog

DSAR Under GDPR and CCPA – Understanding the Key Differences

Data protection is one of the key concerns of organisations these days. For the same reason, data...

DSAR Under GDPR and CCPA – Understanding the Key Differences Explore More

Blog, Online Marketplace

Ride Sharing Services and ease provided by KYC Services

Ride Sharing services might be the hottest form of transportation especially in developed countri...

Ride Sharing Services and ease provided by KYC Services Explore More

Blog

A Comprehensive Guide to KYC and AML Regulations in the UK

The increasing number of financial crimes in the UK calls for stringent measures to safeguard the...

A Comprehensive Guide to KYC and AML Regulations in the UK Explore More

Blog

Shufti’s Address Verification Service – A Key Step in Digital Identity Verification

The rapidly developing technology of today is altering how consumers browse for things online. Th...

Shufti’s Address Verification Service – A Key Step in Digital Identity Verification Explore More

Blog

KYC Checks in Crypto | A Key to Secure Digital Assets

In the last thirteen years, the crypto industry has redefined the financial sector. At the same t...

KYC Checks in Crypto | A Key to Secure Digital Assets Explore More

Blog, Reg Tech

EU’s 4th AML Directive Aims to make the Payment Ecosystem Crime Free

On June 26, 2018, the European Union landed the fourth AML directive that is targeted at combatin...

EU’s 4th AML Directive Aims to make the Payment Ecosystem Crime Free Explore More

Blog, Identity & KYC

User as Owner: Why KYC Software Needs to Respect Privacy Laws?

User as Owner is a simplistic concept that stipulates that all the data of any user collected by ...

User as Owner: Why KYC Software Needs to Respect Privacy Laws? Explore More

Blog, Identity & KYC, Online Marketplace

How KYC for ICOs can Make Cryptocurrency Great Again?

Give people a mode of money transaction free from banks. That was the thought behind cryptocurren...

How KYC for ICOs can Make Cryptocurrency Great Again? Explore More

Blog

Gambling Regulations in Germany Lay Ground for Robust Player Verification

User engagement towards digital platforms has been growing at an exponential pace for the past fe...

Gambling Regulations in Germany Lay Ground for Robust Player Verification Explore More

Blog

Securing Banks and Curbing Financial Crimes with Shufti AML/KYC Solution

Banks and other financial institutions constantly face the challenges of tackling financial crime...

Securing Banks and Curbing Financial Crimes with Shufti AML/KYC Solution Explore More

Blog

High-Risk Transactions – How Can Enhanced Due Diligence (EDD) Help?

In today’s continuously evolving world, businesses should not only focus on the revenue they gene...

High-Risk Transactions – How Can Enhanced Due Diligence (EDD) Help? Explore More

Blog

The Significance of Age Verification in the Digital Space

With the innovation of technology, digital services among younger audiences are becoming increasi...

The Significance of Age Verification in the Digital Space Explore More

Blog

The Most Common Use Cases of Identity Document Verification

As data breaches and other crimes increase, regulators must impose strict rules that corporations...

The Most Common Use Cases of Identity Document Verification Explore More

Take the next steps to better security.

Contact us

Get in touch with our experts. We'll help you find the perfect solution for your compliance and security needs.

Contact us

Request demo

Get free access to our platform and try our products today.

Get started