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

The Reason Why Companies Painstakingly Screen Customers

Remote identity Proofing

Remote identity Proofing:  generally believe that more customers bring more revenue. But that is not always the case. Sometimes getting more customers can, in fact, mean fewer profits or even a loss. This article looks at the reasons why businesses take great care in acquiring customers.

Screening by Insurance Companies

Let’s start with the striking example of the insurance industry, or health insurance in particular. Selecting the right pool of customers is crucial for them. They need to maintain an acceptable level of risk in their pool of customers. A person living a healthy lifestyle would bring a lesser risk to the pool. On the other hand, a person that frequently eats junk food and does not exercise brings additional risk.
From a business perspective, the less risky customer is more desirable. If the insurance pool contains more customers carrying less risk, the payouts or insurance claim would be less frequent. Conversely, a pool with a higher number of customers that live an unhealthy lifestyle means that the insurance company would have to pay claims more frequently.
Therefore, it makes perfect sense why companies invest considerable time and effort in screening customers.

Click Here For Remote identity Proofing In Real Time

An Example of Bad Screening Process

Say, an Insuretech firm (an insurance firm that primarily relies on tech innovation to earn revenues) uses the strategy of entering the market by providing insurance cover to those people that have been rejected by other insurance companies. This will not be a sound marketing plan.
The people who have been rejected by other insurance providers are likely to be carrying high risk. This would translate into frequent payouts (cash outflow) for the novice Insuretech company. They need good customers that pay their premiums consistently and are less likely to file a claim.
Another angle to look at this business equation is that when a company accepts more of ‘bad customers’ (high-risk individuals), it puts the burden on the good customers to increase their premium amounts. Business needs to generate consistent profits. Hence the emphasis on devising a strategic customer selection criterion.

Ethics Should be Part of the Business Strategy

Be it insurance or manufacturing, ethics play a critical role. For example, if a screening process results in a rejection list that contains more people of a certain race, demographic or ethnicity, this could be construed as discrimination. In some cases, the company might even incur a penalty under the law. Yes, it is not easy, unintentional breaches occur as well.

Using Machine Learning for Remote identity Proofing

Companies can use machine learning to screen customers. Consider a database where the management is setting filters for screening. For example, they might set the minimum income threshold of 120,000 euros to sell life insurance cover. But with machine learning, they might input ‘apparently’ uncorrelated elements such as if they take the bus to work or use carpooling. These parameters are neutral.
But even an apparently harmless filter such as ‘the number of rooms in their house’ could result in a rejection list that might indicate discrimination. Machine learning, data science in particular, can reveal correlations between elements that would not make sense to humans.
Strong coordination between data scientists and compliance can be a win-win. Companies could screen customers more effectively and still remain compliant.
In fact, businesses can refine their screening process by using compliant AI and machine learning screening. This is cost effective as well due to remote identity proofing. Real time identity proofing process refines the onboarding process for companies.
Screening customers is time consuming but when done effectively, the rewards are plentiful. Businesses do not just want every customer out there. Onboarding needs to be carefully aligned with the business goals while remaining compliant to regulations.

Related Posts

Blog

Safeguarding Financial Operations with Transaction Monitoring and AML Screening

To enhance the power of anti-money laundering regulation, transaction monitoring systems have evo...

Safeguarding Financial Operations with Transaction Monitoring and AML Screening Explore More

Blog, Financial Crime / AML

Impact of Canada’s Evolving AML Regimes on Your Business

Canada’s AML regulations changed a lot in 2019. More rigid AML regulations are imposed on all typ...

Impact of Canada’s Evolving AML Regimes on Your Business Explore More

Blog

Combating Money Laundering Threats in the Art and Antiquities Sector Through AML Screening Solutions

With transforming technologies and growing digitization, the global art industry has also embrace...

Combating Money Laundering Threats in the Art and Antiquities Sector Through AML Screening Solutions Explore More

Blog

A Detailed Insight into the Best Practices for Digital Currency Providers

The world has seen an overwhelming rate of development in the cryptocurrency sector with Centrali...

A Detailed Insight into the Best Practices for Digital Currency Providers Explore More

Blog

What 5 Businesses Have to Say About Shufti’s Digital AML/KYC Services

Various industries throughout the world are being transformed through automation thanks to the on...

What 5 Businesses Have to Say About Shufti’s Digital AML/KYC Services Explore More

Blog

Top 10 Forged ID Documents on the Dark Web in 2023

As criminal activity increases every year, the massive amounts of data being uploaded to the inte...

Top 10 Forged ID Documents on the Dark Web in 2023 Explore More

Blog, Financial Crime / AML

Challenges of AML Compliance under FinCEN

AML Compliance for US based Cryptocurrency companies has been tightened by Financial Crimes Enfor...

Challenges of AML Compliance under FinCEN Explore More

Blog

KYCC – Going an Extra Mile to Prevent Financial Crimes

As cases of money laundering and terror financing are increasing globally, the concerns to overco...

KYCC – Going an Extra Mile to Prevent Financial Crimes Explore More

Blog

Latest Gaming & Gambling Regulations Worldwide and the Role of Age Verification

Online gaming has become more popular since COVID-19. The pandemic forced people to stay indoors,...

Latest Gaming & Gambling Regulations Worldwide and the Role of Age Verification Explore More

Blog

A Detailed Insight into Due Diligence for SMEs in Europe

Recent developments in due diligence legislations have prompted debate on SMEs being subject to t...

A Detailed Insight into Due Diligence for SMEs in Europe Explore More

Blog

KYC Regulations Across the Globe | An Updated Guide 2023

 The global financial industry finds it hard to meet compliance and secure sensitive cus...

KYC Regulations Across the Globe | An Updated Guide 2023 Explore More

Blog

Rising Social Media Scams in 2020 Calling for Digital Identity Verification

Social media was a simple place for interaction a few years back. People valued it for its securi...

Rising Social Media Scams in 2020 Calling for Digital Identity Verification Explore More

Blog

Real Estate Industry Crimes and Strict AML Regulations – How Shufti Can Help

The real estate industry has long provided a safe way for fraudsters to secretly launder or inves...

Real Estate Industry Crimes and Strict AML Regulations – How Shufti Can Help Explore More

Blog

Paradigm Shift amid Corona – Online sales to take outstanding growth

Coronavirus outbreak is proving to be catastrophic for the world with global cases reaching 2,495...

Paradigm Shift amid Corona – Online sales to take outstanding growth Explore More

Blog

An inside look at the need for AML in the e-gaming industry

Data analytics and trends show the penetration of the population into console-based online video ...

An inside look at the need for AML in the e-gaming industry Explore More

Blog

Anti-Money Laundering Screening | Securing Digital Economies from Financial Crimes

The increased reliance on digital banking and the advent of virtual currencies in today’s d...

Anti-Money Laundering Screening | Securing Digital Economies from Financial Crimes Explore More

Blog

AML Compliance for Luxury Goods Market – How Shufti can Help

Money laundering using high-value goods such as jewelry, yachts, motor vehicles, watches, fine ar...

AML Compliance for Luxury Goods Market – How Shufti can Help Explore More

Blog

New KYC Regime for the UK, US, and Australia – What’s in it for Financial Institutions?

Financial institutions are known for getting their reputation maligned due to crimes like identit...

New KYC Regime for the UK, US, and Australia – What’s in it for Financial Institutions? Explore More

Blog

FinTech and FinCrime – The Global Regulatory Landscape

Also known as financial technology, FinTech is now among the fastest-growing industries. This sec...

FinTech and FinCrime – The Global Regulatory Landscape Explore More

Blog

What are chargeback frauds and what do they mean for businesses?

The world we live in no longer seems to be honest and fair. A large number of individuals are par...

What are chargeback frauds and what do they mean for businesses? Explore More

Blog

Japanese FSA to Beef Up AML Systems from Fiscal 2021

Growth in South Asia has far exceeded that in any other country over the past few years and digit...

Japanese FSA to Beef Up AML Systems from Fiscal 2021 Explore More

Blog

4 WAYS AI is Shaping KYC and AML Compliance for Businesses

The role of Artificial Intelligence (AI) is rapidly increasing in businesses and the emergence of...

4 WAYS AI is Shaping KYC and AML Compliance for Businesses Explore More

Blog

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 o...

Deutsche Bank’s Epstein Fine – Lesson for Financial Institution Explore More

Anti Money Laundering, Blog

How is Libra’s Launch Changing the Cryptocurrency Landscape?

Libra will have to go the extra mile to prove itself worthy of global acclaim that it aims to ach...

How is Libra’s Launch Changing the Cryptocurrency Landscape? Explore More

Blog

Antiquities Market – A Conduit of Money Laundering and Terror Financing

Money laundering and terror financing through art and antiquities has been a concern of regulator...

Antiquities Market – A Conduit of Money Laundering and Terror Financing 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

Customer Due Diligence – Risk Scoring of Fraudsters to Prevent Crimes

As per the research of The Journal of Accountancy, fraudsters carry out crimes for two reasons: n...

Customer Due Diligence – Risk Scoring of Fraudsters to Prevent Crimes Explore More

Blog

Red Flags to Detect Money Laundering in the Finance Sector

As the digital landscape continues to evolve at an exponential rate, so do our tools for fraud- d...

Red Flags to Detect Money Laundering in the Finance Sector Explore More

Blog, Online Marketplace

How the Rise of ID Verification Promises Trillions of Dollars for Online Marketplace?

The affliction of cybercrimes and online frauds has reached such high proportions that the cost o...

How the Rise of ID Verification Promises Trillions of Dollars for Online Marketplace? Explore More

Blog

KYC in banking: How American banks can fight identity thieves?

In the present globalized, fast-evolving sphere, revolutionizing KYC (Know Your Customer) is cruc...

KYC in banking: How American banks can fight identity thieves? Explore More

Blog

ID Verification for Ultimate Subscription Fraud Prevention

Cellular phones were first introduced in the consumer market in 1973 when Motorolla first introdu...

ID Verification for Ultimate Subscription Fraud Prevention Explore More

Blog

KYCC – Going an Extra Mile to Prevent Financial Crimes

As cases of money laundering and terror financing are increasing globally, the concerns to overco...

KYCC – Going an Extra Mile to Prevent Financial Crimes Explore More

Blog

Post COVID-19 – What are the alternatives to fingerprint biometrics for identity verification?

The way things are headed, there is no doubt about the fact that the world will be a different pl...

Post COVID-19 – What are the alternatives to fingerprint biometrics for identity verification? Explore More

Blog

On-Premises Identity Verification – A Solution to Prevent Data Breaches

From virtual modes of communication to digitised solutions for operating efficiently, the perks o...

On-Premises Identity Verification – A Solution to Prevent Data Breaches Explore More

Blog

Avoid Non-Compliance Fines with AML Transaction Monitoring

Cybercriminals in the realm of fraud and financial crime are constantly revising exploitation met...

Avoid Non-Compliance Fines with AML Transaction Monitoring Explore More

Blog

Cryptocurrency Market and Financial Crimes: How to Handle Transaction Monitoring

The adoption of cryptocurrencies by both individuals and businesses has exploded in the last 12 m...

Cryptocurrency Market and Financial Crimes: How to Handle Transaction Monitoring Explore More

Blog

Digital KYC to Trace and Tackle High-Risk Customers

Customers are the assets and building blocks of any business. Customers are responsible for takin...

Digital KYC to Trace and Tackle High-Risk Customers Explore More

Blog

Top 5 Payment Trends Transforming the Commerce Sector in 2021

Financial markets across the globe saw many unpredictable changes due to the pandemic last year. ...

Top 5 Payment Trends Transforming the Commerce Sector in 2021 Explore More

Blog, Identity & KYC

Age Verification – Ultimate Online Protection for Minors

The rapid increase in the use of the internet is raising some major concerns for parents regardin...

Age Verification – Ultimate Online Protection for Minors Explore More

Blog

How to Protect Yourself From Cyber Crime in the Holiday Season?

Most people around the world do the majority of their shopping during the holiday season. Accordi...

How to Protect Yourself From Cyber Crime in the Holiday Season? Explore More

Blog

Phishing Attacks and the Role of Two-Factor Authentication

In today’s digital world, almost everything we do is on the internet, be it for official purposes...

Phishing Attacks and the Role of Two-Factor Authentication 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

6 industry experts explain the role of KYC in cybersecurity

Cybersecurity is no more limited to firewalls and antiviruses. It is protecting your system, empl...

6 industry experts explain the role of KYC in cybersecurity Explore More

Blog

Fighting Deepfakes with Fool-Proofed Identity Verification Systems: How Shufti Can Help

Undoubtedly, 21st century is the most innovative time period in human history. With every passing...

Fighting Deepfakes with Fool-Proofed Identity Verification Systems: How Shufti Can Help Explore More

Blog

Biometric Facial Recognition – Combating Identity Fraud with Shufti’s IDV Solution

Since knowledge-based authentication and passwords were first introduced, security systems in ban...

Biometric Facial Recognition – Combating Identity Fraud with Shufti’s IDV Solution Explore More

Blog

Social Media Platforms and Increasing Crimes – How Shufti’s ID Verification Services Can Protect

The rise and evolution of social media have completely transformed the way people communicated an...

Social Media Platforms and Increasing Crimes – How Shufti’s ID Verification Services Can Protect Explore More

Blog

Enhanced Digital Security with Facial Recognition and Liveness detection

The increasing number of cyber-attacks and online fraud calls out for strong security measures. U...

Enhanced Digital Security with Facial Recognition and Liveness detection Explore More

Blog, Identity & KYC

Why You Need To Know Your Buyer

Online payments are fast replacing cash transactions with the top payment companies harboring 1bi...

Why You Need To Know Your Buyer Explore More

Blog, Business Technology, Financial Crime / AML, Identity & KYC, Online Marketplace

Know Your Business: The Next Step in Identity Verification

The complex regulatory environment and increased exposure to illegal activities indicate that bus...

Know Your Business: The Next Step in Identity Verification Explore More

Blog

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 ...

The Role of Digital Identity in Business-Customer Relationship Explore More

Blog

Shufti’s Bug Bounty Programme: Strengthening Security Via Ethical Hacking

With the avalanche of security vulnerabilities in the verification industry, Shufti is launch...

Shufti’s Bug Bounty Programme: Strengthening Security Via Ethical Hacking Explore More

Blog

5 Ways AI Takes Document Verification to the Next Level

Data digitisation has made it accessible not only to legitimate users but also to cyber criminals...

5 Ways AI Takes Document Verification to the Next Level Explore More

Artificial Intelligence, Blog

Knowledge Based Authentication a Thing of Past

If you are wondering what is knowledge-based authentication or KBA, let me ask you a question, ‘w...

Knowledge Based Authentication a Thing of Past Explore More

Blog

Shufti’s Insights on Enhancing Customer Onboarding Experience

The digital world nowadays requires a lot of effort from businesses to ensure customer satisfacti...

Shufti’s Insights on Enhancing Customer Onboarding Experience Explore More

Blog

Anti Money Laundering – What is AML compliance and why is it important?

Anti-money laundering compliance is vital for obliged entities and being conversant with AML comp...

Anti Money Laundering – What is AML compliance and why is it important? Explore More

Blog

AML compliance checklist for efficient AML screening in 2020

2019 brought a plethora of AML regulations for businesses and non-compliance is no more an option...

AML compliance checklist for efficient AML screening in 2020 Explore More

Blog

Record-Breaking Fines on Banks for KYC/AML Non-Compliance

Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance have been structured to make ...

Record-Breaking Fines on Banks for KYC/AML Non-Compliance Explore More

Blog

Digital Wallet Fraud | How AML Screening Solution Can Help

Digital wallets are becoming everyone’s go-to transaction method and the total number of e-wallet...

Digital Wallet Fraud | How AML Screening Solution Can Help Explore More

Blog

ETSI Identity Proofing Standard – How to Meet the New Regulations

Rapid digitization trends have led banks and financial institutions into competition for providin...

ETSI Identity Proofing Standard – How to Meet the New Regulations Explore More

Blog

How Artificial Intelligence is taking ID verification to the next level?

Identity theft is deemed as a growing problem. Particularly with the increase in online shopping,...

How Artificial Intelligence is taking ID verification to the next level? Explore More

Blog

Top 5 Ways Minors Use to Dodge Age Verification Checks

Protecting minors from the perils of the digital world is nearly impossible for businesses withou...

Top 5 Ways Minors Use to Dodge Age Verification Checks Explore More

Blog, Financial Crime / AML, Reg Tech

AMLD5 – Regulations catching up with Technology

In this era of technology, it is a common saying that “Innovation leads and regulation follows.” ...

AMLD5 – Regulations catching up with Technology Explore More

Blog

Is Your Company Safe? The Importance of Document Verification to Strengthen KYC Checks

Businesses across the globe are still vulnerable to threats like money laundering, terrorist fina...

Is Your Company Safe? The Importance of Document Verification to Strengthen KYC Checks Explore More

Blog

Covid Report Verification: New Restriction for Airports

The Covid-19 cases have drastically increased over time and as of February 6, 2021, 18,262 new ca...

Covid Report Verification: New Restriction for Airports Explore More

Blog

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

Digital onboarding these days is getting tougher for firms working and managing their business op...

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

Biometric Technology, Blog

How eIDAS compliance is easier with Biometric Consent from Shufti pro?

Biometric consent authentication is a brand new verification solution from Shufti, using an i...

How eIDAS compliance is easier with Biometric Consent from Shufti pro? Explore More

Blog

11 Common Mistakes End-Users Commit During KYC – Shufti

KYC identity verification is one big challenge for end-users. Your customers might be making a lo...

11 Common Mistakes End-Users Commit During KYC – Shufti Explore More

Blog

A Brief Overview of the Cryptocurrency Landscape in the US and Canada [2022]

The adoption of cryptocurrency throughout the world has ignited the launch of new markets and reg...

A Brief Overview of the Cryptocurrency Landscape in the US and Canada [2022] Explore More

Blog

Analyzing and Balancing the Variables of an Effective Identity Verification Solution

Today’s constantly transforming digital landscape where technology empowers businesses fast-paced...

Analyzing and Balancing the Variables of an Effective Identity Verification Solution Explore More

Blog

Travel Industry – Trends, Scams, and a Solution to Combat Fraud

The modern world is filled with surprises for everyone nowadays. Be it individuals or enterprises...

Travel Industry – Trends, Scams, and a Solution to Combat Fraud Explore More

Blog

AML Screening – Revealing the True Identities of Ultimate Beneficial Owners in Businesses

Hiding the Ultimate Beneficial Owners (UBOs) behind a business is never a good sign. However, som...

AML Screening – Revealing the True Identities of Ultimate Beneficial Owners in Businesses Explore More

Blog

Transaction Monitoring – Establishing A Defense Mechanism Against Financial Crime

With the rapid increase in the global volume of monetary transactions, money laundering methods a...

Transaction Monitoring – Establishing A  Defense  Mechanism Against Financial Crime 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