Merchant identity proofing: building trustworthy B2B relations

Merchant Identity Proofing: Building Strong B2B Relations

Identity Proofing: The success of e-commerce has been very remarkable. It is expected that global e-commerce sales will reach $632 billion by 2020. There was a time when only a few huge names were present on online platforms securing a huge customer base. The evolution of global markets and the integration of the customers and markets from around the globe have raised the competition in the market. When a consumer or a business search online for its need there are plenty of solutions provided by plenty of businesses from every corner of the world. The times are long gone when only a few market makers were present online and were considered trustworthy. Nowadays the businesses are building global B2B relations. The world has evolved into a global village and it has generated numerous opportunities for legitimate businesses and fake merchants. The businesses are keen on acquiring global merchants while controlling their costs and increasing their revenues.
Often the merchants oversee the threat of acquiring fake merchants due to the low prices and fake promises made by those fake merchants. It is a common belief that the businesses only need to perform KYC and AML screening on their customers and only the customers are posing threat towards the businesses operating online. The scenario is quite different the businesses are also exposed to a global merchant base. The merchants from every part of the world are pitching in a very attractive way for their businesses and many of them are fake. Many are using stolen merchant identities to build credibility and many are using marketing techniques to trap businesses into their fake merchant portfolio. It is necessary for businesses to know their partners and their merchants.
The merchant of a business is not only providing services or goods it becomes a part of the organization. And the organizational credibility is most likely to be affected if the business builds B2B relation with fake merchants, whose aim behind the business relation is monetary gain, money laundering or even worse, i.e. terrorist financing.

How fake merchant fraud can affect your business?

Fake merchant fraud works in two ways. Either the criminal steals the business identity proofing of a merchant or builds a fake identity using the stolen credentials of a person. The fake merchants pose huge threats to the businesses. The fake merchant fraud could cause revenue loss, loss of credibility, unhappy customers and regulatory penalties.

Fake merchant and hidden beneficiaries:

The money launderers and criminals build fake businesses and use the platforms to wash their laundered money. These businesses perform normal business operations and build B2B relations with other businesses. Do not fall prey to their trap of attractive and promising marketing techniques.
The businesses around the world are bound by corporate social responsibilities. Raising charity for orphans and giving shelter to the needy are still very worthy acts that add a lot to the value of the company and enhance the company profile. But imagine how much of bad fame a business would get if it is found to have B2B relations with a business owned by terrorist financer or a money launderer. Running an in-depth identity verification and AML screening on a merchant can eliminate such a huge setback. Performing AML screening on a merchant takes a few seconds while building a market value and credibility takes years, hence it is vital for businesses to exercise due diligence on their merchants as well as customers to build a strong and trustworthy relationship with all the stakeholders.

Data breaches by your vendors:

Often the fake merchants build a relationship with some business and extract the confidential data of the customers. Once the data have been extracted it is used to commit an array of frauds and crimes.
The most common frauds that are performed using the stolen confidential data are excessive chargebacks, illegal funds transfer and use of customer’s stolen identity for making purchases and much more. These frauds are committed using the data attained from the platform of a legitimate business and the ultimate loss is born by the business whose platform has been used for conducting the frauds. Once the data has been stolen it is sold on the black web and is further used for crimes like money laundering, human trafficking, drug trafficking, and terrorist financing.
The criminals are carving more enhanced and advanced ways of crimes using the loopholes in the e-commerce sector, hence it is necessary to perform complete identity proofing and AML verification of the merchants of an organization. In online relations, where orders are placed and proceeds are confirmed online, the risk of acquiring a fake merchant is high, hence this risk can be completely eliminated by performing in-depth identity verification of the merchant.

Perks of performing identity verification of merchants:

Identity verification of the merchants is necessary because it not only help the businesses to identify their merchants and prevent fraud but it brings many more advantages for the business.

  • Identity proofing of the merchant helps the business in the prevention of loss that the fraud may bring in. In case the merchant of business has used the confidential customer data for illegal purposes the ultimate loss comes to the business. The loss is not only monetary but also the business loses its reputation among the customers and in the industry. The loss of customer value means the loss of revenue. Such loss can be prevented with the help of AML screening and identity verification of the prospective merchants.
  • Often the businesses have unique requirements for choosing a vendor. The businesses often do not want to connect with merchants from some specific regions of the world, hence the geolocation and identity verification service of Shufti Pro helps the businesses to identify their merchant’s location and his true nationality by screening the ID proof that the merchant may provide. The OCR feature of Shufti Pro’s document verification solution screens all the information on the ID document provided and also provides the proof if the document is original or fake. Hence the businesses can easily scrutinize the prospective clients making it easier for them to select a trustworthy and credible merchant based on their specific needs and requirements.
  • The identity proofing of the vendors and merchants of the business will add another star to the portfolio of the company as it will be a form of regulatory compliance. Although the regulations are rigid only for performing due diligence on customers, the organizations found in connection with the terrorist organizations and PEPs (Politically Exposed People) comes under the strict scrutiny radar of the regulatory authorities.

Hence the businesses should consider the identity proofing of the vendor as an investment that will reap longterm gains for the organizations. Businesses of all types and all sizes are exposed to the risk of cybercrime and fake vendors, hence it is necessary to think in new dimensions. Shufti Pro’s AML and KYC verification solution is the advanced solution which helps the businesses to stay one step ahead of criminals and fake merchants.

Identity Proofing: Secure Your Business From Third-Party Data Breaches

Identity Proofing – Prevention from Data Breaches

World economic forum states that Cyberattack is mapped as one of the top threats to global stability. A cyberattack occurs every 39 seconds. Research states that the global economy can lose $445 billion a year due to cybercrimes. The stolen data is used to defraud the businesses for financial gain which ultimately turns into the financial and value loss of the business. According to a survey of Insurance Information Institue, out of 3 million stolen identities in America, more than 50% of those stolen identities were used for online financial credit card fraud with banks and online businesses.
Such an alarming increase in cybercrime magnitude and methods have made the businesses to invest in global identity proofing and document verification solutions. A survey reports that 63 percent of companies have implemented a biometric system or plan to onboard a customer.

Huge data breaches raising KYC concerns of businesses:

Huge data breaches have occurred raising a question on the cybersecurity of the so-called top-notch organizations dealing with confidential data of millions of people and businesses. For instance, the recent data breach of Equifax has caused losses of worth millions of dollars to the credit rating agency and also the other businesses. The huge data breach compromised 143 million records which contained the records of not only individuals but businesses also. According to a recent settlement with the regulatory authorities, Equifax is liable to pay a settlement of 245 million and also free credit rating to the victims of this data breach. Some other huge data breaches that affected the businesses in the past are the data breaches of Target, TJX and facebook. Those data breaches not only influenced the individuals but the businesses as well.

How a third-party data breach may become your liability?

Once an incident of data breach occurs it leaves an impact on several entities. The most common targets of the third-party data breaches are the businesses that do not have strong identity verification solutions integrated into their systems. The need for a strong identity verification solution cannot be overlooked by the businesses willing to prevail in the market for a longer period of time.

Risk of identity thieves:

After stealing the legitimate data of individuals from some third party server the fraudsters move towards the next step and buys goods and services from online businesses using the stolen identities. The business delivers the goods and services charging from the illegally accessed account. Once the victim realizes about the misuse of his identity proofing he gets a refund due to consumer protection laws and the business is the ultimate loss bearer. Other than illegal purchases there is an array of crimes initiated with a mere stolen identity, most common are, terrorist financing, money laundering, human trafficking, drug dealing, etc.
The phenomenon of stolen identities could affect businesses of all kinds in many ways and can influence many industries simultaneously, let it be a financial institution, online business, hospital or non-profit organization identity theft has caused huge losses.

Increase in fraudulent transactions

Once the individuals have access to the personal credentials of the individual he uses it often for financial fraud. Mostly the banks and financial institutions are defrauded through illegal transactions to an from the account of their legitimate client. According to a survey, online fraudsters managed to steal £1.2 billion from UK-based banks even in the presence of strict regulations regarding KYC (Know Your Customer) and AML (Anti Money Laundering). Also, the banks lost 123 million to internet banking fraud.
The fraudulent transaction fraud does not target the banks only. It targets all types of financial and fintech businesses. For example, a business facilitating online money transfer is defrauded by sending or receiving money using the stolen credentials. Other than that cryptocurrencies have been a very common victim of identity thieves and terrorists, the security loopholes make it easy for the criminals to hide their identity and money transfer trail.

Your business identity might be misused

The major data breach that hit Equifax in 2017 compromised the data of many individuals and businesses. The identity of a business, either big or small is a very valuable asset. Once that asset has been compromised it can start a range of losses for the business, including financial loss, loss of customer value, loss of competitive edge and the loss of competitive edge. Hence the misuse of a business’s identity could bring that business to its knees. The criminals could crack huge deals using the stolen credibility of a business. The identity thief might sell low-quality goods to the other business or client using the stolen business identity, ultimately this crime cycle will end with the loss of company value of the victim company.
The stolen business identity could be used for even more grave acts like money laundering or terrorist financing.

Getting a job with stolen identity:

The stolen credentials in a data breach are sold for as low as 10 to 15 dollars in the black web. Using these stolen identities the criminals get jobs at companies with the motive of hiding their true identity or to perform even bigger crimes like data breach while being an employee of the company. In case a business performs an efficient identity proofing on his employees before onboarding the new people, the risk of loss due to identity thieves is less than 1%.

How identity proofing helps in risk mitigation

Identity proofing helps the businesses to screen the true identities of the customers and employees before on-boarding them. The integration of AI-based global identity proofing systems adds layer after layer of security to the company profile. Hence the fake identities are highlighted before any damage could be done. Below is how timely investment in identity proofing solutions reduces the risk of loss due to third party data breaches:

  • ID verification screens all types of IDs and other identity documents for originality, expiry dates, forged data, MRZ code, hologram, reflected colors and photoshop.
  • Facial verification adds another security layer by checking the facial image in real-time for liveliness, 3D depth perception, and micro expression. Hence making it impossible for any fake person to as a person whose identity he has stolen.
  • Two-factor identity proofing makes the identification process even easier flexible for clients and businesses.

All the above-mentioned solutions help the businesses in keeping the identity thieves at bay while making it difficult for the fraudsters to stolen identities to cause any loss to the business. The data breaches no matter how old, have the tendency to cause loss to all types of businesses. Businesses need to integrate an Identity Proofing solution into their systems so that the data breach of some third party like Equifax, google or facebook might not become your liability in the form of identity theft-related frauds.

Remote identity Proofing

The Reason Why Companies Painstakingly Screen Customers

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.

Digital Kyc

6 Digital Solutions for Banks to Help with KYC

Digital KYC: For banks, streamlining the customer onboarding is essential. The manual way of entering client information into the system is redundant and time-consuming. In this age of ‘do it now’, banks need a tech-based approach for onboarding customers.

Also, technology alone can’t solve these problems. Its implementation needs to be strategic, logical and customer oriented. For example, banks need to comply with regulations such as know your customer (KYC), and the customers want swift and easy interaction with the banking system. AI-based digital solutions can help both the banks and the customers.

Read How Digital KYC Solutions Work in 60 Seconds

Problems Banks Currently Face in Onboarding

According to a KPMG report, a tier 1 bank could easily be spending about $100 million annually on onboarding clients. Despite spending this much, this manual process is error-prone, slow, risky (due to lack of regulatory compliance) and does not enhance the client experience. 

The majority of the problems associated with client onboarding are related to the outmoded manual onboarding. For example;

  1. Manual form filling and questioning are time-consuming.
  2. There is an ever-increasing demand for transparency by the regulators. Keeping up with these demands is arduous.
  3. The process is complicated and slow from the customer’s perspective.

The solution to such problems should consider three main factors; the business side, regulatory compliance, and modern technology. Coordination among these three pillars will exhibit the benefits of digital KYC. 

Here are 6 Digital Solutions to help with KYC

  • Face Verification

Simply put, the user takes a selfie with their smartphone or with a webcam. The software (digital KYC solution provider) ascertains the physical presence of the individual. AI-based methods can differentiate between a picture and a live face using 3D depth perception and color texture. This prevents spoofing attacks. Contemporary solution providers use microexpressions for verification as well.

  • Document Verification

With the camera of a smartphone or computer, the software scans documents for verification. Normally this includes verifying government-issued ID cards, passports, or driver’s license. Smart solutions determine the authenticity of documents and ensure that they are not tampered with. They also check for the format to assure that the document is original. For example, besides checking the apparent format of the passport it checks the machine readable zone (MRZ), which is usually located at the bottom of the identity page.

  •  Address Verification  

Verifying the physical address is a crucial part of the customer’s identity. It acts as a solid deterrence against identity theft. By ‘reading’ the government-issued documents such as ID cards, digital KYC solutions authenticate that the document is genuine, and the address mentioned on it is not forged or tampered with. The best services offer hybrid solutions; first, the document is verified by the machine, then, a trained person ensures that the verification is error free. See how Shufti Pro performs all this in just 60 seconds.  

  • Two Factor Authentication

The combination of phone and internet is used in the two-factor authentication. The user simply enters their phone number into the app or software, then, a code is sent to their phone. The user is then requested to enter that code into the web interface to authenticate.

  • Anti Money Laundering (AML) Screening 

Banks not only have to ‘know their customers’ but they also have to perform due diligence before they doing any form of business with them. They need to screen them to ensure that they are not listed on the anti-money laundering watch list. This service is also available to banks in a digital form. The best solutions out there update their database every few minutes, so that when they screen, it cross-checks with the most recent data. 

  • Knowing Customers through Customized Documents

Smart digital solutions are capable of reading handwritten notes and custom documents. This is achieved through optical character recognition, which is powered by AI and machine learning. Digital KYC verification is an impetus for comprehensive due diligence. 

Despite the various benefits, tech-based solutions alone are not enough. The integration needs to make business sense for banks. KYC – digital or manual – needs to be in compliance with the regulations. The majority of banks spend huge sums of money on compliance but still, come short on many fronts. Third party services are a cost-effective and feasible option; compliance is met and customers get fast and easy communication with the banks.

Id Verification Services

What are the Different Types and Solutions of ID Verification?

Customer identification is not an option for some businesses, it’s a must. Ignoring due diligence could get them in legal trouble. This article looks at the types and solutions of ID verification. It also looks at why customer due diligence is critical for financial institutions, and what they should look for while evaluating ID verification services.

Types of ID Verifications

Different companies require different types of ID verifications. The ‘type’ depends on the nature of the business. For example, banks have more security checks and layers, as opposed, say, a website, that simply wants to collect verified email addresses. 

Biometric is the most common form of identity verification. It verifies an individual through one or more unique biological traits. Fingerprints, retina and iris patterns, etc. are the classic methods of biometric verification. Add document verification to it and this combination fortifies the identity verification.

Drivers Licence, passport, a government-issued identity document, are the most common papers used in this process. Additionally, a document issued by a credible organization such as the credit bureau might also be used. 

For instance, if a business would like to; identify an individual online, verify their passport, and then match their live face with the picture on the passport, this can be done in no time. How? Let us show you. Shufti Pro offers a free demo. 

Who Regulates ID Verification Services?  

ID verification services help companies achieve anti-money laundering (AML) and know your customer (KYC) compliance. In the US, the Financial Crimes Enforcement Network Fincen is the main body regulating the compliance procedure. In the UK, the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) – under the Financial Conduct Authority FCA –  checks the AML compliance.

Similarly, other countries have their own regulatory bodies that ensure that banks and financial institutes (FIs) follow due diligence. 

What about the Old Form of Verification?

The old style of identity verification, known as knowledge-based authentication (KBA) asks personal questions from the user to verify their identity. This process is still used as an alternative. However, this is not considered as safe; information about someone can be found easily through social media. 

In addition, KBA is slow. Answering questions about someone’s pet’s name or their first school can be irritating. People want instant access; one-touch should unlock phone, doors, start a car, give access to the bank account and on and on.

There are several ways verification solution providers help businesses. Since the majority of businesses operate online, they need services that can be integrated into their business through the internet. 

Integrating Verification Solutions

APIs are used extensively to connect business portals with verification solution providers. These are used for desktops and websites. Similarly, plug and play solutions are available for Android and iOS devices. And in case, a company does not have a team of developers then hosted verification solutions are also available. Check out different integration options at Shufti Pro.

The world demands faster services; faster browsing, faster package delivery, and of course faster verification. Solutions such as Shufti Pro that use artificial intelligence and machine learning verify customers in real time. This is especially helpful for businesses since they fear the loss of revenue from the friction that compliance processes create.

Electronic Identification

Global businesses face an additional challenge; they have to comply with regional as well as international regulations. This can get complicated. Not many identification services can truly call themselves global. Accurate compliance rests on exhaustive legal and technical work, integrated with the business process to ensure streamlined and compliant user experience.

Trustworthy services mitigate risk by taking the burden of customer verification from companies. It also helps reduce revenue losses due to ID fraud. Trust increases which creates an aura of safety around the business. People like to do business with companies they trust, which check all the safety boxes. 

Id Verification Services help increase customer retention and acquisition. They also assist with due diligence. What this means is that services check the customer’s identity across different lists to make sure that the person is not a financial risk to the company.   

Documents Verification

An entire universe of documents is used for verification. For instance, Shufti Pro verifies 3000+ different types of documents. Among other tools, we use optical character recognition (OCR) to read and verify documents. It reads documents – including handwritten notes – like a human.

Data Sources

A truly helpful verification solution should be robust in checking a customer’s identity across sanction lists and watch lists. These include, among others; the anti-money laundering list, anti-terrorism, and politically exposed person (PEP) lists. This highlights the growing need for customer identification. Shufti Pro checks a person’s name across 1000+ sanction lists plus 3000+ databases. Its own AML database updates every 15 minutes to ensure the most accurate compliance.  

Bear in mind that the quality and authenticity of the database the verification reliable. For high-risk transactions government, credit, and utility data sources serve the best. For low-risk processes or as a supplement, the solution providers might use consumer sources.

Customer Due Diligence

What is Customer Due Diligence CDD?

Customer due diligence is a process that helps achieve KYC and AML compliance. Background checks, customer identification, and verification are standard diligence procedures.

What is Enhanced Due Diligence EDD?

Sometimes a customer carries additional risk, and plain due diligence just doesn’t cut it. They might need constant monitoring. Some politically exposed individuals (PEPs) fall in this category.

A credible identity verification service should;

  1. Ascertain the identity and location of the potential customer.  This will not only help to know your customer but it will give you an insight into their business. A combination of biometric verification and document verification is effective in achieving that.
  2. Give you clear and concise reporting. If you have to sift through layers upon layers of useless information before you get to what you were looking for, then you might reconsider your decision. 
  3. Alert you if there is a high-risk profile that might need EDD. Also, check if it has the capability of frequent or consistent monitoring.

An aspect that lies in the periphery is third parties that also need to go through CDD. Your business might have partners and collaborators, which have access to your resources. It makes perfect sense to vet them as well. See if your service takes care of ‘know your customer’s customer’ or KYCC.

The difference between KYC and KYCC is minimal. Only the subject changes in KYCC, it’s your customer’s customer under verification check. Verifying; identity, location, the nature of the business, etc. remain the standard. All of these ensure that your partners are not mixing their dirty money in your business.   

To Conclude

Most businesses find it not only convenient but feasible to hire the services of a credible provider regarding compliance. It surely is a steep climb in keeping up with the latest regulatory changes regarding compliance. But, you should do your due diligence on your potential verification service. Find out who their existing clients are. This is generally a good sign of competent service. Check out Shufti Pro’s client portfolio For ID Verification Services.

Kyc

KYC Compliance – Strengthening Fraud Prevention Across the Globe

Know Your Customer (KYC) : The widespread availability of the internet has made our world more connected than ever. This, however, has made our information more vulnerable to fraud. The ever-climbing fraud statistics continue to trouble consumers and businesses as well as regulators across the globe. Yet traditional practices for Know Your Customer seem no longer effective. With the increasing scrutiny of regulatory bodies and global financial regulators, businesses need to come up with an effective Know Your Customer or KYC Compliance process. The KYC process involves the verification of the identity of individual customers for preventing fraud and money laundering activities.

Traditionally, banks and other businesses performed KYC manually. However, manual procedures take longer and tend to frustrate customers. For banks too, manually verifying and vetting each customer can be costly and arduous. Herein, comes the role of SaaS KYC service providers. Providers of identity verification as a service, nowadays are using machine learning, advanced biometrics and a combination of Artificial and Human Intelligence capabilities to verify end users. It is an all in one solution that is equipped to fully automate KYC procedures in companies. 

A comprehensive KYC and AML solution can effectively fulfil a business’s KYC requirements. It not only makes the implementation of compliance obligations seamless but can also improve the onboarding process. Its KYC services include document, face and address verification along with global AML background checks. 

Some of the major KYC and AML procedures that Shufti Pro offers include;

  • Document Verification
  • Face Verification
  • Address Verification
  • AML Background Checks

Document Verification

A simple and efficient way for banks, financial institutions, e-commerce stores, crypto exchanges, ICOs and a number of other businesses is to verify customers through document verification. It allows businesses to verify users through multiple documents including ID cards, passports, driver’s license, credit/debit card, utility bills and other customised documents, that a business may need verification for, for its users. 

The verification of the document(s) can be personalised for business, according to its need to verify its users. For example, an online retailer would want to verify the address of its customers to avoid shipping fraud and errors. Different features of a document that can be verified include Name, Date of Birth, Age, Date of Issue and Expiration, Document Number (MRZ code, passport number etc.), Gender, Nationality etc.

The process of document verification for a business is simple and easy. All they have to do is select the mode of verification (onsite or offsite) and document checks they want. The rest is taken care of by the verification software. The process of document verification involves;

  • The end-user or customer comes in for verification and selects the type of document he/she wants to be verified by. It is up to the company to provide multiple options for its customers for verification including ID card, passport driver’s licence or any other ID document.
  • The user then scans their document(s) or uploads a copy of it to verify their identity. 
  • The system verifies the user using hybrid AI and HI technology in 30-60 seconds.

Document Verification

Face Verification

Face verification nowadays is normally performed through a facial recognition software developed on AI-based protocols. Biometric facial authentication is usually performed by businesses that run a higher risk of attracting fraud and financial crimes like money laundering, bribery and tax evasion. This may include but is not limited to, banks, insurance providers, investment firms, crypto exchanges, ICOs and forex companies. All such businesses are highly regulated and require additional protection from fraudsters and criminals. 

Performing facial verification is simpler than document verification and only requires the end user to show their face in front of the web camera. Alternatively, they can also upload a picture to authenticate their identity. The choice to verify the user through image or video or both lies with the company availing KYC services. An end user is verified in the following way in the face verification feature;

  • The end user comes in for facial verification
  • They show a fake or photoshopped image for verification
  • The facial recognition system declines the verification since it a fake image is being used for verification.

In another case,

  • The end user comes in for verification
  • He/She will show their actual face or image for verification
  • The verification is approved as the software detects the presence of a real person, or does not detect any photoshopped elements in the image used for verification.

Online Facial Verification

Address Verification

E-commerce sites, online retail businesses and banks often require address verification of customers in order to check if the person is using legitimate credentials to gain access to services. Address verification services allow for better and more convenient authentication of users around the globe. It is the fundamental solution for businesses to eliminate identity theft. Address verification further increases the accuracy in the shipping of orders allows companies to conveniently deliver merchandise to customers. 

Address verification is performed using a number of different documents including utility bills, bank statements, tax bills, ID cards, passports etc. The system is also able to corroborate addresses using different documents. Therefore, if either of the documents is forged or stolen, the system will stop the verification. The address verification process is performed in the following way;

  • The user selects the document using which he/she wants to verify their address. It is up to the company if they want to provide their customers or users with various document options with which they want to verify their address.
  • Scan or upload the document for address verification.
  • The system will use data extraction protocols to verify the address of the user.

Address Verification

AML Screening

Banking and financial institutions are required to perform customer due diligence (CDD) for individual customers and clients. For higher-risk individuals, they are obligated to perform enhanced due diligence (EDD) to evaluate, assess and eliminate the risk they pose to the institution. For more efficient risk assessment, AML screening of each individual client is a must. 

With an AML screening system, banks can now easily screen new and existing clients through a foolproof system. The screening process flags PEPs and high-risk individuals from a vast databank. It contains data from over 1000 sanction lists and 3000+ databases. Some of the lists through which end users are scanned include OFAC, FATF, DFAT Australia, FinCEN, CIA, FINMA and numerous others. The databank is updated every 14 minutes to account for any updates in the lists. Banks and other financial institutions can choose to implement batch screening or ongoing screening for their clients. Batch screening screens individuals in bulk in one request whose basic name and DOB are already known. In ongoing screening businesses operating in a high-risk environment can issue an “on-alert” status to clients with a greater risk profile. 

AML services are generally availed with KYC verifications and checks are run in the background. 

  • The system extracts a user’s Name and DOB from their credentials as they perform their identity checks.
  • The system will scan the person from global AML watchlists (FATF, OFAC, Terrorist Financing, FinCEN, DFAT etc.)
  • If the individual is flagged in any list their verification will be declined and the company will be notified of specific individual’s flagged status.
  • If they are cleared, their verification is approved.

AML Screening

Requirements for Each KYC Procedure

The documents required from each end user for a KYC verification depends on the company availing the KYC services. Each company has its own requirements about verification of its users. However, certain standard documents are used by most businesses to verify their users. These documents include ID cards, passports, driver’s licences and credit/debit cards. The company can choose to provide different options for verification for its users or set a standard document through which the person can be verified. 

Documents for address verification include, but are not limited to, utility bills, bank statements, tax bills, rent agreement, employer letter, insurance agreement and other standard ID documents. The AML checks require the full name and date of birth of an individual that can be extracted – or entered – during the KYC process. 

It must be noted that the requirement for each verification is set by the company availing the identity verification services. They may ask for only one or multiple documents for verification from each user according to the needs of their industry and the regulations they are obligated to adhere to. 

Industries that Adhere to KYC Compliance

KYC compliance applies to a vast range of industries. Different businesses need to adhere to KYC requirements of their region as well as the region(s) they operate in. Some of the many industries and businesses that require KYC procedures include, but are not limited to;

Kyc Compliance

  • Banking, Financial Services and Insurance (BFSI) Industry
  • E-commerce businesses
  • Foreign Exchange Brokering Services
  • Cryptocurrency Exchanges or Companies dealing with or operating on cryptocurrency (ICOs, Bitcoin wallets etc.)
  • Freelancing platforms
  • Telecommunication Services
  • Travel and Hospitality Services
  • Peer-to-Peer Marketing
  • Online Gaming and Gambling 
  • Healthcare Industry
  • Real Estate Sector

Standard KYC Compliance Procedures Around the Globe

Every jurisdiction around the globe has its own set of regulations and requirements for businesses to operate safely. Different countries and regulatory authorities set their own standards according to their legislative structure. However, standard KYC requirements are fixed for most regions across the world. Most KYC Compliance Procedures are centred around: 

  • Digital Identity Verification.
  • Electronic identity Verification or e-IDV, that verifies individuals through different government or independent databases.
  • Address verification through different documents

Any specific distinction in the process of KYC exists based on;

  1. Use case – The use case for each business involves in what capacity a business might need KYC, how it would apply KYC procedures.
  2. Regulatory Requirements – regulatory requirements differ based on the type of industry, the level of risk an individual or business may pose and the region in which an enterprise operates in. For example, in a few countries including Germany, Spain, Switzerland and Austria the regulations require businesses to verify users through video conferencing 
  3. Type of Business – the risk associated with a business also comes with the industry it operates in and its nature. For instance, financial service firms are bound by more legal obligations than perhaps an online retail store.

Kyc Procedures

The identity solution from Shufti Pro offers universal language support, along with the ability to verify over 3000 documents. This allows us to verify users from over 230 countries around the world. Our AML databank includes names of Politically Exposed Persons (PEPs) from over 1000 + sanction lists and 3000 + databases. It is currently catering to a diverse set of clientele ranging from financial services to online retail businesses to crypto companies. With the ability to verify users in under a minute, Shufti Pro can fulfil a business’s KYC compliance requirements with increased efficiency.

Identity Theft Protection

10 Quick Tips Regarding Identity Theft Protection

Identity fraud has grown substantially in the past two decades, and unfortunately, it is here to stay. Here we share 10 quick tips about identity protection so that you’d have the necessary knowledge when choosing among the best identity theft protection services. 

The number of people hit by identity theft each year is staggering. In the US alone, this number reached over 16 million in 2017. The stats from the rest of the world are similar. Hence, the rising demand for identity theft services.  

These services monitor personal information on websites, public records, and other credit applications to look for suspicious activity. Click here for a basic intro by the consumer financial protection bureau. The major service providers, besides providing protection against identity theft, offer insurance for the following;

  • Specific out-of-pocket losses
  • Chat room monitoring
  • Public record searches
  • Monitoring black market websites
  • Anti-virus software

10 quick tips about identity verification services

  1. Identity theft protection services basically offer monitory and recovery services. Monitoring keeps an eye out for thieves looking to steal your identity, while recovery service helps to deal with the aftermath.
  2. There are two main types of monitoring services; credit monitoring and identity monitoring
  3. Depending upon your choice, credit monitoring can track your credit reports at different credit bureaus
  4. Credit monitoring services might alert you when;
    • a firm examines your credit account
    • a new credit card account is opened under your name
    • a creditor or debt collector says your payment is late
    • You file for bankruptcy
    • There is a legal judgment against you
    • Credit limit changes
    • There are changes in personal information (name, address, phone number etc.)
  5. Your monitoring service will only alert you when something suspicious shows up on your credit report. If an identity thief steals your social security number or files a tax return in your name, your theft protection service will not inform you.
  6. Identity monitoring services inform you when there are unusual requests regarding your identity. For instance, a request for a change in address.
  7. Identity recovery services help you after the theft. Normally, the trained counselors and case managers help you in recovering your name and finances.
  8. Major identity theft services offer insurance as well. Normally, they only cover out of pocket expenses, for example, in reclaiming your identity.
  9. Putting a security freeze on your credit report will prevent the thief from opening any more accounts in your name. You can unfreeze it free of cost by credit reporting companies – Experian, TransUnion, and Equifax (in the U.S.).
  10. If you suspect that someone has stolen your identity, you can put a fraud alert on your credit report. This will not freeze your account but the new lender will take extra measures to verify your identity. 

Credit monitoring products from credit bureaus generally do not provide robust coverage. They might also reduce your rights to sue them. You should seek identity verification services that give you the best cover. The most comprehensive theft protection service is Shufti Pro. It provides the protection using state of the art artificial intelligence and machine learning algorithms, for a fast and accurate theft protection system.

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