The Urgency for Know Your Customer’s Customer (KYCC) in Businesses

It is not just the financial services sector that is required to comply with anti money laundering regulations. Businesses too are now required to implement certain regulatory measures to curb money laundering. A term that has recently been coined for such requirements is Know Your Customer’s Customer or KYCC. With increasing rules and regulations now being put forth by global regulatory authorities, banks and other businesses will now need to implement sound measures for KYCC.

Let’s get some background as to why knowing your customer’s customer is important. Entities like dummy or shell corporations are used for a number of purposes. Those motives need not be illegal every time; they can also be used to limit the liability of a company or for privacy purposes. But under a common perception, they are used for illicit purposes like money laundering, embezzling or tax evasion. This is due to the fact that shell corporations tend to have lesser legal compliance requirements.

As regulatory bodies like FATF or FINMA tighten the laws to combat money laundering, the leniency afforded to shell corporations diminishes. Heavy fines and penalties are being set for corporations and financial institutes all over to implement strong compliance procedures. There is an added pressure to implement a robust process of AML around the world. KYCC also falls under such rules and regulations.

Laws in most countries now require businesses to properly identify their customers. Moreover, they also require that a bank must make sure that their customer’s activities are legitimate and do not have any risk for money laundering associated with them.

How does KYCC help in Achieving Compliance Regulations

The complexity of financial transactions and the increasing advancement in technology make the whole process of maintaining and monitoring the financial system a challenging task. Keeping a track of one’s customer’s alone can be an onerous task on its own. Add to it the responsibility to monitor your customer’s customers, and your workload just got unimaginably tedious and complicated. However, the risk of letting your business fall into the pit of money laundering or other financial crimes is an even worse fate. The global financial regulators are no longer willing to let corruption and tax evasion fester. This makes it inevitable for the financial services sector to implement faster digital verification systems to speed up the process.

KYCC enables businesses to achieve an added level of security for their compliance measures. It allows banks to assess whether their customer’s customer is legitimate and every stakeholder in their business has genuine practices. As every country strengthens its laws on money laundering, it is becoming a necessity for banks and other companies to establish the lawfulness of their customer’s customer’s activities.

Moreover, obeying compliance requirements is not the only plus point of KYCC know your customer’s customer. It also allows a financial institute to manage its external risk and to build proper protection against money laundering and other illicit activities. Not building such compliance measures can have serious and dire consequences for a business. Noncompliance and detection of fraud or financial crimes in a company’s activities can involve heavy fines, sanctions and not to mention the loss of perfectly good credit to the business’s name.

Implementing KYCC Measures in Your Business

The first step in doing so is to implement a customer identification process. An effective customer identification program can enable the bank or corporation to make sure their clients have an authentic identity. This can be done through online identity verification. IDV allows banks to verify their client’s customers in a seamless and fast manner.

Most banks do not want their identification procedures to be long. Nor do they want to process and monitor large amounts of data. For this very reason, a lot of KYC service providers are rendering electronic identity verifications and AML checks for businesses including banks and financial institutes.

ID verification of customers is performed through document verifications, that allows them to digitally scan their documents for corroboration of their details. KYC verification service providers like Shufti Pro have a document verification service that scans a user’s documents, and the details within it, in seconds. This is performed through OCR or Optical Character Recognition.

Business verification has never been easier and efficient. Through digital identity verification solutions, banks can now establish the best methods to fulfil compliance and regulation procedures. Before now, companies have relied on manual or outdated verification procedures, that are painfully slow and cumbersome.

Shufti Pro’s KYCC services are top of the line that makes business verification easier for banks and other companies. Its customer identification process is fast and easily integrated into any given organization’s interface. Additionally, Shufti Pro also provides AML background checks as well that can screen a person’s name against global watchlists. This can allow companies to keep a track of not only their customer’s but their customer’s customer’s financial status.

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4 Ways in which KYC for STO can Revolutionise the Crypto World

The year 2019 is expected to see a significant rise in STOs and have been called the future of blockchain investments. Know Your Customer or KYC for STO is considered to be a major part in shaping their future. The regulatory requirements imposed on STOs for being declared securities by the Securities and Exchange Commission makes them a lot safer to invest in.

ICOs dominated the crypto investment arena in the year 2017, raising over six billion dollars for startups and projects. The glorious bubble, however, burst almost too soon as it became known that nearly 80 per cent of those ICOs were a scam. The primary reason for that to happen was the fact that ICOs do not have any of the real value that is associated with actual securities.

STO over ICO?

Comparatively, a rather new blockchain instrument that emerged in 2018 is an STO. They offer the same benefits that a normal stock or bond offering does, including profit sharing and voting rights. They are essentially a real-world asset for an investor much like any other security offered by any company. Unlike an ICO which is only a digital token that can be used to buy other digital assets or can be liquidated at a crypto exchange. They are much less regulated than an STO and offer much less security on the part of the company or project offering them.

Read: KYC Services For ICOs : Why you need to have them now?

Ever since the SEC’s increased regulations on cryptocurrencies, the blockchain industry has churned up a more legitimate way for people to invest digitally in the form of security tokens. Since an STO has to be registered with the SEC, the company offering it has to fulfil all their regulatory requirements. By design, KYC solutions are a major part of those requirements and can potentially revolutionise the way STOs would be traded in the crypto world.

What is KYC for STOs?

Know Your Customer or KYC verifications are a simple and easy solution for any company initiating an STO to vet its investors. Primarily they are provided by a KYC service provider like Shufti Pro that provides digital verification procedures to check if any given user or investor has fraudulent credentials. KYC verifications are performed in the form of document verification, facial recognition and AML (anti-money laundering) checks.

AML compliance primarily checks if your investors are vulnerable financially or are involved – or known to be involved – in any money laundering activities. Shufti Pro as a KYC solution provider thereby checks an investor’s name against nearly 3000 watchlists issued by global regulatory authorities. These authorities include FATF, FinTRAC, FINMA and OFAC.

How KYC for STOs can be a Revolution

  • Protection from Fraud

Since their initiation, ICOs have been notorious for being fraught with fraudulent offerings. More than 80 per cent ICOs were known to be fake according to some studies. The KYC verification process required for STOs eliminates this threat entirely. The sole purpose of a KYC check is to check for any fraudulent investors and weed out any threats of identity theft.


  • Improve Reputation

By complying to KYC and AML regulations STOs can adhere to the regulatory requirements that many regulatory authorities have been urging the crypto sector to conform to. This gives cryptocurrency an opportunity to regain its confidence with both the investors as well as sceptical state bodies. Compliance with KYC requirements for STOs shows a strong commitment on part of the crypto industry to try and come to par with normal security offerings. It also allows them to enter the market for securities as a legitimate deal.

  • Boost Investor Confidence

The chance of fraud in ICOs made investors think twice about investing any sort of digital tokens. With security tokens being recognised by the SEC as a legitimate security offering, cryptos can now attract investors safely. As digital currencies are an innovative way to drum up investments for startups and projects, people are eager to invest if given the proper assurance for the security of their investments. When they see an STO adhering to KYC regulations and AML compliance measures they can be assured that their money is safe from any kind of fraud.

  • Develop a Smooth Investment Process

Tokens or securities offerings, be it an IPO, ICO or an STO are charged with glitches and last-minute errors. KYC solutions can help ensure a smooth process for STOs that has less of a chance to attract fraudulent or financially vulnerable investors. This can reduce the chance of any irregularities in the process of initiating an STO.

Shufti Pro has emerged in the industry of KYC as a service provider that dispenses top of the line KYC services to a vast array of industries including STOs. It also provides the best AML compliance checks for a company’s users and investors, thus ensuring the best fraud prevention services for its clients.

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4 Know Your Customer (KYC) Strategies to adopt in 2019

Digital fraud haunted the cyberspace in 2018 with the majority of online frauds originating from either new accounts created through stolen identities (32%) or through account takeover of existing user accounts (23%). This created a nuisance for online businesses as customers cried foul and lashed out on digital companies for their lax security measures that failed to ensure the true identity of incoming users. With payment fraud recorded at 27%, online businesses were not also particularly secure from digital frauds eating into their cyber revenues. Identity verification services and KYC authentication seemed to be the logical answer to fight online frauds but online businesses were skeptical about the utlity of such services.

But surely after an ever-increasing barrage of digital fraud incidents, companies using digital channels to attract larger clientele will start taking KYC services much more seriously in 2019. Here are the 4 Know your customer strategies that must be at the forefront of digital fraud prevention for every business that wants to fend off fraudsters.

1.Hybrid KYC Options

It is highly important that instead of just opting for only one form of KYC solution, online businesses integrate various identity verification services to make sure that only authentic users are able to pass through know your customer process. Adapting to new verification standards is never hard for online fraudsters and scammers. Synthetic ID documents are the living proof of this fact. So the businesses that want to not lose any more revenue to users with fake credentials must move forward from simple document verification and the need for authentic ID cards for new customers.

Choose a KYC solution provider that supports a hybrid verification approach. For example, an ideal KYC service should not only perform biometric verification with the help of Facial recognition software but must also cross-check the unique facial features of a verifying person with the image present on the identity document, after checking the authenticity of the identity document. This approach will virtually make it impossible for an identity thief or synthetic identity holder to register ever again for a service provided by any business.

2. Swift Processing of KYC requests

Identity verification services are surely an effective way to prevent online frauds and thwart attempts to register with synthetic identities but it should not become a headache for authentic users. They should not be made victims for the vigilance against account takeover practices. Any Know your customer verification that takes more than a few minutes is a counter-productive and can make an online business lose customers as well. So any company that wants to integrate a reliable user Identification service, must make sure that the processing time for each verification request must be limited to a few minutes and should not exceed more than 5 minutes, regardless of the fact that which verification is being used to identify incoming clients.

Performing time-consuming user verification on the cost of loyal customers can never turn out to be a beneficial business practice, no matter how top of the line service a business promises to provide.

3. Collect Unique Consent from Users

Most of 2018 saw a tug of war between the online businesses and their consumers, where several instances were reported of customers complaining to never have used service but the support department telling them it was their exact credentials that were used to access and pay for the services. Cashback requests were mostly denied with customer trust being breached on several occasions.

Read: Benefits of KYC services for Money Services Operators

Online businesses can turn the wave in 2019 by collecting a verified consent from their customers. It can be in the form of some customized text or the customer showing their face along with their credit/debit cards. Phone verification or address verification are also viable options to collect consent from potential customers.

4. Try Handwritten Note Verification

Handwritten Note verification can serve as the ultimate form of KYC verification in 2019 with online businesses asking any kind of text to be written by a verifying user and send its picture for identity verification. It can either be a random code, the date and time at the time of verification, name of verifying customer with their date of birth or may be the address of end-user for sending items that they have just ordered on an online shopping website. Surely, the sky is the limit with the customization offered by a handwritten note as a source of unique identity verification service. As mentioned in the first point, online businesses can even use a handwritten note in conjunction with the face recognition service or authentic identity document for verifying the identity of an incoming user.

Handwritten note verificationAny business that wants to adopt any or all of the above 4 Know your customer strategies will fine Shufti Pro as a perfect tool to fight online scams, synthetic identities and identity frauds in 2019. It is an AI-based SaaS product using machine learning, liveness detection and OCR technology to authenticate the true identity of cyber users. Available in 230 countries of the world and with support for 150 languages, Shufti Pro is an ideal KYC service provider on a global scale.

Shufti Pro offers 15 days free trial of its services for all its customers that want to check the real-time verification results provided by this state of the art user verification service. So if you want to adopt a highly scalable and customizable identity verification service to reduce the risk of registering users with fake identities, then Shufti Pro is the right choice for your online business.


Protect For Charity Against Fraud

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 happen to legit charity organisations are the perfect example. It is hard to believe that scammers would do such a thing, but sadly it does happen. As is with most charity organisations they don’t think that someone would do such a thing with them, but the truth is far from it. Besides the threat of fraud, charities also need to be aware of individuals or companies that might use the platform of the charity organisation to launder money. In this article we will look at the warning signs that charities need to be aware of and what role Know Your Customer Verification (KYC) can play in protecting these organisations from fraud. We will also look at how charity organisations can prove themselves credible. Fraud prevention is not just limited to charity organisations as the opposite is also a concern, where the hard earned money of good people is swindled by fake charities. We will see how  the process of identity verification can add to the credibility of a charity.

So How Do Donors Cheat a Charity Organisation?

There are two main ways that charity organisations are cheated by fraudulent donors. Although there are other ways as well. Also fraudsters are always concocting a new way cheat people an organisations. The first one involves the use of a fraudulent check. In it a donor reaches out to a charity organisation and shows their willingness to donate a large sum of money. After the initial contact the donor mails in the check for the large amount. After a very short time, the donor contacts the charity requesting a full or partial refund of the donated amount. The reason that is given is usually a very severe or emotional one, such as expense for a sick person or other emergency case. If the charity in concern refunds the amount before the bank gets back to them regarding the fake check, the charity is at loss. They will also be responsible for any bank related fees and charges.

The second way fraud is done against charities is through the use of credit cards. A donor approaches a charity organisation and requests to donate a large sum of money but with a condition. The condition being that a percentage of the amount will be donated to another foreign charity organisation. The foreign bank account of this charity organisation is actually the account of the donor. If the charity accepts the condition then they going to lose a lot. As in this case, the credit card used to make the transaction is usually stolen. The charity will solely be responsible for any chargebacks and it will have unintentionally partaken in a money laundering scheme.

Money is a powerful motivational factor and seeing a lucrative amount charities like other organisations are tempted to accept weird conditions. If only a simple identity verification service had been used; it could have thwarted these attempts. We’ll elaborate how later in the article.

So What Should Charity Organisations Look out For?

  • Large one-off amounts or a number of smaller amounts that are donated and no source can be checked by the charity.
  • Conditions where the charity is required to do something such as transferring of a certain amount to another charity.
  • If the charity is asked to keep a large amount/donation for a specified time period. After the short period the amount is to be returned to the donar. Usually charities find the attraction of keeping any interest that is earned while they are in hold of the money.
  • If the donation being made is in a foreign currency and there are conditions attached with the donation that the original sum is to be returned to the donor in a different currency.
  • if the charity is asked to provide privileged services and benefits to the donor and or a person or organisation nominated by the donor.

So how do Know Your Customer and Other Identity Verification Services help fraud prevention for Charity Organisations?

As mentioned previously a simple identity verification can thwart most fraud attempts. The simple fact is that when all credentials are verified and a proof of identity is asked to confirm that the donor is actually who they say they are. Most fraudsters back off out of fear of being caught. This verification is an integral part of the Know Your Customer policy that financial institutions such as banks follow. Some charity organisations argue that the system is workable for walk-in donors and not for their online donation platform, hence, it is not an effective fraud prevention process. The truth is far from it; there are 3rd party platforms that allow for online verification. The software can easily be integrated with any existing system. Using the webcam or even the smartphone camera of the donor the system can verify the authenticity of documents that are used to prove identity. It includes face matching and checks for any tampering and forgery. If something negative is detected the charity will know about it immediately. At the heart of the system is an advance AI that carries out the checks and then the result is reverified by Human Intelligence, whereby people check for any false positives. The entire process takes less than a minute.

Great! But how does Identity Verification or Know Your Service add Credibility to a Charity Organisation?

Good question, as we discussed the opposite is also true that there are fake charities that swindle good people out of their money. In fact this type of fraud is also quite high, charities collect the money and then pull a disappearing act. They are never heard from again and the cause for which they collected is never addressed. So people are also look out for warning signs regarding charity scams.

One thing that is common with charity scams is that they really don’t care where the money is coming from. They just want the money without concern for the source and would not definitely think about investing money in a verification solution. When a charity comes along with a 3rd-party Know Your Customer service it immediately tells the donor that this charity is serious about their donors and the money they are getting. Plus the simple fact that a charity is spending from its pocket to ensure compliance with Know Your Customer rules and for fraud prevention shows that it is there for the long haul.

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KYC for customer on-boarding in Telecommunications Industry

Identity Verification is quite necessary for Telecommunications Industry in today’s digital space. How? Here’s the case:

Imagine this, you’re sleeping cozily in your bed on a weekend and suddenly the doorbell rings and not just once but several times with a sense of urgency. Along with it comes loud knocking, you rub your eyes and check the alarm clock, it’s 8am. You are thinking who could be at the door this early on a Sunday morning. Anyhow sensing the urgency, you get out of bed to answer the doorbell. Upon opening you find two men at the door who show their badge and request you to come along with them to the station. You ask what this is about and they say we need to talk to you about some life-threats that have been made by you to a person. You are shocked but anyhow you ask permission to wear proper clothes and you go with them to the station. There they playback the recording that supposedly you made to this person. You tell them this is not my voice. They say the number is yours and the device is registered under your name. You tell them that your wallet was stolen a couple of months ago you tell the officers that although you had deactivated all the credit cards that you had credentials in there that could allow someone to steal your identity. They check out your story and also do some voice tests that come out clear. They allow you to go home, but before that they tell you that you should check your online account with your cellular service provider. You do that and find that a device has been added to your account from the online sight and it has your details but the payment was made via some other card. You show it to the officers they say we’ll take care of the rest and will contact you if they require any further information. You reach home extremely exhausted and ticked off, what a bad day. You call your lawyer explain what happened and ask if you can sue your cellular network provider for not carrying out proper identity verification. He says he’ll get back to you with all the details on how to initiate and proceed with the case…

Why the Telecommunication Company is at Fault for not doing Identity Verification?

The scenario above is hypothetical but it is something that happens more often than not. If we look at it the lawsuit isn’t the only case the company is going to have to deal with. The credit card that was used to purchase the device and add it to the account was most probably stolen resulting in a chargeback by the original owner.  A possible lawsuit and chargeback not to mention the bad repute, multiple problems all because the telco did not have a digital KYC (Know Your Customer) solution.  In 2016 alone, the Telecommunication companies globally suffered a loss of $300 Billion. Although the majority of this fraud was not chargebacks or stolen credit cards, you would think the companies would apply secure processes to deter the use of such cards and avoid chargebacks due to other reasons as well. This would at least allow them to prevent a certain percentage of the loss. Yet sadly, this is 2018 and not many cellular network providers are opting for identity verification solutions.

In the case above, the emotional shock the person faced, could have been avoided had such a solution been implemented. If you look at it in this day and age, even when you have logged in or are using your email account, if you make some changes the website asks you to prove your identity by asking for a pre-saved personal question or for your password again. This is just for your email. Now if a company requires details that are needed for processing payments or where money is concerned why should the company be so lax about it and not implement secure processes to deter such fraud?

How can a Digital KYC Service Provider Ensure Secure Processes?

There are several ways that KYC can secure processes associated with online transactions. These KYC services use the power of the Internet, the webcam of the customer, or the camera of their smartphone to carry out online live verifications. With that they verify the authenticity of pictures and documents that act as proof of identity. From credit cards to passports a large variety of official documents can be checked for tampering or forgery. Live face matching with pictures in documents are also carried out.

These services rely on advance AI and HI to carry out the verifications. Once the AI gives a verdict on the validity of documents. Live people give a once over to check for false positives. So when a customer enters in a credit card number before it is processed the customer is asked to verify their identity via the digital KYC service provider. The customer is also informed that the process will take less than a minute. Most of the people intending to do fraud leave at this point since they know they will get caught. Hence, KYC service providers ensure a streamlined and secure process.

How can a Cellular Service Provider get an Identity Verification Service?

Telecommunication giants such as Verizon and T-mobile offer multiple online services to their customers. This could be the option to buy packages as well as devices and to register for a connection. For a provider that handles the payment information of customers, a digital KYC solution is essential. There are many third party online verification service providers that offer an array of KYC services at a competitive price. Their identity verification solution is such that it can be integrated with 99% of today’s upcoming softwares and technology.

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DueBooks® integrates Shufti Pro® for Business Verification Services


Improved KYC protocols, superior ID verification services and reduced on-boarding time compels the new entrant into the startup world to adopt Shufti Pro® for protection in the highly vulnerable cyberspace

BATH, United Kingdom – October 2017 – Shufti Pro®, one of the rapidly growing online identity verification Software as a Service (SaaS), has made public that after the huge success of EPP System’s® implementation of their services, now DueBooks® has decided to follow in their lead and embrace Shufti Pro’s® real-time ID verification technology for a simple, secure and fast paced on-boarding process.

A month ago, DueBooks® employed Shufti Pro®’s services to act as a security screen and help them verify customers’ identities. During this time, a sizeable number of potential consumers were verified and the results from the company’s survey show 90% reduced on-boarding time due to digital KYC compliance. The results go on show that numerous dubious customers were rightly stamped out during the screening process, preventing considerable potential losses to the startup.

CEO, DueBooks® said:

“For a novice company like ours, digital identity verification services from Shufti Pro® have proved their worth by increasing our fraud-free client base, enhancing our on-boarding process and developing a trust between us and our customers. With a boost in sales, and the amplified quality of our services, DueBooks® has been able to form strong foundational basis, and looks forward to quite a bright future.”

Shufti Pro® works with some of the most promising emerging start-ups, businesses and enterprises, helping them quickly and accurately uphold the Know Your Customer compliance . For every business, regardless of their level, Shufti Pro® believes that fraud prevention must be the foremost concern. They make this come to life through the use of artificial and human intelligence. Checking the authenticity of their customers has proved to be of immense importance for DueBooks® due to Shufti Pro’s® 99% accurate results, cost & time effectiveness and appropriate confidentiality and security measures.

Secure identity verification services have streamlined DueBooks’® digital HR and cost-accounting system through substantiating their clients as well as their employees using their legal credentials and performing ID checks on them. DueBooks® is rapidly covering milestones towards becoming an established business by performing efficient team & project management, attendance reports formation, invoice/expenses/salary administration, etc. for themselves as well as other companies. The manual resources previously consumed during these errands are now put to a better use of building up their business using Shufti Pro’s online fraud prevention tools.

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DueBooks® can be used by many different companies, who can use it to validate their customers/employees as well. The swiftly progressing startup can now work on their business rather than in their business. The latter chore has been taken up by Shufti Pro® and both have joined hands for a fruitful collaboration for online fraud prevention and digital KYC purposes.