Why Digital KYC is Important for Insurance Fraud Prevention

Why Digital KYC is Important for Insurance Fraud Prevention

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KYC For Insurance Companies : Basically, a system that can carry out real-time identity verification, background checks, and detect possible forgeries in documents. Such systems exist in the form of digital KYC service providers.

Insurance fraud is a stark reality and many people who commit such frauds do not realise that their actions result in higher premium rates that have to be paid by other people. On average, insurance companies lose around $30 Billion a year due to fraud. The costs of these frauds are borne by honest, hard-working people. There is an urgent need for fraud prevention systems in the insurance industry. Although, there are insurance investigators that work in high-profile cases and also the cost of carrying out an investigation is borne by the good honest people. 

Moreover, it is the smaller cases that cause the most harm as they are ignored and add up to become a hefty amount. Although background checks are usually done in the insurance industry and they should be, as they can help point out money launderers, if not the fraudsters. The reason is that most people who carry out insurance fraud rely on fake or stolen identities to carry out their scams. Secure processes that are fraud-proof is the need of the hour. as we proceed with the article we will discuss how KYC services providers can assist the insurance industry. We will also discuss the things to look for when searching for such a service provider.

Frauds That can be Stopped Through Secure Processes : KYC For Insurance 

Although there are many types of frauds that happen with insurance companies, yet there are some that can be easily avoided by applying secure processes.

Fronting: In this type of fraud the insurance policy is taken out using the details of another person to get favourable terms such as lower rates on premiums. Criminals or fraudsters usually rely on this method to carry out their fraudulent activities. They use fake or stolen identities to present themselves as someone else and create fake documents to support their taken identity. KYC service providers can easily weed out such attempts and prevent them from happening.

Money Laundering: is a global problem. Insurance companies too are frequently targeted to launder money. The products offered by insurance companies and the processes that are associated with them make it easy for money laundering. Life insurance policies are extremely lucrative to money launderers as they allow for large premium deposits. Money Launderers take out such policies and deposit large amounts of money while cancelling the policies after a while. They do suffer some loss but the amount they receive back is effectively laundered. KYC service providers that allow for background checks can help curtail these types of frauds.

How Digital KYC Services Ensure Fraud Prevention

Digital KYC service providers rely on state-of-the-art AI to carry out multiple checks. The software that can be integrated with all known systems. It uses the Internet, a webcam or a smartphone camera to carry out its verifications and background checks.

In the case of fronting, this would prove an invaluable tool. The process of verifying a person for a policy would include;

  • The person wishing to acquire a certain policy would fill out the required information and after submitting it would be redirected by the verification system. 
  • The person is asked to present proof of identity documents in front of the camera and to focus one by one on the required verification parameter such as name, DOB, address, etc. 
  • The AI checks the documents for signs of tampering or forgery. The picture is matched with the face of the person and the data is matched with the provided data that the customer submitted initially. The entire process is recorded and done in less than a minute.
  • There they would be asked to face their webcam or their smartphone selfie camera after getting a special link. 
  • The 

In the case of fraud prevention related to money laundering, the process would be the same. But if the company has opted for AML (Anti Money Laundering) screening checks then the AI would simultaneously check thousands of global watchlists for any sign of money laundering suspicion or prior conviction.

What to look for in a Good Digital KYC Services Provider?

Having mentioned the value of verification services it must be said that not all companies offering fraud prevention services are the same. Companies understand that customers do not like long waiting times or lengthy onboarding processes. This is why it is important that insurance providers take on a KYC service provider that is efficient as well as effective. 

Shufti Pro’s digital KYC solution implements advanced machine learning and AI systems to catch documentation fraud, identity theft and offers liveness detection. It offers a hybrid solution that includes a backup of human intelligence along with the AI that verifies the results from the AI for false positives. This lends more accuracy to the entire process and all this is done in seconds as well.

DueBooks® integrates Shufti Pro® for Business Verification Services

DueBooks® integrates Shufti Pro® for Business Verification Services

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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.

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.