There is a dire need to have a sound identity verification tool for businesses as the scams and frauds are gaining ground in every sector. Identity verification solutions that use biometric authentication systems, document verification, age checks, 2Factor Authentication can be used to identify and fight back fraudsters. Risk of many frauds like identity theft, account takeover, money laundering, fake identities can be decreased by using these solutions. Identity verification is crucial for businesses globally. So businesses need to have a sound identity proofing system integrated into their system. These solutions provide a win-win situation both for customers by providing them security and business as it removes the risk of providing a platform to fraudsters. Financial criminals are becoming more sophisticated over the time their game is getting strong so identity verification solution is a must-have.
Reasons Why Identity Verification Solutions are Needed:
There are plenty of reasons why a business needs identity verification solutions following are the factors of increasing identity verification solution market:
More stringent regulations
More stringent laws are coming up by regulatory authorities for KYC and AML compliance. To control increasing the increasing ratio of crime which is disastrous for financial institutes, global authorities are always in a bid to fight back these scams. The AML screening by FATF implemented in member countries is parallel to those implemented on financial institutions. It is mandatory for all kinds of businesses to adhere to KYC and AML checks in order to fulfill these mandatory requirements. The EU Fifth AML detective is also here. These checks are essential to combat terrorist financing.
FATF’s ID systems guide
FATF is a global regulatory authority gives recommendations about AML and CFT (Counter Financing of Terrorism) to the member countries. FATF requested recommendations from stakeholders such as government bodies, consumers, identity verification companies, etc on the first draft of the digital ID systems guide given in 2019. Businesses offering better services will gain more customer trust and value.
Increased Fraud Ratio
Majority of businesses these days have been victims of fraud and economic crimes. So all the businesses are looking for solutions to mitigate financial losses due to an alarming increase in cybercrime and financial crime. This concern can be addressed by performing rigorous customer due diligence on the stakeholders of the business entities. This leads to more dependency on KYC and AML solutions. So businesses are widely adopting it thus leading to the global growth of the identity verification industry.
Money Laundering and terrorist financing a two-edged sword
The global disasters of economies are frauds like money laundering terrorist financing. Except for government loss, the businesses exploited for a smooth transfer of money are also used for this purpose. This is why businesses are investing more in compliance and technical solutions for AML screening of their prospects.
Increasing identity theft is the tip of an iceberg
Identity theft is the beginning of an array of consecutive crimes conducted with these stolen identities. These stolen identities are used for various types of frauds such as money laundering, identity theft,etc. The majority of the stolen identity is used to defraud businesses and financial institutions.
Wrapping it up, businesses need to abide by the regulations to fulfill the identity verification checks. The identity verification solutions provide a win-win situation to both businesses and the clients by securing businesses from fraudsters and authenticating clients in real-time. Unlike manual identity verification which is time consuming and a lot of errors are expected in it. Digital ID verification is quick and accurate.