In the contemporary digital world, identity fraud is a challenging issue to tackle for companies. Insurance Information Institute (III) claims that there are roughly 14 million identity theft victims.
In addition, the number of fraudulent dealings and data privacy violations has increased along with the advancement in online transactions throughout and after the epidemic. Only using KYC documents in this situation can assist businesses in overcoming the aforementioned difficulties. Moreover, firms can ensure compliance with KYC and AML regulations.
KYC Documents – A Brief Overview
During account opening or performing monetary transactions, staff members request the clients to present their government-issued documents, such as driving licenses or other papers. The verifier confirms details on the provided documents and matches them with identity documentation. Moreover, it ensures that only genuine consumers enter the business.
It is necessary as artificial intelligence services can replace verification officials. Moreover, this allows industries to empower firms and perform ID validation remotely with online documentation. In this approach, only legitimate customers will be allowed to conduct financial transactions, and no malicious party can use complex methods to exploit the business. Businesses must choose the most cutting-edge digital solutions as technological innovation grows to effectively deter forged documents and identity theft. In this context, the significance of executing KYC compliance is evident.
According to Markets and Market research, the KYC authentication market size will be nearly 20 billion dollars by 2026, showing a CAGR of more than 15% from 2021-2026.
As per the analysis, the key industry drivers behind the development of the identity verification market are:
- Boosting Digitization
- Advancing Smart Infrastructure
In the digital era, enterprises are benefiting from technological innovation, however, fraudsters have also utilized intelligent solutions for their malicious goals. The application of KYC documents enables industries to deter anonymous attacks and simplify the onboarding methodology.
Top 5 Document Fabrication Strategies Used By Fraudsters
The following are five famous techniques criminals employ to manipulate the corporate world.
Illegitimate documentation is a phony record with no holograms, rainbow patterns, and micro imprints. Such features are present in actual documentation from government offices.
False records are not exploited or faked, instead, offenders steal them to hack record verification systems. Only the incorporation of KYC checks can help businesses discourage false or bogus papers and scams effectively.
Fraudsters exploit authentic records to bypass defense mechanisms. Criminals create different modified documents so meticulously that the human eye won’t be able to catch the manipulation. This is where only the KYC documents application helps corporations identify scams in papers effectively.
Fraudsters enter fake details on camouflage records. The identities of issuing authorities that have never existed and are not authorized to issue records are mostly filled in by criminals. It is one of the basic scams that bypass old-fashioned security protocols. However, the incorporation of KYC documents can help in deterring scam attempts.
Blank Stolen Records
Authentic document forms are typically blank, and by inserting false information, fraudsters expose private information from the manufacturing supply chain.
Famous Benefits of Using AI-Driven KYC Checks
The following are common advantages of utilizing cutting-edge digital technologies to deter fraudsters’ scam attempts.
Providing Speed and Convenience to Customers
Consumers place a high value on speed and convenience to get a class-leading customer experience. Before automation, manual processes were slow and onerous, which caused customers to switch between businesses.
Businesses can use KYC verification to confirm the identities of new clients by working with third-party vendors. Experts can onboard genuine clients by evaluating photographs of actual records in real time using government-issued documents like passports and driving licenses.
Mitigating Risks and Attracting Genuine Customers
Identity verification becomes more crucial when a firm expands to deter crime and establish connections with reliable customers worldwide. According to a global fraud survey, weak security processes may cause customers to stop making use of the business’s perks and move on to one with superior experiences.
KYC authentication helps to mitigate business hazards, boost customer satisfaction and ensure AML/KYC adherence. This way, experts can lower blunders in the conclusive output and entice actual customers.
The incorporation of online KYC can help enterprises simplify their onboarding methodology. This way, businesses can analyze the confidential data of clients and confirm its authenticity. The ground-breaking digital technology also verifies information against international watchlists to deter high-risk companies from abusing the system.
Additionally, companies can work with other vendors to integrate KYC paperwork and guarantee a great client experience. By doing this, businesses may guarantee both competitive advantages and KYC/AML compliance.