It's a brave new world out there in cyberspace, where data breaches and phishing schemes are just some of the dangers you face. From fintech services to dating sites- even players on the sharing economy- organizations from every sector have been victims when it comes to digital scams like identity theft.
Financial services organizations have a clear incentive to verify their users' online identities, as this can lessen the chance of financial crimes and protect brand reputation. Know your customer (KYC) is an internationally recognized standard that ensures the financial safety of clients. It provides a way for institutions to verify customers' identities and weed out any potential problems before they arise by performing thorough due diligence on each person who wants access to your company or organization's funds.
Understanding KYC Processes and Compliance Requirements
KYC compliance starts when an account is created and continues throughout the course of business with that company. It's important because it ensures a business knows who its customers are, but there are other things to take into consideration as well, such as what information they need access to and how the business will get in touch with them if something goes wrong.
Customer Due Diligence: An Important Parameter
The due diligence process involves reviewing all aspects of a potential customer to ensure they will be safe and reliable. This includes checking their criminal records, financial stability and any other red flags that may come up during screening for risks before onboarding them into the company's system. Be sure to educate yourself on the KYC requirements in your state, as they differ depending on your locality.
Requirements
- Customer Information: It is essential for companies to always ensure they are dealing with real people. To do this, businesses collect the customer’s full name, photo identification card, driver's license number, e-mail address, residential address, tax identification number to authenticate themselves before completing any transactions online and other mediums.
- Business Information: This includes additional identifying information about the customer's business model, source of funds and beneficial ownership.
- Customer Risk Assessment: Customers who pose a high-risk level must go through an in-depth due diligence process. This includes identifying their source of funds and possible links to crime, while those with low risks can be vetted more briefly before meeting the customer on-site for verification purposes.
- Transaction Monitoring: Healthy organizations are proactive about monitoring their clients and constantly looking for red flags. They have clear processes to review all information on a customer, including financial transactions or accounts based on thresholds developed as part of that client's risk profile in order not to miss anything suspicious before it becomes serious enough so they can take action immediately when necessary.
Jumio's KYC solutions are a perfect fit for companies that want to ensure they're doing everything possible before accepting money from customers. We offer an end-to-end verification and authentication process, which ensures your clients trust in their transactions with you. To learn more, visit KYC (Know Your Customer): What it Means & Why It’s Important | Jumio
Security Options With a Cellular Device
The world is becoming more and more connected, and over half of the planet's population owns a mobile phone. Banks have begun to introduce mobile apps so people can manage their finances on the go, such as transferring money or checking balances from one account into another. With built-in cameras on most phones nowadays, users can scan passports using OCR software or take photos during video interviews that will later be stored digitally along with fingerprints too. With this technology, KYC has become easier than ever before.
Modern smartphones are allowing for even more potential in the KYC space:
- Biometrics Authentication: Biometrics authentication uses your body parts to verify that you are the genuine owner of an online account. This method includes face, fingerprint or iris scan and it improves security because even if anyone else accesses the phone they cannot log in without a signature from the biometric capture device.
- Voice Recognition: Voice unlock uses innovative technology to confirm your identity. You need first set voice in the cellular device, which can be used whenever you want to access apps or online accounts through this feature that verifies voices with ease and without the hassle of having passwords memorized.
- Knowledge-Based Authentication: It is a great way to keep your online accounts secure. If you sign up for an account using the cellular device, it will ask some security questions and their answers so that only those who really deserve access can have them.
- SMS-based two-factor authentication: Some banks are now using SMS-based two-factor authentication for identity verification. This method uses your phone number to confirm that you are who you say and when registering or logging in online they will ask it of you during account registration processes. Whenever accessing an app on their own device without a secured connection (Wi-Fi, for example), these apps have auto verifications that send the code automatically if one does not enter them themselves.
Protecting Yourself Against Identity Theft
Identity theft is a terrible and very serious crime. To ensure that you have the absolute highest level of data protection, learn more about what measures you can take to protect yourself from identity theft with KYC.