Wednesday, September 27, 2023
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KYC Service Providers to Trace Out Criminals-Corporate Industry Boom

With the rise in the widespread of the internet, criminal actions are also growing at a fast pace. Digitization is connecting the world and making it over-dependent on the internet for business growth. The large scale of data and information sharing is making the entire system more unguarded. The consumer market is more saturated today because of the hybrid economy structure and uneven control of data flow. 

Bloomberg reveals China’s biggest banking scam recently where China is due to pay 100,000 Yuan to the victim customers. The lack of fulfillment in KYC requirements compliance takes the fraud rate to this level. KYC is not only about knowing the basic details of the customer but it’s more about vetting each and every detail of the customer for reliable financial proceedings. 

What is the Significance of the KYC Security Check?

KYC is a frequently used term in the banking sector but now it is mandatory to implement in every financial sector for stable financing. KYC stands for Know Your Customer. It is about transactional details of the customer and his activities. A number of frauds are occurring in different sectors including banking, travel, tourism, recruitment, insurance, etc. The significance of KYC service providers is increased manifold when data fetching and data security are endangered by criminal attacks. Multiple security points are applied to verify customer biometrics. Human capabilities and artificial intelligence are working parallel to bring out the anticipated results. 

Role of Machine Learning in Enhanced Due Diligence 

Financial businesses are running the global economy. Undoubtedly, the financial sector is responsible for the rise and fall of global economic indicators. Customers are the pillar of the services sector. It goes without denying that data is the real power that is operating the whole global system. It is very important to not let any operation proceed without complete KYC implementation. The question arises of how to ensure accurately the KYC process. The top KYC service providers are moving toward automated procedures to detect and deter fraudsters. Customer due diligence is conducted in almost every financial institution but enhanced due diligence requires advanced AI programs to monitor customer financial activities.

There are a number of customers in various banking channels who are either politically exposed or facing multiple sanctions due to excessive use of discretionary powers for illicit gains. Machine learning is a widely used approach in banking, real estate, travel, and all other sectors to identify fault lines. So, Machine learning plays some role to contain scammers which are discussed below. 

Face Recognition Model 

Artificial Intelligence is rapidly taking over the financial world. KYC and AML are deeply connected for seamless financial services. Face recognition is the modern AI technique used for id card verification. Moreover, in case a forged ID card is provided, AI models are integrated into face recognition services to detect fraud using facial patterns and matching them against the original picture.

Audio & Finger Prints Recognition

Moreover, digitization has taken the next step forward. To ensure KYC compliance, voice audio and fingerprints of the customer are verified using artificial intelligence algorithms. Audio models verify the customer through the frequency and pitch of the voice. Furthermore, fingerprints are also verified using machine learning algorithms. So, These methods are used to know your client from KYB, KYI to KYT. 

Why Customer Enhanced Due Diligence Hooked to Money Laundering? 

Money laundering is an exponentially growing menace all over the world. Rapid technology eruption is resulting in a maximum scam rate. Customers with the intention of money laundering open bank account with forged documents and fake identity in some nominal bank to sail through the registration procedures easily. The weak KYC service providers often ignore know your customer checklist compliance procedures. Thus, fraudsters find space for prohibited actions and launder ill-gotten money to offshore accounts. Potential KYC service providers can curb financial crimes using robust compliance methods. So, the high-risk customers should be included in a special category of strict verification under advanced AI models. 

Basic Guidelines of KYC Requirements

The global KYC service providers are convinced of some regulations to meet the KYC requirements. The basic KYC requirements are as follows. KYC service providers ensure the validity of customer ID cards, photo verification, video verification, content verification, business documents verification, etc. Best KYC service providers abide by the KYC compliance regulations to reach the anticipated targets using top-notch technology methods. 

Final Thoughts

Every industry has its own compliance regulations. Digital medium also follows its own jurisdiction to operate safely in the financial market. Some financial organizations follow the standard KYC compliance regulations according to the region. Moreover, FATF, IMF & other regulatory bodies frame laws for KYC service providers to secure financial actions. Financial Times reports 580 million Euros fraud driven by fake identity and documents. Furthermore, a 40% increase in criminal fraud is also reported. Several new KYC service providers are operating in the market. So they are providing the best onboarding KYC compliance solutions for data protection and seamless financing.


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