Financial institutions face constant pressure to comply with regulatory mandates designed to stop identity fraud and money laundering while still delivering excellent customer support, watching bottom-line results, and meeting business objectives. In today’s complex business environment, this may seem like an almost impossible task. However, those regulatory mandates also create many opportunities to increase efficiencies and save money. By integrating identity verification into the general risk management strategy, financial institutions can expect to see substantial benefits to their bottom lines, customer support levels, and employee productivity.
For today’s financial institution, identity verification is just a critical part of establishing a fresh relationship. True identity verification means reviewing the truthfulness of just what a prospective customer discloses by screening the information against multiple sources, then analyzing the important points to ascertain whether a fresh relationship ought to be started. “Know your customer” has been promoted within institutions as a sign of personalized customer support; however, with the enactment of the USA PATRIOT Act regulations, identity verification is now the difference between success and failure in the ever-changing financial services market.
Why is identity verification important to financial institutions?
The increased role of the country’s financial institutions in securing the house front must not be undervalued. The purpose behind the USA PATRIOT Act is national security. No-one will disagree that having a much better understanding of the customer doing business at an institution provides increased security for the institution, its customers and the public in general.
The danger for banks is more than just monetary loss. 먹튀 Damage to a financial institution’s reputation produced by noncompliance and the publicity surrounding terrorists opening accounts can cause lost confidence in the institution and significant lack of customers, sales, and revenue. Recovering from negative publicity is just a long, difficult, costly process.
Institutions need to stop identity fraud while balancing the requirement to protect customer information with a customer’s requirement for quick, efficient service. Identity verification is clearly a first faltering step in reducing the opportunities for fraud and taking action. Stopping the “bad guys” from opening a fresh account at an institution is the simplest and most cost-effective way to cut back a bank’s burden. That’s how “knowing your customer” can help–if identity verification becomes area of the defensive measures within the general risk strategy, it can be a significant element in preventing fraud.
Increasing Operational Efficiencies
The USA PATRIOT Act has driven financial institutions to review corporate policies and perform lengthy risk analyses. Identity verification technology helps integrate policies into normal routines by allowing frontline workers to gather needed information rapidly and efficiently rather than manually researching identity information by calling references and checking websites.
From airline go school registration to doctor visits, society is used to trading some privacy for the security of each individual and the country. However, customers do expect their financial institutions to guard their identity information and their fiscal assets. Identity verification programs allow new accounts to be opened quickly, making a positive experience for the buyer while showcasing the methodology the institution has in position to guard its customers.
Determine perhaps the customers appear on any listing of suspected terrorists or terrorist organizations(2)
You’ll find so many options available to greatly help banks implement identity verification programs to comply with the regulations, always aiming to produce educated and proactive decisions about customers. The USA PATRIOT Act regulations allow a documentary or nondocumentary approach.
Documentary Solution
Traditionally, the utilization of manual or documentary solutions for identity verification has been prevalent in the financial services community. At many institutions, a worker will look at a driver’s license or passport to start account-opening procedures. Institutions are depending on driver’s licenses and passports to be valid, but with the recent escalation in forgery, it’s difficult to possess confidence that the documentation is legitimate.
Nondocumentary Solution
Because the enactment of the USA PATRIOT Act, technology has improved within the region of identity verification. Identity verification technology provides a simple approach to integrating a CIP into an institution’s risk management strategy. In addition, identity verification technology gives an institution a cost-effective tactic for keeping up-to-date with ever-changing regulations.
For true identity verification, it is important to screen presented data against multiple independent sources to make certain consistency. Checking one source will not provide enough information, and there’s no database which includes everyone surviving in the United States. This implies an institution must concur that the name, Social Security number, address, and date of birth are valid and associated with each other using various data sources. If the data is unvarying throughout multiple sources, the institution can make an informed decision that it is truthful. By using identity verification technology, organizations may have the equipment, not just to verify identity, but also to screen against government lists and document transactions. Institutions can completely comply with the regulations, while also realizing the benefits of protecting against fraud, increasing operational efficiency, and improving customer support levels.
