Financial institutions face constant pressure to comply with regulatory mandates designed to stop identity fraud and money laundering while still delivering excellent customer care, watching bottom-line results, and meeting business objectives. In today’s complex business environment, this seems like an almost impossible task. However, those regulatory mandates also create many opportunities to improve efficiencies and save money. By integrating identity verification into the entire risk management strategy, financial institutions can expect to see substantial benefits to their bottom lines, customer care levels, and employee productivity.
For today’s financial institution, identity verification is a critical part of establishing a brand new relationship. True identity verification means reviewing the truthfulness of exactly what a prospective customer discloses by screening the data against multiple sources, then analyzing the facts to find out whether a brand new relationship ought to be started. “Know your customer” has been promoted within institutions as an indicator of personalized customer care; however, with the enactment of the USA PATRIOT Act regulations, identity verification has become 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 your home front must not be undervalued. The purpose behind the USA PATRIOT Act is national security. No body will disagree that having an improved understanding of the client working at a company provides increased security for the institution, its customers and the public in general.
The danger for banks is more than just monetary loss. 먹튀 Harm to a financial institution’s reputation developed by noncompliance and the publicity surrounding terrorists opening accounts can lead to lost confidence in the institution and significant loss in customers, sales, and revenue. Coping with negative publicity is a long, difficult, costly process.
Institutions need to stop identity fraud while balancing the necessity to protect customer information with a customer’s requirement for quick, efficient service. Identity verification is actually a first faltering step in reducing the opportunities for fraud and taking action. Stopping the “bad guys” from opening a brand new account at a company is the simplest and most cost-effective way to reduce a bank’s burden. That’s how “knowing your customer” can help–if identity verification becomes area of the defensive measures within the entire risk strategy, it could be a significant factor 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 quickly and efficiently as opposed to manually researching identity information by calling references and checking websites.
From airline travel to school registration to doctor visits, society is accustomed 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, developing a positive experience for the customer while showcasing the methodology the institution has set up to guard its customers.
Determine perhaps the customers appear on any list of suspected terrorists or terrorist organizations(2)
There are many solutions to simply help banks implement identity verification programs to comply with the regulations, always aiming to make 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 member of staff will look at a driver’s license or passport to begin account-opening procedures. Institutions are depending on driver’s licenses and passports to be valid, but with the recent upsurge in forgery, it is difficult to own confidence that the documentation is legitimate.
Nondocumentary Solution
Because the enactment of the USA PATRIOT Act, technology has improved within the area of identity verification. Identity verification technology offers a simple approach to integrating a CIP into an institution’s risk management strategy. Furthermore, identity verification technology gives a company 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 sure consistency. Checking one source won’t provide enough information, and there is no single database that features everyone surviving in the United States. This means a company must make sure the name, Social Security number, address, and date of birth are valid and associated together using various data sources. If the information is unvarying throughout multiple sources, the institution may make an informed decision that it is truthful. By using identity verification technology, organizations may have the tools, not only to verify identity, but and to screen against government lists and document transactions. Institutions can completely comply with the regulations, while also realizing the advantages of protecting against fraud, increasing operational efficiency, and improving customer care levels.