ID Proofing: Reasons Investment Companies Need it

id verification

Financial frauds have soared sky-high in the recent past. The UK-based financial institutions lost £1.2 billion in financial losses in 2018. According to a report, identity theft fraud rose to 3 million in the USA in 2018 and more than 50% of those stolen identities were used in financial fraud with banks and businesses. 80% of the businesses in the USA have faced an online loss in 2018. Hence the reason 79% of the businesses want an effective ID Proofing and document verification service that has a minute or no impact on the online customer experience. 

The investment companies have been widely used for performing financial fraud, but according to a more conventional belief, the banks are the most common victims. If this would have been the case the regulatory authorities would not have felt the need for regulations for all types of financial institutions. AML(Anti-Money Laundering) regulations around the world have placed the same AML compliance regulations on the investment companies as on the banks or other financial institutions. 

Investment companies have also evolved with the advancements in Fintech and its services have scattered on a broad spectrum. The whole investment process has become very diversified and easily accessible. Investors are taking investment advice and making huge investments in the comfort of their homes. This online cloud of investors also comprises many identity thieves, money launderers and terrorists. 

Money laundering

Online customer onboarding adds a feather to the investment companies’ profile but also brings in extra risk with it. Identity thieves are using the stolen identities to fake as credible customers and use the investment platform to legitimate their illegal money proceeds. Hence the investment companies unknowingly play the role of a major contributor in the process of money laundering. In order to keep the customer base clear of money launderers, the online identity verification services must be adopted as soon as possible because it is the ultimate solution to most of the financial loss of investment companies. Especially for those providing online services.

Regulatory compliance

All types of businesses are coming under the umbrella of KYC identity verification regimes in different regions of the world. The financial institutes are the main regimes in different regions of the world. The financial institutions are the main focus because they are the most common target of fraudsters. The regulatory compliances around the globe have made it necessary for businesses to perform identity verification on their customers before opening their account. And the non-compliant business is liable to fines of the worth of dollars.

Enhanced customer experience

The online identity verification adds an extra security layer to the business system and improves the online experience of investors. A study states that most of the investors around the globe are risk-averse. According to a survey in the USA, 74% of consumers indicated that they have more faith in businesses that use biometric verification, like face verification or two-factor authentication. 

How do you know someone is who they say they are? How do you answer this question when your customer is not even sitting next to you? To help answer all these queries instant online id verification service are here with intending to prevent terrorist financing, identity theft, data breach, online fraud, and money laundering. In today’s dangerous and fast-moving world, dirty money is a recipe for major trouble. No business that wants to avoid hefty fines or a bad reputation can risk dealing with funds that are associated with fraud, terrorism or money laundering. A key preventive step is having an effective system in place to verify the identity of customers or clients. Businesses investing in online customer identity are one step ahead of their competitors.

1 Response

  1. 17/10/2019

    […] You might also like to read about ID Proofing: Reasons Investment Companies Need it […]

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