In the modern digital world, identity fraud is a difficult issue to tackle for digital businesses. According to Insurance Information Institute (III), there were around 14 million victims of ID theft.
Additionally, with the increase in online transactions during and after the pandemic era, the number of fraudulent transactions and data privacy breaches have also increased. In this case, only the application of KYC documents checks can help businesses deal with the above challenges.
Moreover, companies can also ensure compliance with know your customer & anti-money laundering regulations.
KYC Documents Checks: A Quick Overview
During account opening or executing monetary transactions, staff members ask the users to submit their government-issued records, such as driving licences or passports. The verification officer validates details on the given documents and cross-matches them against ID documentation. This is important to ensure that only genuine customers enter the company.
This is important because AI services can replace verification officers. This way, companies can empower businesses to perform ID validation remotely with online document verification. In this way, only genuine clients will be able to perform monetary transactions, and no bad actor can exploit the company through sophisticated techniques. With time, technological innovation is increasing, and companies must opt for the latest digital solutions to discourage fake documents and identity theft effectively. In this light, the significance of applying KYC documents checks becomes evident.
According to Markets & Market research, KYC documents market size will grow to around 18.6 billion dollars by 2026, showing a CAGR of 16.6% during 2021-2026.
As per the research, key market drivers behind the growth of identity verification market are:
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Increasing Digitization
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Rising Smart Infrastructure
In the modern digital world, companies have benefited from technological innovation, but fraudsters have also utilised intelligent solutions to achieve their malicious goals. The application of KYC documents can facilitate corporations to discourage external attacks and streamline the onboarding process.
Top 5 Document Fraud Strategies Used By Fraudsters
The following are five popular strategies that criminals use to exploit the corporate world.
Illegitimate Records
Illegitimate documentation is completely fake because such records do not have holograms, rainbow prints, and micro prints. Such features are present in original documentation from government agencies.
False Documents
False records do not have manipulations or forgeries, but perpetrators steal such records to bypass the record verification systems. Only the application of KYC documents checks can help companies discourage false records scams effectively.
Modified Documents
Fraudsters manipulate the original records to bypass the defence mechanisms. Criminals create various modified records so meticulously that the human eye cannot detect the manipulation. This is where only the application of KYC documents can help professionals identify deceptions in records effectively.
Camouflage Records
Fraudsters mention fake data on camouflage records. Criminals fill in the names of issuing authorities that have never existed and do not have the authority to issue records. This is a basic type of fraud that can bypass outdated security protocols. However, the implementation of KYC documents checks can facilitate users to discourage scam attempts.
Blank Stolen Records
Original documentation is usually blank, and fraudsters leak authentic records from the manufacturing supply chain by filling in fake data.
Famous Benefits of Using AI-Driven KYC Documents Checks
The following are popular benefits of using innovative digital solutions to discourage scam attempts from fraudsters.
Providing Speed & Convenience to Customers
The factors of speed and convenience are important to users in order to ensure a positive customer experience. Previously, the manual procedures were slow and cumbersome, which led to clients shifting from one company to another.
By collaborating with third-party vendors, companies can implement KYC documents to validate the identities of new customers. The use of government-issued records, such as passports and driving licences, can help experts onboard genuine clients by screening photos of original records in real time.
Mitigating Risks & Attracting Genuine Customers
In the context of business growth, performing identity verification becomes increasingly important to discourage crime & connect with genuine clients worldwide. As per a global fraud report, the absence of robust security protocols can discourage customers from receiving benefits from the company and shift to a better experience.
KYC documents checks can help mitigate business risk, increase customer satisfaction & ensure compliance with know your customer & anti-money laundering regulations. This way, experts can reduce errors in the final output & attract genuine customers.
Final Thoughts
The application of KYC documents can help corporations streamline their onboarding procedure. This way, companies can analyse the sensitive data of customers and validate it to ensure its authenticity. The innovative digital solution also cross-checks data against global watchlists to discourage high-risk entities from exploiting the system. Companies can also team up with third-party vendors to implement KYC documents services and ensure a positive experience for clients. This way, corporations can secure a competitive advantage and ensure compliance with KYC & AML regulations.
