The CoronaVirus pandemic has resulted in a paradigm shift in the identity verification space. The pre-COVID-19 identity verification heavily relied on the manual process. Users had to visit the place of verification to get themselves verified. Needless to say, that method of verification let slip many identity criminals and caused a significant amount of monetary loss to organisations.
Now, the business operations have shifted online, and the verification processes along with it. In this scenario, the necessity of efficient KYC/AML compliance cannot be ignored anymore by organisations. The applications of the said solution include, but are not limited to, curbing money laundering, human trafficking, identity theft, smuggling, terror financing, and tax evasion.
What Do the Terms AML/KYC Compliance Entail?
Know Your Customer (KYC)
Know Your Customer (KYC) is a process of validating the identities of incoming customers. Financial institutions and businesses like online stores, retail stores, hospitals, travel agencies, etc. are required to ensure customer due diligence. KYC is an ongoing process and is not just limited to initial registration on a particular platform. Whenever large transactions are conducted or the customer requires authorisation access to a website, KYC checks are performed to ensure the legitimacy of the process.
Anti-Money Laundering (AML)
Anti-Money Laundering (AML) compliance is the term used for a set of security procedures to detect money laundering fraud before happening. Here, AML checks are performed to check whether a particular individual or a business is involved in money laundering or not. Moreover, AML checks can also detect flagged or shady transactions. If AML checks are conducted by a proper AML/KYC provider, financial crimes can be curbed significantly.
Correlation Between AML and KYC Compliance
AML/KYC compliance, at a first glance, seems like two different names for the same thing. Both deal with verifying the identities of customers. But, if you are a business in need of a AML/KYC solution, it is advised that you know the difference between the two. Moreover, you don’t need to look elsewhere to do that because we have got you covered.
In short, AML is an umbrella term used for a variety of regulatory measures and KYC is a subset of it. But, it does not mean that KYC is a redundant process as it is the first step to undertake while implementing a greater AML compliance program.
AML/KYC Compliance: Why is it Such a Big Deal?
AML/KYC compliance is not just necessary for impeding identity theft for the organisation’s sake. The regulatory authorities require the organisations to comply with AML/KYC laws. It should be noted that this compliance is not an option that can be skipped with minor incurred losses from ID fraud. The authorities put these organisations under operative restrictions and punish them with heavy fines if the compliance rules are not followed.
Why You Need to Adopt a Digital AML/KYC Provider
The adoption of an automated AML/KYC solution has the following advantages over a manual one.
- It has the ability to detect and differentiate different patterns on a document like signatures, watermarks, etc.
- The automated KYC solutions are more accurate, faster, and efficient.
- Any possibility of human-errors emanating from fatigue or a failure in the analysis is removed.
- It costs less than the manual process.
- The word ‘digital’ points to an obvious fact that the verification process can be done remotely.
- Then in This Domain, What Can be Termed as Great?
Greatness is a big word and we hope that the name of your business is used with this word. For that to happen, you need to employ AML/KYC services that have great features. Following are the must-haves for a AML/KYC solution.
- Online biometric verification technologies like face recognition, iris scanning, etc.
- Detection capability for electronic forgery, holograms, and other spoof attacks.
- OCR technology for recognition and extraction of data from documents.
- Document verification assisted by artificial intelligence and machine learning models.
- Public information about pricing and accuracy rate of results.
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