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Articles 20th February 2023

Why Finance Companies Should Prioritize Identity Verification

Banks and fintech companies have come a long way in recent years, with technology emerging as a game-changer. It enables them to streamline internal operations and deliver top-notch services to their customers. But cybercrime, online fraud, and identity thefts are the areas they struggle with. Finance companies need to go the extra mile to address these risks. Fortunately, they can rely on identity verification practices to ensure the safety of the organization and its customers. Let us explain why finance companies should prioritize it as a part of their operations.

Preventing identity theft

Identity theft is rampant, with countless people reporting such incidents every year. It is also one of the most daunting concerns for banks and financial institutions. Online fraudsters often access personal information through various scams and tricks and use it for fraudulent financial gain. For example, they steal credit information and misuse these credentials. Fortunately, finance businesses can rely on real-time identity verification solutions to verify customer documents and analyze previous records from the databases.

Ensuring coverage against fraud risks

Banks, B2C fintech, credit unions, credit card companies, insurance firms, and accounting businesses deal in money. It makes them vulnerable to fraud. Cybercriminals can find loopholes and vulnerabilities in the technology and commit financial fraud with a few clicks. Data breaches and financial losses are the worst threats financial companies encounter. However, ID verification can keep hackers and malicious actors out of the systems and safeguard businesses from fraud risks.

Facilitating regulatory compliance

Money laundering and tax evasion are more common than ever, and unscrupulous people use financial platforms for such activities. Law authorities enforce compliance guidelines for finance businesses to check these fraudulent activities. Banks and financial services firms must comply with AML (Anti Money Laundering) and KYC (Know Your Customers) to stay on the right side of the law. The good thing is that they can leverage online identity verification solutions to ensure compliance without a lot of work. It protects them from penalties and legal hassles in the long run.

Enhancing customer experience

The financial sector is competitive, and businesses struggle to stay ahead in the race. Customer experience is the main differentiator. Financial institutions can leverage digital ID verification to verify consumer identities during onboarding. The process is smooth for banks and seamless for customers as they need not share excessive data. Moreover, verification during onboarding is quick, with step-up methods used only when necessary.

Improving reputation and credibility

The reputation and credibility of a business are crucial in a competitive landscape. Implementing identity verification can boost business reputation as customers are surer about the safety of their confidential data with a proper verification process in place. Trust leads to strong and lasting relationships with customers in the long run. It also drives recommendations and referrals, as people are far more likely to refer businesses they feel confident about.

Nothing matters more than customer trust in financial institutions because it is the core of their business. However, upholding the faith is easier said than done in the era of cyber threats and online fraud. But the situation is not as daunting as it appears. Banks and financial institutions can rely on robust ID verification to prevent malicious fraudsters from accessing their systems.