Identity fraud is a growing issue as technology continues to make giant strides. The pandemic and the transition to digital channels have exacerbated the problem to a whole new level in terms of size and scope. While identity fraud has obvious consequences for individual parties, it’s also detrimental to financial institutions that fail to spot it.
How to stop identity fraud before it even starts?
The most effective place to stop banking fraud and scammers is at the starting point of your relationship with your client: during the onboarding process.
In today’s unsettled market, the onboarding process is highly susceptible to fraud. For this reason, all industries need to have a risk-based anti-money laundering solution to perform proper due diligence and establish an excellent customer experience.
In order to stop fraud in time, you need to count on an arsenal of digital tools that will keep up with the pace of bad actors who are also using technology to their advantage.
What tools should you be using to prevent fraud?
It makes sense to use all the tools at your disposal to minimize the risk of fraud. You can verify a person’s intentions, identity, and assets by using a specialized ecosystem of mechanisms.
In order to overcome this challenge, it requires developing and implementing a digital set of best practices. The best system uses ID verification and fraud prevention services within an operational framework. Thankfully, there are many digital tools you can use to assess prospects.
You can begin with the basics by using local identification verifications to check a driver’s licence, ID, or passport. You can also verify a prospect’s phone number, email, and billing information for further clarity. This process can also include more stringent tactics involving advanced identity verifications like facial recognition, biometric identification, and digital tampering verification.
KYC and AML checks, risk assessment tools, and compliance also have a stake in optimizing how institutions can capture, validate and regularly monitor customer identities. By optimizing these practices, you not only prevent fraud but highly decrease customer friction.
Using the benefits of automation
But, how to connect all these tools to achieve effective customer onboarding and mitigate fraud? To keep it short and simple; by automating your business-critical workflow.
Adopting a unified approach to AI using advanced digital identity processing capabilities can cut customer onboarding from several days to minutes without compromising on safeguards for fraud prevention. When automation is in the picture, you’re not only preventing fraud, but you also save time and money and allow greater compliance. It also creates a quicker experience for customers. The combined efficiency makes for a much better relationship down the road.
The key element for an outstanding automated fraud prevention strategy relies on knowing your customer. To do so, most companies rely on risk management tools. With this solution, institutions use clients’ data and automatically assign a risk level. The risk level is based on parameters to determine higher or lower risk. This system leads to an automated approval and rejection function. It can stop the onboarding process in its tracks if a client does not meet identity requirements.
In conclusion
When working with digital onboarding risk prevention, you have to choose tools that suit your company best and integrate them into your onboarding process. Moreover, you need a solution that automatically identifies, assist, prevents, monitors, and reports red flags to ensure security to all parties involved.
By embracing digital tools, financial institutions can keep up with the changing pace of the world and mitigate fraud in the easiest, most secure, and fastest way possible.
About HelloFlow:
HelloFlow approaches the problem of digitizing client onboarding in a new way. The platform enables companies to set up onboarding and related KYC processes, using all the needed local and global services – all in a few minutes.
Visit our website: www.helloflow.io