Criminal offences are very common in this age of technology. It is no longer possible to keep fraudsters at bay from the digital world. Multiple resources are channelise to commit financial crimes. And identity theft is a powerful tool to extend scam programs for illicit grains. The legitimacy of financial platforms like banks, e-commerce businesses, credit cards etc. is utilize to manage financial frauds. The need for advanced KYC verification procedures is evident from the rising challenges in the financial industry.
Converting illegal money into white money has become a common norm and more precisely. It is threatening the financial market in the shape of white-collar crimes. Compliance procedures cannot follow unless KYC verification is not complete with all its major attributes. That is why the significance of ‘knowing Your Customer’ for the corporate world is unaffordable to ignore anymore.
What is KYC Verification?
In the digital world, the financial sector is view through the lens of transparency and security. KYC is playing a vital role in ensuring the above-shared elements for a reliable financial system. Risk detection and prevention both lie at the heart of KYC verification. But there are certain gaps hindering meeting compliance procedures. Know Your Customer basically calls for complete information of customers. Including identity details, account information, assets record etc. to meet the security protocols of financial institutions. Bloomberg reveals that UAE is involve in financial risks like money laundering and terror financing. That is why client KYC verification is necessary to address strategic flaws for financial security.
Why KYC Verification in the Financial Industry?
The financial sector offers promising revenue to enhance global GDP. And any sort of criminal indulgence can put serious barriers to transparent financing. A large number of frauds are occurring in the banking sector to streamline money laundering activities. And according to an estimate by UNODC 5% of the global GDP. And $800 billion to $3 trillion worth of money is laundered annually which is actually an alarming sign for the financial industry. These statistics are horrible and enough to take serious KYC online verification steps to ensure clarity in financial transactions across the globe. Heinous crimes like terror financing, drug trafficking, human trafficking etc are patronage under the garb of ill-gotten money.
Financial Frauds & AML Compliance
With the changing global trends and technology integration, financial security is becoming a vital risk for almost every institution. There are various key components of identity verification including customer completely identity. Due diligence and a customer monitoring program to ensure the credibility of the customer and financial transfers. Financial scams are a part of the economic world but the intensity and ways of frauds actually turn their gravity status.
In the traditional methods. Fraud detection is not an easy task but KYC regulations ensure the KYC verification processes to detect financial thefts and money laundering schemes. According to The Guardian papers. Pandora leaks is the biggest ever money laundering scam than Panama leaks since it records 2.94 terabytes of data. Leakage including around 100 billionaires, 30 world leaders and 300 public officers. The biggest secret offshore accounts number is revealed in pandora leaks. Enough to indicate the loopholes in KYC verification and irregularities in AML compliance.
KYC Procedures to Control Money Laundering
KYC is still a unique term to various new financial startups but gradually technology is introducing its power to force businesses to do customer due diligence procedures and ‘Know Your Customer’ is the core feature of it. The various procedures are important to thwart money laundering deals for illegitimate purposes.
Customers Complete Information
It concludes all the basic information of the customer regarding name, address, and account details that are preliminary for account registration. For online KYC, all these objective detail is require.
Customers Identification to Information Verification
Identity information provided by customers is valid or not is extremely important and customer identification software validates the required attributes. Information verification ensures the validity of complete details of customers and introduces specific checks to monitor customers’ transaction details for better AML and CFT compliance procedures without any negligence. KYC verification is definite to enforce the reduction in money laundering and terror financing.
KYC Verification Non Compliance Threats
Digital forum is use as a potential medium. To forge black money into white and every criminal has to pass through a digital road to reach the fraud destination. KYC verification is a serious obstruction for criminals and even it detects the fraudsters before the crime is committed. Financial institutions with weak compliance procedures indirectly pose threat to the financial system. Money laundering from poor countries to wealthy states further causes financial disruption and economic fallout. Secondly, most wanted criminals get escape routes that otherwise could caught easily.
Smooth financing is not only the need of the corporate world but all sorts of financial institutions demand it for larger conversions in less time. A qualitative KYC verification process is indispensable to counter illicit financial gains and money laundering is the prime criminal offense in this regard. However, shufti Pro funding is based on customers’ due monitoring and KYC verification for better and real-time compliance guidelines. It dispatches reliable verification services for quick customer response.