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The number of cyber threats is growing on a daily basis, with new attacks happening constantly. You can hardly open a news portal without reading something about a cyber attack or a fraud affecting individuals, businesses, organizations, or even the governments. There are even numerous TV shows covering the subject of cybercrime. The truth is that fraudsters don’t care who their target is as long as they can make a profit. They are even updating their methods constantly and making them more difficult to trace to cause more damage. Fraudsters can find profit just about anywhere, from exploiting businesses or individuals by stealing their money to using cyberattacks to access confidential data, which they then use for further fraudulent actions.
Luckily, the development of technology and the internet have allowed businesses to introduce various cybersecurity strategies to keep up with fraudulent actions. The key aspect of cybersecurity is not to react to fraud but to prevent it before it can cause any severe damage. To prevent fraud from happening, the first and most important step you need to take is to know that your customers are who they say they are. KYC verification, according to SEON, is the tool you need. It gives you a unique opportunity to stay compliant with laws and regulations while confirming the identity of your users and gathering more information about them.
By introducing additional corporate fraud prevention solutions, you will be able to optimize KYC verification while ensuring the security of your business and its customers.
What exactly is KYC?
KYC or Know Your Customer KYC is a security method for verifying the identity of the customers while at the same time fighting against financial crime, money laundering, and fraudulent actions. Businesses of all sizes need to comply with KYC regulations, just on different levels. While financial institutions such as banks, fintech companies, stock exchanges, or cryptocurrency exchange platforms need to have diligent verification protocols, companies from other business sectors don’t have to be as extensive with their requirements. Using KYC verification helps you confirm that you’re dealing with a real person and be more aware of the risk that a user can bring to your company. But KYC verification also has some barriers when it comes to its use.
What barriers is customer verification facing?
While customer verification brings various benefits to the company, especially in the area of security, it still has some barriers to resolve.
For example, customer verification doesn’t end once you confirm a customer’s identity. If you want to ensure maximum security and that your business is protected, this needs to be an ongoing action. Users who were classified as a low risk of fraud can still change their risk status over time. In combination with device fingerprinting, re-screening of your users needs to be conducted regularly. Luckily, by using proper KYC verification software, you can monitor the changes in the users’ status and the risk levels and re-screen only users that raise red flags.
The main issue with KYC verification is that it can bring the risk of losing customers due to lengthy and demanding processes. Customers just want to use your services and not spend their time going through various steps and waiting for approvals to be able to access your network. If they need to go through hoops, there is a high chance they will give up and leave your website searching for another that doesn’t require as much. Customer satisfaction is a top priority in any business sector which is why you need to ensure they are satisfied with the length and simplicity of the process. This is why your KYC verification process needs to be as optimized as possible. Don’t ask your users for more information than you need; you can collect any additional information by using device fingerprinting or data enrichment without causing user friction. By regularly testing your verification process, especially when you make some changes, you will be able to see the process from the side of your users and adjust it to be as optimized as possible.
The truth is that KYC verification is a tricky balancing act of conducting extensive identity checks while at the same time ensuring customer satisfaction, and all businesses need to find their way of keeping it in balance. By introducing additional fraud prevention tools, you will be able to optimize KYC verification while ensuring the security of your business and its customers.