Overwhelmed is a word many professionals in financial services use as they scramble to stay compliant with the vast array of global regulations aimed at preventing financial crime and fraud.
What’s the answer?
Step 1: Collect high-quality, verified contact data
Having access to quality customer data is key to achieving financial compliance with global regulations. This requires having accurate and reliable contact data for every customer. To effectively deliver this necessitates obtaining data quality tools that standardise, parse and validate addresses worldwide.
It’s important to highlight that it’s not enough to simply check whether an address exists or is valid. There needs to be a direct connection to a verified individual or business. Names and addresses must be linked in real-time, to identify discrepancies that could be red flags for fraud or compliance failures.
Step 2: Verify Identities in real-time with eIDV solutions
With electronic identity verification (eIDV) tools being “always on” they can, in real-time, cross-check the names and addresses – for proof of address – email addresses and phone numbers provided by prospective customers during remote onboarding. Therefore, they not only help to prevent fraud, but provide a good customer experience while doing so. For the best results just make sure that the service used has access to billions of data records from trusted global sources.
Bear in mind that eIDV is considerably quicker, more accurate and cost effective for undertaking ID verification and preventing fraud than manual checks. It’s because this technology requires no additional staffing or training costs, and there’s no risk of human error.
Step 3: Perform mobile identity verification
Mobile ID verification tools are becoming a standout part of the ID verification and compliance toolkit. It’s because with a global population of just over eight billion people, and around five billion having access to a smartphone, a mobile number is rapidly becoming a key part of the identity verification process and in the fight against fraud.
A big benefit of a mobile ID verification service is that they utilise real-time data from mobile network operators (MNOs) to authenticate an individual’s identity instantly, with a high degree of accuracy. Unlike traditional methods that depend on semi-static data.
Ultimately, mobile ID verification offers a dependable and streamlined method for authenticating users, preventing fraud, and meeting regulatory compliance.
Step 4: Undertake robust KYB checks
Most regulators require those in financial services to deliver know your business (KYB) checks. KYB is crucial for those financial organisations wanting to fully understand the risks posed by new and existing business customers and suppliers. Also, undertaking KYB checks is vital for financial institutions to identify fraudulent shell companies that can often hide in plain sight, and are frequently the source of money laundering and fraud.
By integrating a KYB solution it’s straightforward to confirm the legitimacy of businesses and suppliers, while aligning a bank’s systems with international regulations for AML and combatting the financing of terrorism.
Step 5: Deliver sanctions and PEP screening
Effective compliance with financial regulations worldwide necessitates screening against always-on global watchlists of sanctioned, politically exposed persons (PEPs) and relatives and close associates (RCA) data. This ensures that you protect your organisation against potential fraud, while avoid having customers that can damage your reputation. Due to the nature of their roles or relationships with individuals in positions of authority both PEPs and RCAs are more likely to be involved with or drawn into crime. In fact it’s a legal requirement for financial institutions in the UK to undertake enhanced checks of both domestic and foreign PEPs.
Obtaining solutions that have access to authoritative sources of sanctions, PEP and RCA data worldwide, and can deliver them in real-time, are the way forward.
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