Financial institution is an industry that deals with money and when money is involved there is bound to be an attempt to theft or fraud. Identity theft and fraudulent activity is a major concern for financial institutions. In this age of technology, criminals have found digital ways to twist the system and make illegal attempts to get their hands on the financial funds that do not belong to them.
To fight these particular criminals, the use of technology is of the essence. This is where fintech plays a key role. The fintech industry utilizes technology to help in enhancing the services provided by financial institutions. With the help of fintech services, financial institutions can be secure in dealing with their customers. Fintech Shaping, Let us discuss in this blog how fintech helps financial institutions.
Fintech – KYC/AML Services
KYC solution is a part of a fintech service that ensures the safety of the financial institutions in dealing with their customers. KYC and AML is compliance that every financial must regulate with in order to verify the identity of their customers and monitor them for their verity.
Financial institutions face such a hassle in complying with these KYC regulations manually. It’s a hectic task that requires a large number of staff to deal with the sensitive data of each and every customer. This not only guarantees the data security but also the verification process is done accurately. Fintech Shaping, On top of that, the operational cost of managing the process manually is a different concern. This is when the use of technology is provided by the fintech industry comes in handy. Artificially intelligent solution provided by fintech to these financial institutions can halve their burden.
Identity Verification through Fintech
With the use of technology, financial institutions can get the verification process done within seconds. The process of onboarding a customer will become a lot easier than ever.
Following is how the online identity verification services work:
- Face Verification
The face verification process helps to verify the face of the customer. The customer is asked to submit their selfie or a video. The selfie of the end-user is screened against the picture of the ID document or government-issued document submitted at the time of the registration. With a 3D depth perception and liveness detection test, the authenticity of the customer’s face is also verified. AI-based software can detect if any spoof attack is occurring.
- Document Verification
In this process, the verification of a customer is done through government-issued documents. The government-issued documents could be ID documents, driver’s licenses, etc. The end-user is asked to send an image of their government-issued identification document. This ID document is verified against the previously registered documents. The ID document is also verified through an AI-based system to make sure of its authenticity. Document verification can also verify the age of the end-user for their safety.
- Address Verification
This is another way of verifying a customer through their address. Address verification can be carried out by submitting a secondary document that contains your address or home address. This could be the utility bill or driver’s license or even the bank statement.
- 2 Factor authentication
This is another way of varying a person’s identity. To verify a person’s identity through two-factor authentication, a code is sent to the end-user’s phone or their email address. Only a person with access to the code can be allowed access otherwise the identity verification will be failed. Fintech Shaping.
AML is also a service that helps financial institutions in monitoring the customer or businesses for any suspicious money laundering activity. The customers listed on global watchlists will be highlighted and the businesses will be warned of the potential risks they can face.
Fintech can provide these services to financial institutions and make their life easier. Financial intuitions will be a victim of fraud anymore and they will not have to pay a large sum of penalties to and face the loss of money due to theft and fraudulent activities. With the help of these services, Financial institutions can keep their good reputation as well.