Adding Identity Verification in to Danger Administration.


Financial institutions face constant pressure to comply with regulatory mandates designed to avoid identity fraud and money laundering while still delivering excellent customer service, watching bottom-line results, and meeting business objectives. In today’s complex business environment, this appears like an almost impossible task. However, those regulatory mandates also create many opportunities to improve efficiencies and save money. By integrating identity verification into the general risk management strategy, financial institutions can expect to see substantial benefits for their bottom lines, customer service levels, and employee productivity.

What’s identity verification?

Identity verification is defined as “the method of using claimed or observed attributes of someone to infer who the person is.”(1)

For today’s financial institution, identity verification is a critical facet of establishing a fresh relationship. True identity verification means reviewing the truthfulness of exactly what a prospective customer discloses by screening the info against multiple sources, then analyzing the important points to ascertain whether a fresh relationship must be started. “Know your customer” has always been promoted within institutions as an indicator of personalized customer service; however, with the enactment of the USA PATRIOT Act regulations, identity verification is now the difference between success and failure in the ever-changing financial services market.

Why is identity verification vital that you financial institutions?

The increased role of the country’s financial institutions in securing your home front mustn’t be undervalued. The point behind the USA PATRIOT Act is national security. No-one will disagree that having a better understanding of the customer doing business at an institution provides increased security for the institution, its customers and people in general.
The danger for banks is more than monetary loss. Injury to a financial institution’s reputation developed by noncompliance and the publicity surrounding terrorists opening accounts can cause lost confidence in the institution and significant loss of customers, sales, and revenue. Recovering from negative publicity is a long, difficult, costly process.

Compliance can’t be ignored because penalties for noncompliance are severe. Regulatory penalties for the USA PATRIOT Act and OFAC regulations can vary from $10,000 to $1 million per infraction.

How can a financial institution benefit from the USA PATRIOT Act?

Protecting Against Identity Fraud

Institutions need to avoid identity fraud while balancing the need to protect customer information with a customer’s requirement for quick, efficient service. Identity verification is actually a first step in reducing the opportunities for fraud and taking action 안전놀이터. Stopping the “bad guys” from opening a fresh account at an institution is the simplest and most cost-effective way to lessen a bank’s burden. That’s how “knowing your customer” can help–if identity verification becomes area of the defensive measures within the general risk strategy, it can be a significant element in preventing fraud.

Increasing Operational Efficiencies

The USA PATRIOT Act has driven financial institutions to examine corporate policies and perform lengthy risk analyses. Identity verification technology helps integrate policies into normal routines by allowing frontline workers to gather needed information rapidly and efficiently in place of manually researching identity information by calling references and checking websites.

Improving Customer Service

The consummate benefit from integrating identity verification into an institution’s risk management strategy is a higher level of customer service.

From airline travel to school registration to doctor visits, society is used to trading some privacy for the security of every person and the country. However, customers do expect their financial institutions to safeguard their identity information and their fiscal assets. Identity verification programs allow new accounts to be opened quickly, creating a positive experience for the buyer while showcasing the methodology the institution has in place to safeguard its customers.

Identity Verification Options

Section 326 of the USA PATRIOT Act requires that financial institutions develop Customer Identification Programs (CIPs) that implement reasonable procedures to

Collect identifying information regarding customers opening accounts
Verify that the clients are who they say they are
Maintain records of the data used to verify their identities
Determine whether the customers appear on any listing of suspected terrorists or terrorist organizations(2)
You’ll find so many possibilities to help banks implement identity verification programs to comply with the regulations, always aiming to make educated and proactive decisions about customers. The USA PATRIOT Act regulations allow a documentary or nondocumentary approach.
Documentary Solution

Traditionally, the usage of manual or documentary solutions for identity verification has been prevalent in the financial services community. At many institutions, a member of staff will look at a driver’s license or passport to start account-opening procedures. Institutions are relying on driver’s licenses and passports to be valid, but with the recent escalation in forgery, it is difficult to possess confidence that the documentation is legitimate.

Nondocumentary Solution

Considering that the enactment of the USA PATRIOT Act, technology has improved within the location of identity verification. Identity verification technology provides a simple way of integrating a CIP into an institution’s risk management strategy. Furthermore, identity verification technology gives an institution a cost-effective tactic for keeping up-to-date with ever-changing regulations.

For true identity verification, it is critical to screen presented data against multiple independent sources to ensure consistency. Checking one source won’t provide enough information, and there is not one database which includes everyone surviving in the United States. What this means is an institution must concur that the name, Social Security number, address, and date of birth are valid and associated with one another using various data sources. If the data is unvarying throughout multiple sources, the institution may make an educated decision it is truthful. By using identity verification technology, organizations might have the equipment, not just to verify identity, but also to screen against government lists and document transactions. Institutions can completely comply with the regulations, while also realizing the benefits of protecting against fraud, increasing operational efficiency, and improving customer service levels.

For financial institutions, the USA PATRIOT Act has established many burdens and opportunities. By embracing change and integrating identity verification into their corporate risk policies, institutions can protect against fraud, increase efficiencies, and keep service levels high while remaining profitable.

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