Behavioral monitoring solutions, also called user behavior monitoring (UBM) systems or behavior monitoring tools continuously follow and analyze the actions of users across different platforms and applications. These collect data such as login times, keystrokes, mouse movements and application use patterns. Through studying this information these tools can recognize any strange or unusual activities that could be indicative of a security threat.

What are Behavior Monitoring Solutions?

Biometric authentication is an identity verification technique that looks at patterns in how people behave when they type on keyboards, move mouse, waggle joysticks, use touch screens etc., as well as changes to those which may indicate something has gone wrong. This approach provides insights instantly to recognise the unusual behavior pattern. Security-conscious organizations from all sectors now insist upon including biometrics among their protective measures so they can keep private information safe while maintaining confidence among users.

Identity verification that looks at behavior patterns of users is called Behavioral biometrics. Through this dynamic approach, real-time insights are provided which makes it difficult for scammers to infiltrate an account illegally. In order to protect sensitive data and maintain trust among its users, businesses across various industries are increasingly adopting behavioral biometrics.

The Key Benefits of Behavior Monitoring Solutions

Proactive Threat Detection:

Behavior monitoring solutions enable proactive threat detection by observing unusual user behavior through multiple digital touchpoints, allowing organizations to respond promptly and reduce risks.

Advanced Fraud Prevention:

Behavior monitoring solutions enhance defense mechanisms against cyber criminals by examining user interactions and identifying abnormal activities, protecting enterprises’ finances and reputation from damage caused by attacks.

Better User Experience:

Behavior monitoring software is a superior security method that minimizes false positives and friction for users, ensuring a seamless online experience for both external and internal clients, including staff members using organizational portals regularly or occasionally.

Adaptive Risk Management:

Adaptive risk management uses continuous learning to identify and mitigate cyber threats, implementing behavior monitoring solutions and automatically changing risk thresholds to prevent human intervention.

Implementing Behavior Monitoring Solutions Effectively

Comprehensive Data Collection:

It should ensure that it collects all digital channels’ data which is important for accuracy of analysis and anomaly detection.

Fine-Tuned Algorithms:

This means that organizations have to invest in the development and fine-tuning algorithms used to differentiate between normal and suspicious behavior.

Integration with Existing Systems:

Behavior tracking software needs to be integrated into the existing security infrastructure so that there can be coordinated threat identification and reaction at all times.

Continuous Monitoring and Analysis:

For potential security threats, establish robust processes for real-time monitoring of user behavior and data analysis.

Types of Behavior Monitoring Solutions

There are numerous brands of behavior monitoring solutions available today, each having its own strengths and weaknesses. Some common types include:

Network-based Behavior Monitoring:

This type of solution analyzes network traffic in order to identify suspicious activities like unauthorized access attempts or data exfiltration.

Endpoint-based Behavior Monitoring:

This type of solution records activity on individual devices like laptops and computers. It identifies malware, keystroke logging and other malicious acts.

Cloud-based Behavior Monitoring:

This type of solution watches over actions taking place in cloud environments such as IaaS platforms and SaaS applications. It can detect unauthorized access, data breaches, among other security threats.

Behavior Monitoring Solutions Across Industries

Nowadays, in a digital world where everything is connected through the internet there are certain industries which include banking and finance, cryptocurrency, fintech, healthcare, insurance, online gaming, telecoms, border customs and security etc. These industries have adopted behavior monitoring solutions for strong identification verification. They take advantage of these new inventions by using complex mathematical formulas to study how people behave thus ensuring safety against frauds.

The usefulness of this technology cannot be understated in the banking sector alone; it has helped identify suspicious transactions that could have led to huge financial losses if not detected early enough. On the other hand, healthcare providers use them as part of their compliance strategy with HIPAA regulations since they help protect patient’s personal information from unauthorized access. Online gaming companies also benefit greatly from such systems because they improve user experience by preventing hackers from gaining unfair advantage over other players’ accounts. Cybersecurity measures are beefed up when ecommerce platforms integrate behavior monitoring tools into their websites

Choosing the Right Behavior Monitoring Solution

Security Requirements:

Various businesses have several security requirements. Protection from external attacks may be necessary for some companies while others may be concerned with safeguarding against insider threats.

The business’ Budget:

The cost of behavior monitoring solutions can be free or several thousand dollars per year. Businesses should select an option that fits within their budget.

The Business’ Technical Capabilities:

A few behavior monitoring solutions are harder to implement. Companies must therefore opt for a solution they have the technical know-how to support.

See More, Know More: IDMERIT’s Top Behavior Monitoring Solutions

IDMERIT is a top provider of identity verification tools which include those used for behavior monitoring purposes. Their software tracks behaviors using advanced machine learning algorithms so as to detect any suspicious activities by users. Corporations utilize IDMERIT’s products across different sizes in order to keep off fraudulent acts and other forms of insecurity. According to this article about improving security posture through fraud prevention; it states that when seeking ways to tighten up protection against scams, one should consider utilizing behavior tracking systems because they enable establishments to identify cyber threats beforehand thereby protecting valuable resources.

The post Stop Fraud in Its Tracks: How Behavior Monitoring Solutions Level Up Security appeared first on IDMERIT.

Table of Contents

• • Understanding Online ID Verification
  • What are ID Verification Solutions, and Why do Businesses Embrace them?
  • The Dynamics of ID Verification Services
  • The Convenience of Verify Identity Online
  • Introducing IDMscan
  • Conclusion

Understanding Online ID Verification

This is a sophisticated process proposed to identify individuals involved in online activities today because cyber threats seem to be what is important, especially in areas of personal or sensitive nature, including financial transactions.

The inclusion of an effective digital identity verification system becomes paramount as cyber threats grow scarier, particularly on issues with sensitive information and financial transactions. Digital identity authentication, which is a broader concept that involves online-based identity verification through advanced technology that confirms the authenticity of one’s identity. This multilayered approach not only improves security but also simplifies user onboarding resulting in a seamless experience and it is simple to use.

Here are some statistics showing fraud rates in some industries in the past years:

• Money laundering in the cryptocurrency industry increased by 2022, totaling $23.8 billion.
• Up to 68% compared to the previous year, UK authorities lost £726.9 million to identity theft by 2022.
• According to UK Economic Data, in 2021, digital identity verification in finance achieved 77% adoption, indicating a more transparent financial environment.
• More than 100 billion pounds are laundered in the United Kingdom each year. Identity fraud is the most prevalent challenge for consumers, accounting for 6.03% of transactions by 2023, including 85% of cases involving imitation fraud.

What are ID Verification Solutions, and Why do Businesses Embrace them?

ID authentication solutions leverage on technologies such as artificial intelligence and machine learning to save and access personal information, guaranteeing strong identity verification procedures that are dependable and secure. Businesses in all sectors are now employing ID verification solutions to bolster their security levels. A detailed approach is achieved from this solution for validating user engagement, curtailing fraud risk, and adhering to regulations.

Companies who integrate digital identity verification into their operations show value by protecting user data and establishing trust with their users. Modern identification authentication solutions go beyond the traditional messy ways; they have fast procedures that are flexible enough to improve customer experience as well as enhance safety while opening new avenues of opportunities.

1. Building the wall of trust:
   Businesses are protected from financial loss, fraud and reputation damage by the identity verification platform. To avoid regulatory pitfalls, they facilitate compliance with KYC and AML rules and guarantee uninterrupted functioning.
2. Simplifying customer journey:
   ID verification solutions speed up onboarding processes , minimizing paperwork and offer bespoke recommendations thereby unlocking value data increasing customer satisfaction levels.
3. Beside special gate keeping:
   Contemporary identification is far beyond visually examining passports or driver’s licenses alone such as Document Detective, Biometric Guardians which are scanning documents carefully to authenticate them in real-time, using fingerprint and facial recognition technologies.

The reason why implementation of ID verification solutions does not only end with ticking off an item for the security team, but rather it is a strategic decision that carries weight .

The Dynamics of Identity Verification Services

Typically, identity verification services come through special channels; they serve as the central and efficient way for confirming that a user is who they say they are. With this service, document authentication, biometric authentication and data analytics are employed so as to ascertain the individuals approaching online platforms are genuine unlike in traditional mode of identification thereby increasing security.

The importance of an identity verification cannot be underestimated by businesses seeking a holistic approach. For example, these platforms usually offer real time analytic detection, fraud detection tracks and seamless integration capabilities The flexibility of these platforms allows them to be used across different sectors such as finance, healthcare or e-commerce.

The Convenience to Verify Identity Online

Knowing that one can verify himself while undertaking digital transactions is comforting. From opening bank accounts to accessing electronic services and making online purchases; however, simple and secure authentication systems improve the overall user experience to avoid having it stand up solidly which makes onboarding processes fast and hassle-free.

There are promising ideas in terms of online ID verification solutions’ future development due to technological progressions. The synthesis of artificial intelligence into more accurate forms.

Introducing IDMscan

First and foremost, it should be understood that IDMscan is a worldwide API for ID verification. It has been made in such a manner that makes it possible to scan the user’s ID documents and determine if he or she is truly who they claim to be. This can handle both online and offline document checks. It mostly validates government issued identity cards.

The solution involves verifying documents like driver’s licenses, national passports, and other government-issued ID documents from about 175 countries globally. Such features as the DeepFake detection model with the highest accuracy rates in the world; as well as liveness recognition model are included.

It enables real time comparison of faces and biometric facial recognition thereby guaranteeing that one is dealing with an actual person during the process of identifying IDs. Consequently, it offers some additional attributes such as Application Program Interface integration into existing platforms and multi-language support.

Conclusion

There is an advancing need for better online experiences, which makes online identity verification an important aspect in this perspective. IDMERIT has shown the way in providing excellent identification verification solutions; that are more dependable and consistent in finding away with the long-term challenges of identity verification through its commitment to modern technology by creating IDMscan API and up to date biometric recognition models.

IDMkyx is a combination of all the identity verification services together delivering secure and reliable ID verification solutions to safeguard your business in every situation whether it is in its current state or during expansion.

IDMERIT entrusts a full-fledged KYC AML solution crafted to assist businesses in verifying their customers’ identities and ensuring adherence to AML regulations, to scrutinize identity documents and meticulously verify individuals in real-time.

The post The Essence of Online ID Verification for Enhanced User Authentication appeared first on IDMERIT.

CONTENTS

• What are the challenges faced by crypto exchanges without KYC?
• The KYC Landscape in Crypto Exchanges
• KYC Builds Trust and Lowers the Risk of Transparency
• Benefits of KYC in Crypto Exchanges
• Overview of Crypto Exchanges in 2023
• The Role of KYC Solution Providers in Securing Crypto Exchanges
• Unlocking Efficiency with IDMERIT

What are the Challenges Faced by Crypto Exchanges Without KYC?

Before the widespread adoption of KYC in the cryptocurrency industry, there were several challenges:

1. Possibility of increasing Fraud: Cryptocurrencies, in their early days, offered a high degree of anonymity. While this was seen as a benefit by many, it also attracted individuals involved in illegal activities such as money laundering and fraud.
2. Reputation Risks: The association of cryptocurrencies with illegal activities tarnished their reputation. Trust and acceptance in the broader financial ecosystem were hindered, slowing down mainstream adoption.
3. Financial Risks: Without robust KYC solutions, financial risks and scams increase. Financial criminals who wanted to commit fraud were often attracted to crypto exchanges with no transparency or accountability. This led to financial losses.
4. Security Threats: The absence of KYC measures has made cryptocurrency exchanges more susceptible to hacking and cyber threats. These vulnerabilities resulted in significant losses for both users and platforms.

The KYC Landscape in Crypto Exchanges

KYC in crypto exchanges refers to the process of verifying the identity of users. It’s a robust mechanism that helps crypto platforms establish the real-world identities of their customers. The primary goal is to prevent fraudulent activities and to create a secure environment for trading digital assets.

To implement KYC effectively, crypto exchanges often turn to KYC solution providers. These solution providers offer a suite of services tailored to the unique needs of the cryptocurrency industry. By collaborating with these experts, crypto exchanges can streamline the onboarding process, enhance security, and reduce the risk with financial regulations. Below is how KYC solutions unlock the power in crypto exchanges:

1. User Verification: KYC solution providers use a variety of methods, including document verification and facial recognition, to ensure users are who they claim to be.
2. Risk Mitigation: By assessing user-profiles and tracking their activities, KYC solutions help exchanges identify high-risk individuals or entities. This proactive approach reduces the potential for financial crimes.
3. Enhanced Security: By implementing robust identity verification, crypto exchanges protect themselves and their users from security breaches and unauthorised access.

KYC Builds Trust and Lowers the Risk of Transparency

Financial misconduct, spanning a spectrum of illicit activities such as tax evasion, bribery, graft, financing of terrorism, and cyber intrusions into online banking systems, imposes an annual financial burden of approximately $1.4 to $3.5 trillion globally, with an estimated $2 trillion channelled through the laundering process.

Notably, crypto exchanges stand as susceptible targets, experiencing losses amounting to $4.26 billion in 2019 alone. The integration of Know Your Customer protocols within the realm of cryptocurrency and crypto exchange platforms can play a pivotal role in the identification and authentication of users, thereby diminishing the risk of financial crime and unauthorised operations.

Benefits of KYC in Crypto Exchanges

Implementing KYC solutions in crypto exchanges brings a multitude of benefits. These include:

1. Enhanced Trust: Users are more likely to trust and engage with exchanges that prioritise security and trust. KYC solutions make the decision-making process easy on the basis of identity verification.
2. Reduced Fraud: KYC solutions act as a deterrent to fraudsters and significantly reduce the incidence of fraudulent activities.
3. Combating Money Laundering: KYC & AML solutions help crypto exchanges avoid hefty fines and reputational damage. These solutions help in recognizing people involved in money laundering and terrorism financing.
4. Reduced Operational Costs: Automated KYC processes streamline user onboarding and reduce the need for manual verifications, cutting operational costs.
5. Global Expansion: Crypto Exchanges that prioritise KYC can expand to more countries by demonstrating a commitment to international regulations.

Overview of Crypto Exchanges in 2023

In 2023, cryptocurrency prices demonstrated remarkable resilience, especially considering that both Bitcoin and Ethereum had their worst annual performances in 2018. Despite a relatively unexciting performance in September, Bitcoin prices have surged by 63.3% year-to-date, while Ethereum prices have increased by 40.2%.

According to the most recent research conducted by Coinfirm, it has come to light that 69% of the 216 crypto-related businesses under scrutiny do not possess “comprehensive and transparent” KYC solutions, a critical component of their AML initiatives.

A separate report from CipherTrace further underscores this concern, indicating that among the top 120 crypto exchanges, one-third exhibit subpar KYC processes, and two-thirds are deficient in maintaining robust KYC policies.

The Role of KYC Solution Providers in Securing Crypto Exchanges

KYC solution providers help to authenticate business identities for crypto industries. They offer a range of services that encompass identity verification. The following identity verification methods are essential for crypto exchanges to stay secure and stable:

1. Document Verification: KYC solution providers enable exchanges to verify the authenticity of identity documents, such as passports and driver’s licences.
2. Biometric Authentication: Facial recognition technology ensures that the person submitting the documents is the same as the one in the ID.
3. Watchlist Screening: KYC solution providers allow exchanges to check users against global watchlists, identifying politically exposed persons (PEPs) and other high-risk individuals.
4. Ongoing Monitoring: Regularly updated profiles and transaction monitoring help exchanges identify changes in user behaviour that may indicate illicit activities.

Unlocking Efficiency with IDMERIT

There are several key strategies through which a crypto management platform can enhance security:

• Advanced identity verification
• Efficient onboarding process
• Ongoing monitoring
• Risk assessment tools

IDMERIT provides robust identity verification and Know Your Customer solutions. After harnessing these identity verification solutions, you’ll be able to manage custom workflows tailored to different usage scenarios and incorporate a range of verification methods to align with KYC methods. As a result, we not only guide in maximising conversion rate but also significantly enhance the efficiency of the verification pipeline.

If you’re interested in discovering how IDMERIT can assist you in achieving identity trust and security for your cryptocurrency exchange, please don’t hesitate to get in touch with us or join our community for a direct conversation with our product team. We’re here to engage in a discussion with you!

The post A Comprehensive Guide of KYC in Crypto Exchanges in 2023 appeared first on IDMERIT.

Contents

• What is an MRZ Code
• MRZ Verification to Combat ML-TF Threats
• What is MRZ in Passport
• MRZ OCR Data-Extraction Technology
• The Role of MRZ OCR in Identity Verification

What is an MRZ Code?

An MRZ code is the last two-three lines in the ID document that encrypt an individual’s data. The technology mainly relates to immigration security checks and is found in travel documents such as passports and visas. The machine-readable characters in the Machine-Readable Zone (MRZ) transmit the value, also called checksum, decoding the personal data for identity validation and security checks.

The machine-readable area in the document decrypts the value or checksum using Optical Character Recognition (OCR) conversion technology to verify the personal data against the government-issued database. Also, this time plus resource-saving technology detects fake digital or physical ID documents by scanning photos and live-stream images in real time.

MRZ Verification to Combat ML-TF Threats

In the 1980s, growing trade and technology made global countries more interdependent on one another, and the volume of international travelers started rising manifold. At the onset of globalization, an imminent requirement to reshuffle the identity verification process for foreign travelers was sensed worldwide. During this period, machine-readable passports were introduced, and eventually, the MRZ code became a recognized international standard in travel ID formats.

Again, be it for business or leisure, tour & travel is a billion-dollar industry today. So, not only at airports and border security customs, but passport verification is also crucial at hotels, casinos, tourist amusement spots, health centers, shopping, rentals, and tourist checkpoints.

MRZ code passport verification helps the travel industry conform to anti-money laundering and counter-terrorist financing regulations, non-compliance of which may cause the entity to pay off hefty fines or to serve a jail term.

MRZ readable passport authentication helps businesses avert –

• processing sanctioned transactions
• booking or arranging travel to restricted places
• booking flights for sanctioned individuals or alleged terrorists
• high-risk individuals from booking flights, hotels, etc.
• prolonged awaiting bookings for genuine travelers

What is MRZ in Passport?

Nowadays, all nations have machine-readable passports, as passport verification is considered the most standard background check method to meet the stringent immigration regulations that the major international governments have adopted.

The passport identity page has two parts; the Visual Inspection Zone (VIZ), with the photo and personal details of the passport owner mentioned in a way comprehensible to a human. At the bottom of the page, the Machine-Readable Zone (MRZ) is encoded with personal details readable only to a machine.

Machine-readable passport technology is extremely efficient, and MRZ code passport verifies all vital details like name, age, address, nationality, originality, etc., with high-level precision and reliability.

MRZ OCR Data-Extraction Technology

The MRZ data extraction technology is based on the Optical Character Recognition (OCR) system to decrypt the MRZ code. Upon scanning the machine-readable area, the OCR pulls the data in readable form to verify it against government-issued and approved identities.

• The MRZ OCR engine automatically scans and extracts a person’s data on a machine-readable area.
• The scanned MRZ image is uploaded to the OCR engine to convert to a TXT file.
• The OCR Machine Learning algorithms convert the TXT file into structured JSON format.
• The entire process parses the Machine-Readable Zone (MRZ).
• Finally, the decrypted information can be verified against government-approved databases.

The Role of MRZ OCR in Identity Verification

MRZ-based ID documents have an added advantage in verifying identities with greater speed and accuracy. Still, to make the most of this technology, financial and regulated businesses must choose a robust MRZ recognition technology for secure and frictionless customer onboarding.

IDMERIT extends the best-in-class bank-grade Identity Verification solutions based on MRZ OCR Machine Learning technologies. IDMscan and IDMkyc are flagship IDMERIT products that exploit Artificial Intelligence and Machine Learning inventions to offer AML-CFT solutions with full precision and reliability.

If you are a financial or obligated non-financial entity looking for an effective and steadfast MRZ OCR solution for verifying your customer identities, contact the IDMERIT Identity Verification consultant to get an MRZ OCR engine demo with product consultation.

The post What is an MRZ Code? The Role of MRZ Technology in Identity Verification appeared first on IDMERIT.

This piece of content helps one determine how to identify a fake id and understand a fake ID vs. a real one by correctly examining fake ID samples. The content accentuates how financial and obligated entities must opt for advanced ID verification services to stay ahead in the fight against money laundering and terrorist financing.

Content

• How to Spot a Fake ID
• Probing Fake ID Samples
• Fake ID Vs Real
• How to Identify Fake Driver’s License
• ID Verification Services for Regulated Sector

How to Spot a Fake ID

Identity theft, identity fraud, and document forgery are widely spread money laundering and terrorist financing threats that are difficult to combat without applying AI-ML tools and human expertise in unison. Nonetheless, it is difficult to overlook that today’s fraudsters are equally well-equipped, and government-issued IDs are copied, forged, counterfeited extensively, and misused for e-commerce theft, payment fraud, smuggling, and other crimes as serious as human trafficking, terrorism, and mass proliferation of weapons.

On the face of it, it is on the part of individuals and entities to opt for efficient tools during customer onboarding, performing crucial transactions, and other business activities. In the next point, we’ll discuss how to check for fake IDs accurately alongside fake ID samples.

Probing Fake ID Samples

Comparing fake ID samples with real ones significantly helps to determine typical fake ID examples and get striking clues of forged, altered, and stolen ID documents.

Understanding the following loopholes is vital to learn how to check for fake IDs and government-issued documents.

• Missing exactness in the format
• Inaccuracy in font styles and font colors
• Creased edges or broken edge recognitions
• Forged documents, photoshopped images, and prints
• Tempered images, blurred spot detections
• Compromised holograms or rainbow prints
• Blurriness or exposure in the prints, images
• Misplaced laser perforation

Fake ID Vs Real

Criminals invest much money in creating forged IDs to scheme fake identities and to perform illicit activities. Identity forgery scams involve sophisticated front and back forgery of document IDs. With easy access to technology, miscreants would fake images, personal information, and barcode encryption, to the degree at which distinguishing fake ID vs real is only possible with efficient AI-based Machine Learning tools and algorithms.

On the other hand, businesses selling age-restricted products and services often face situations where underage shoppers alter their IDs to buy alcohol, cigarettes, and other adult products. At the same time, card hackers exploit stolen ID data in case of e-commerce robbery and transaction laundering.

How to Identify Fake Driver’s License

For instance, a driving license is a widely used identity verification document accepted for customer onboarding. Let us specifically explore how to identify a fake driver’s license. A few salient aspects include the flag image, national ID number, language, photo position, background pattern, signature, hologram, and identity information. There is an all-inclusive way of accurately understanding how to identify a fake driver’s license without overlooking the important checkpoints.

• Date of issue and date of expiry
• License issuing authority
• Driver registration number
• Card holder’s signature and address
• Licence entitlements
• Hologram on the card, nation-specific
• Codes, pictograms, and background form
• Missing laser engravings

ID Verification Services for Regulated Sector

Safeguard your business against identity fraud and identity theft; prevent forged, altered, fake identity approvals and save your business from hefty fines with IDMERIT’s best-in-class ID Verification Services.

For questions on how to check for fake IDs to prevent huge noncompliance penalties linked to fake and unscrupulous identity approvals, contact IDMERIT IDMscan consultant to get a live demo on biometric facial recognition, deepfake detection, and face liveness verification tools and techniques.

The post How to Spot a Fake ID: Understand Fake ID Vs Real appeared first on IDMERIT.

• Why is Automated Identity Verification in Payments Important
• Merchant Underwriting and Merchant Identity Verification Checks
• Risk Automation in Payment Processing
• Merchant Due Diligence in the Payment Sector
• AML-KYC consultancy helps payments stay compliant

Payment sector ID verification automation is about balancing the risks and revenues, i.e., abiding by the AML-KYC regulations without merchant abandonment hurting the bottom line. Today, payment automation has invigorated the mass-merchant onboarding process, and the robotics techniques have been fast evolving to offer improved user experience to onboarding merchants per diem.

To avoid monetary fines and reputational loss, organizations are advised to opt for automated identity verification in payments which is vital to blocking bad merchants, with malicious intentions, from doing business.

Why is Automated Identity Verification in Payments Important

As per the international AML-CFT guidelines set up by FATF and other similar rule-setting bodies, all financial and regulated sectors, including payments, must obey the anti-money laundering and anti-terrorism regulations about Know Your Business (KYB) and Ultimate Beneficial Ownership (UBO) checks while carrying out business-to-business (B2B) operations.

The payment sector is a high-risk industry wherein high-risk merchant returns bring high-volume transaction processing. A few high-risk merchant segments include adult, travel, gambling, dating, CBD, subscription, brokerage, remittance, and collection agencies.

Robotics Processing Automation (RPA) in payments is core to speeding up merchant identity verification procedures. New technologies like Blockchain and Artificial Intelligence (AI) have brought automated KYC in payments. From performing KYC merchant onboarding to fulfilling merchant monitoring, mostly all due diligence techniques used today have been centralized, with single API integration. The development has drastically reduced the lengthy form-filling, allowing the payment risk department to seamlessly verify and monitor merchant activities.

Merchant Underwriting and Merchant Identity Verification Checks  

Recent upgrades in payment sector ID verification automation with pre-screening and compliance tools have made the merchant underwriting process more accurate and secure. Besides confirming business history and transaction volumes, certain business identity verification checks, such as validating operating nations, marketing channels, and product segments, are important pre-screening checks that can be achieved smoothly with AI-Machine Learning algorithms. Merchant identities are scanned against verified KYB database for Sanctions, Politically Exposed Persons (PEPs), and Adverse Media lists to ascertain the business is what it claims to be.

Thus, payment robotics helps the underwriting team set specific profile thresholds to segment the risk levels of the onboarding merchants. The consolidated risk level helps determine subsequent countermeasures and friction levels at the time of merchant onboarding.

Risk Automation in Payment Processing

The fact is that the onboarding and merchant underwriting processes can never be fully automated. There is always a certain level of manual AML verification procedures involved in payment processing. However, the risk staff can rely on a set of automation tools to gain an optimum level of accuracy while defining merchant risk profiles.

Identifying the operational model, analyzing the website, performing PCI-DSS compliance checks, merchant payment history checks, and underwriting credit risks are the core procedures in merchant payments that require human intervention in the process to a great extent. Fortunately, payment sector ID verification automation has succeeded hugely in merchant identity verification and KYC merchant onboarding procedures. Know Your Business (KYB), PEP risks, Sanctions, Adverse Media screening, and UBO checks are the main AML-KYC measures that can be performed with high-degree automation.

Merchant Due Diligence in the Payment Sector

Payment aggregators, payment service providers, and third-party payment processors all have one thing in common, i.e., they all deal with high-value transaction merchants. Hence, a holistic approach to automated identity verification in payments must go alongside other AML-CFT merchant due diligence practices in this sector.

Recently, third-party payment gateway and processor options have escalated money laundering to a new level, known as Transaction Laundering. To unearth the true identity of merchants, they must be continually monitored against their transaction patterns, business activities, and behaviors. Thus, payment sector ID verification automation must include monitoring transactions and filing Suspicious Activity Reports (SARs) to the state AML authorities for further examination.

AML-KYC consultancy helps payments stay compliant

Alongside PCI-DSS compliance, the payment processors, payment service providers, and payment gateways must inevitably follow AML-KYC compliance with automated identity verification in payments.

IDMERIT ensures world-class identity verification services to the payment sector. Learn more about automated KYC in payments and identity verification regulations in payments. We offer a free consultation with our IDMkyc compliance advisor for businesses processing large-volume merchant transactions.

The post Significance of Merchant Identity Verification Automation in the Payment Sector appeared first on IDMERIT.

Identity verification for the fintech industry has certain best practices to ensure a world-class automated customer onboarding experience without compromising the AML-KYC compliance of a fintech business. In this blog, we will read how advanced automation has changed the way fintech does business and performs its KYC checks securely and efficiently. The fintech industry segmentation is huge, with investment & capital, digital lending, ecommerce, data solutions, insurance & healthcare, and payments all falling under the scope of fintech.

The fintech industry has the highest number of start-ups today. Robotic Process Automation (RPA) in fintech helps companies speed up their remote onboarding process while strictly adhering to the fintech guidelines and regulations.

A Unified API System Approach for Fintech

Empowering Robotic Process Automation (RPA) in fintech is vital to maintaining a centralized system with a unified API for business operations. Gone are the days when customers had to wait for a month for their onboarding approval. To survive in the competitive market, automated client onboarding software fulfills the norms of KYC for fintech companies.

Client databases, document IDs, client profiles, and background sources are linked and stored strategically to perform frictionless multiple verification methods using a centralized API system.

Automated Customer Onboarding with Single Step Integration

Seamless customer onboarding steps should not come at the cost of risking the AML-KYC regulatory standards, or a fintech may have to pay hefty non-compliance fines to the authorities for such negligence. The user identity, individual or business, should be matched against strong and authentic datasets to assure compliance with the due diligence procedures.

An automated client onboarding software offers multiple methods of identity verification for the fintech industry with single-step integration. This state of art software comes with various inbuilt features, for instance, two-factor authentication (2FA) or a multi-factor authentication onboarding method. Identity checks are enhanced thru liveness detection, biometrics authentication, and facial recognition technologies.

A Tailormade KYC for Fintech Companies

Fintech trends are continuously changing. Industries must remain updated with the Robotic Process Automation (RPA) in fintech.  The robotic identity verification process for the fintech industry encapsulates various anti-money laundering (AML) and Combating the Financing of Terrorism (CFT) regulatory frameworks. Fintech businesses can leverage various tailormade and automated customer onboarding technologies to scale up their onboarding operations, combating regulatory and technological challenges.

It is on the part of the businesses to follow the national and international regulations and remain fully AML-KYC compliant. Customized automated client onboarding software has certain inbuilt features and is continuously upgrading. The core AML-KYC and Know Your Business (KYB) regulatory guidelines like FATF, GDPR, and international sanctions features are also ingrained in the software that must apply to businesses.

Audit Trail and KYC Automation in Fintech

Identity verification for the fintech industry not only means onboarding efficiency but also extends continuous transaction monitoring and performance of due diligence of the entire customer lifecycle. These transaction-monitoring red-flag rules vary from industry to industry depending on the nature and operational region of the company.

Monitoring client behavior and suspicious transaction activities also fall under this ambit—an ideal automated client onboarding software auto-generates red flags based on the scenario or pre-historical dataset model. And maintains an audit trail based on the client-behavioral patterns.

Fintech demands a mass user-onboarding process automation with the best UX-UI KYC verification interface to reduce friction at the minimum possible levels. IDMERIT extends KYC automation with IDMkyc and IDMscan products. We use AI Machine Learning technologies to verify identities against the most authentic databases. IDMkyb authenticates worldwide businesses to offer a secure merchant onboarding method for fintech enterprises.

The post Automated Client Onboarding and Identity Verification for Fintech Industry: Best Practices appeared first on IDMERIT.

BFSI ID verification automation is important to release banks of regulatory burden and avoid heavy non-compliance fines they often have to pay due to unmanageable workload and subsequent negligence in KYC risk mitigation procedures.

What are the main KYC Verification Steps in BFSI ID Verification Automation?

KYC automation in the BFSI sector is the need of the hour. Recently, the industry has witnessed an increasing number of financial crimes in the banking and insurance sector linked to converting illicitly gained money into legally acceptable forms. Let’s talk about the main BFSI Robotic Process Automation (RPA) processes that could make KYC verification steps in the BFSI sector time and cost-effective to a great extent.

Merging BFSI ID Verification Automation with Great Customer Experience

Low code automation to connect databases with technology is helping the banking and finance industry to create a user-friendly onboarding process for their customers. Today, every organization is seeking a competitive advantage over its equals. Financial organizations continually improve the customer experience while adhering to fraud mitigation and regulatory standards.

BFSI ID verification automation has helped banks to structure their various operations. Orchestrated data linked to various systems are processed and placed together in one securely accessible location. This system has accelerated commercial lending and onboarding processes as the bank employees get access to a 360° customer KYC life-cycle view and respond in real-time with minimal friction.

Fraud Risk Mitigation with KYC Automation in BFSI Sector

Financial crimes in the BFSI sector have come of age as sophisticated banking cons are untraceable, and today only 20-25% of the customers can recover the losses. Many fraud case studies have shown that the siloed data storage structure – in banks and conventional financial institutions – has made fraud risk mitigation cumbersome.

Even today, most financial organizations do not have a platform for a holistic view of customer data and life cycles. Finding suspicious behavior patterns for suspicious activity reporting (SAR) is challenging for the risk team. Effective deployment of a BFSI automation tool can stimulate SAR filings by tracking customer behavior in real-time and connecting the patterns with the data points to produce customer case management.

Many advanced automation tools auto-populate the SAR filings based on customer risk patterns and auto-generate the submission forms for timely inspections.

Accelerate your digital transformation journey with IDMerit customer onboarding and BFSI Robotic Process Automation (RPA) solutions. Learn more about automated KYC verification steps and book a demo to see how IDMerit flagship products IDMkyb and IDMkyc help businesses with KYC automation in the BFSI sector across various global industries.

The post Identity Verification and KYC Automation in the BFSI Sector appeared first on IDMERIT.

• International AML-CFT Standards
• The U.S. Bank Secrecy and PATRIOT Acts
• The U.K. POCA Act and FCA Compliance
• The EU AMLDs and eIDAS Guidelines
• COAF and BCB Identity Verification Compliance in Brazil

In the past two decades, the concepts like global AML regulations and identity verification compliance have begun to gain much attention, mostly in the wake of the 2001 United States terror attacks that brought in laws such as the US PATRIOT Act, making the identity verification of individuals and businesses compulsory as part of AML-CFT measures.

This article spotlights how international organizations like FATF, EU AMLD, and sanctions bodies like OFAC eventually became prominent with important overhauls in identity verification requirements for banks and regulated sectors to combat the growing nuisance of money laundering and terrorism financing.

International AML-CFT Standards

The Financial Action Task Force (FATF) is an international AML-CFT policy-making body that sets global AML regulations. The 40 FATF AML and 9 CFT Recommendations are the pillars of international AML CFT standards. The 40 FATF AML Recommendations comprise guidelines on customer identity verification, risk-based KYC, Sanctions, PEP, and confiscating of assets.

Alongside verification of individuals and entities, FATF underscores the gravity of transaction monitoring and setting up Financial Intelligence Units (FIUs) by each FATF member nation. The financial and obligated institutions must monitor their customer transactions in real-time and submit Suspicious Activity Reports (SARs) and Suspicious Transaction Reports (STRs) to the state FIU for advanced scrutiny.

To combat the growing money laundering threats at the onset of virtual assets/cryptocurrencies, FATF has set forth Crypto Travel Rule to ensure the origins and movements of virtual currencies/tokens are monitored to combat money laundering predicate crimes linked to anonymous crypto transactions.

In addition to FATF, other international identity verification compliance-setting bodies observe identity verification requirements in banking and financial institutions. These institutions are the Wolfsberg Principles, Egmont Group of Financial Intelligent Units, Basel Committee on Banking Supervision, and FATF local chapters known as FATF Style Regional Bodies (FSRBs).

The U.S. Bank Secrecy and PATRIOT Acts

In the United States, the 1970 Bank Secrecy Act (BSA) forms the core of AML-KYC compliance; over the years, the BSA Act has evolved from time to time. The two most important thresholds for AML reporting under the BSA mandate are the Currency Transaction Report (CTR) and Suspicious Transaction Report (STR).

In the United States, the US PATRIOT Act 2001 mentions the state’s identity verification requirements, such as the Customer Identification Program (CIP), Customer Due Diligence (CDD), and Enhanced Due Diligence (EDD) for individuals and organizations.

The Bank Secrecy Act (BSA) authorities work with the Office of Foreign Assets and Control (OFAC) to impose various domestic and international sanctions on individuals, trade, and organizations. On the other hand, the Financial Crimes Enforcement Network (FinCEN) acts strategically with the U.S. AML authorities to disseminate BSA regulations.

The U.K. POCA Act and FCA Compliance

In the United Kingdom, KYC, CDD, and Transaction Monitoring measures are the three-core AML compliance that regulated businesses must follow. Proceeds of Crime Act, POCA 2002 defines all money laundering predicate crimes in the country. Additionally, the Sanctions and Anti Money Laundering Act, SAMLA 2018, gives the U.K. AML authorities the right to impose prompt sanctions against non-abiding entities and potential high-risk individuals.

The Financial Conduct Authority (FCA) is an important regulatory body that sets and examines the banking and financial sector’s AML compliance program in the U.K. The FCA works with Her Majesty’s Revenue and Customs (HMRC) to set AML-CFT standards for all the non-financial regulated sectors in the U.K.

The EU AMLDs and eIDAS Guidelines

Within Europe, the European Union (EU) Anti-Money Laundering Directives (AMLDs) are followed by the member states. The EU AMLD sets shared AML regulations based on regional typologies, and these guidelines are mandatory for the member nations to comply. The EU AMLDs recommend important AML-CFT guidelines, including risk-based intelligence, virtual assets rules, Politically Exposed Persons (PEPs), bribery, and corruption measures.

The EU adopted eIDAS guidelines in 2014 to homogenize digital identification and electronic signature and to ease inter-European business processes. The electronic IDentification, Authentication and Trust Services (eIDAS) brings remote video identification compliance for digital reforms in the EU and establish the region as a ‘Digital Single Market’.

COAF and BCB Identity Verification Compliance in Brazil

Money Laundering crimes linked to narcotics trafficking have been extensively prevalent in Latin American nations. The Brazilian Central Bank (BCB) works with the Conselho de Controle de Actividades Financieras (COAF) in Brazil, the largest South American economy, to bring AML reforms. The COAF is the main AML-CFT authority in Brazil that guides identity verification requirements, sanctions, PEP, adverse media, and transaction monitoring compliances to the financial and obligated sectors.

To learn more about international AML-CFT standards and your industry identity verification compliance, you may contact our IDMerit AML-KYC compliance officer. Thousands of businesses worldwide use IDMerit products and services; we ensure our clients always keep up with the global AML regulations and remain AML regulatory compliant with national and international standards.

The post Major Global AML Regulations and Identity Verification Compliance appeared first on IDMERIT.