The working of the fintech industry transforms the financial world by utilizing leading technologies. Till 2022, significant growth in this industry was observed, but after 2022, investment declined due to money laundering, illicit activities and other cyber scams. Almost 16000 incidents of cyber scams were recorded this year, And 700 cases were of small industries. The rising number of these cybercrimes has generated the urge to understand this industry thoroughly, drive the ways to safeguard the interests of the fintech industry and avoid all kinds of fraudulent activities. Electronic identity verification is used to control all fraudulent activities. It enhances the security of the companies, smooth onboarding of customers, continuous monitoring and user-friendly experience is provided by these solutions. A significant rise in the revenue of the companies that are correctly utilizing them is observe.
What is the Fintech Industry?
Companies are using the latest technology in their financial services to compete with traditional economic methods. This industry’s increasing demand has also invited scammers; they are coming up with new tricks and techniques to hack customer accounts. The fintech industry is expanding day by day; new challenges are also coming its way.
Companies must install E-ID checks to comply with the latest KYC and anti-money laundering regulations. This will save the company from heavy penalties and maintain the brand image. Electronic identity verification promises a good user experience, as clients prefer a company that keeps their information safe and secure, prevents fraudulent activities and wants robust interaction while maintaining fast speed simultaneously.
Essential Steps For Fraud Prevention in the Fintech Industry
Customer Onboarding
Comprehensive digital onboarding authenticates the identity of the customers, verifies the documents against trusted sources and matches them against the previously stored data. Online Eidv services ensures the user’s liveness, multi-step verification is involve, risk assessment is done, and it is checke that the data is correctly readable. Onboarding customers digitally saves time for both the company and the individuals. This accelerated transition of digital onboarding by using an E-idv service provider promises smooth and streamlined onboarding. Their verification involves multiple steps, which minimizes the risk of onboarding the wrong client; more than one-step verification increases the authenticity of this solution.
Continuous Monitoring
The Eidv process regularly monitors the client’s financial activity to check from which source the client earns money. They also certify that the customer is not involve in any illegal activity. This is done by taking users’ basis of income documents; continuous risk assessment minimizes the company’s risk. As the company will have complete information on the client, risk assessment is also use to maintain a relationship with customers.
Recording Suspicious Activity
Eidv solutions are use to record any suspicious activity of the user; when even the scanners notice anything irregular, they immediately inform the respective authorities.
Risk Scoring
Risk scoring prevents fraudulent activities; a statistical model is use to score the customers. They can check whether the transaction is risky and then take measures accordingly. Documents used to measure risk rate are residential address, IP address, geolocation, high-risk countries, and proxy use. Electronic identity verification is used for credit card fraud prevention and complete and up-to-date risk assessment to mitigate cyber scams. Customers are score against their risk rate; for example
0-50 No Risk Factor is found
50-75 Some possible factors are present
75-100 High-risk factors are present
Compliance with KYC and AML Regulations
For financial expansion, companies must have to comply with the latest regulations imposed by the government. When any company goes bankrupt, the country’s economy also faces loss. Therefore, some companies must follow the rules and regulations of regulatory authorities. Companies need to implement Eidv service provider so their international expansion is impossible, and they can not acquire new licenses. Electronic identity verification only allows a good user experience. It benefits companies and clients, preventing them from all kinds of financial scams.
Conclusion
Advancement in technology has gained the attention of scammers. Companies have to take measures to implement robust Know Your Customer and Anti Money Regulations without compromising the smooth customer experience. Electronic identity verification is use to mitigate the risk of financial scams, increase efficiency, and save time and capital for the company. Only verify customers will be allow to bypass the account; this has enhanced the security of the companies. Proper on-time risk assessment saves the company from future loss as the complete activity of the client is continuously monitor. It prevents companies from data entry errors, leading to better and more reliable compliance.
