Developing Identity Verification directly into Chance Supervision.

Financial institutions face constant pressure to adhere to regulatory mandates designed to prevent 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 may seem like an almost impossible task. However, those regulatory mandates also create many opportunities to boost efficiencies and save money. By integrating identity verification into the general risk management strategy, financial institutions can get to see substantial benefits for their bottom lines, customer service levels, and employee productivity.

What is 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 just a critical part of establishing a fresh relationship. True identity verification means reviewing the truthfulness of what a prospective customer discloses by screening the information against multiple sources, then analyzing the reality to ascertain whether a fresh relationship must be started. “Know your customer” has 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 important to financial institutions?

The increased role of the country’s financial institutions in securing the home front must not be undervalued. The point behind the USA PATRIOT Act is national security. No one will disagree that having a better comprehension of the consumer doing business at an institution provides increased security for the institution, its customers and the general public in general.
The danger for banks is more than simply monetary loss. Harm to a financial institution’s reputation created by noncompliance and the publicity surrounding terrorists opening accounts can result in lost confidence in the institution and significant lack of customers, sales, and revenue. Coping with negative publicity is just 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 take advantage of the USA PATRIOT Act?

Protecting Against Identity Fraud

Institutions need to prevent identity fraud while balancing the requirement 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 quite a significant factor 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 rather than manually researching identity information by calling references and checking websites.

Improving Customer Service

The consummate take advantage of integrating identity verification into an institution’s risk management strategy is just a higher degree of customer service.

From airline travel to school registration to doctor visits, society is accustomed to trading some privacy for the security of each individual and the country. However, customers do expect their financial institutions to protect 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 position to protect 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 about customers opening accounts
Verify that the customers are who they say they’re
Maintain records of the data used to verify their identities
Determine if the customers appear on any set of suspected terrorists or terrorist organizations(2)
You’ll find so many solutions to simply help banks implement identity verification programs to adhere to the regulations, always aiming to create educated and proactive decisions about customers. The USA PATRIOT Act regulations allow a documentary or nondocumentary approach.
Documentary Solution

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

Nondocumentary Solution

Since the enactment of the USA PATRIOT Act, technology has improved within the region 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 make certain consistency. Checking one source will not provide enough information, and there is no single database that features everyone residing in the United States. What this means is an institution must confirm that the name, Social Security number, address, and date of birth are valid and associated together using various data sources. If the data is unvarying throughout multiple sources, the institution will make an educated decision that it’s truthful. By utilizing identity verification technology, organizations might have the tools, not just to verify identity, but and also to screen against government lists and document transactions. Institutions can completely adhere to the regulations, while also realizing the advantages of protecting against fraud, increasing operational efficiency, and improving customer service levels.

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

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