How AI-based KYC Solution Help Businesses to Compete in the Market?

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Technological advancements bring many changes to our lives. It facilitates us in different ways by reducing our expenses as well as precious time to use various services. Now, we have become addicted to using more online services such as online shopping or education, etc. On the other hand, businesses also switch towards online services as it attracts more customers to buy their products. As soon as more businesses start to provide online services, online frauds are also increasing. Financial organizations are targeted more by fraudsters. They lose billions every year in online frauds and pay hefty fines for non-compliance with regulations.

According to Statista, 159.7 million pounds has been lost by banks in online frauds just in the UK. And if the data of all banks in the world are summarized, we come to know that only banks lose billions of dollars in the wake of online frauds and regulatory penalties. While the US ranked on top for non-compliance bank fines that are equal to €9.39 billion. Except that, money launderers are also there to harm financial institutions. 

If the situation is going like that then the banks and other financial businesses may lose their credibility and customers as well. There is a dire need especially for personal finance, banks, insurance companies, and stock exchanges to make robust security protocols to avoid financial crimes. The artificial intelligence-based KYC solution is perfect to combat this problem.

Anti-Money Laundering

The purpose of the AML is to frame the legal policies, rules, and regulations for financial institutions to prevent money laundering. Financial organizations need to meet all security standards led by FATF and other regulatory authorities to avoid online fraud. Know your customer is one of the essential components of KYC compliance for businesses. Let’s have a look at AML/KYC compliance.

AI-based AML/KYC Solution

AML/KYC compliance is necessary for all businesses to follow to curb money laundering and prevent hefty fines. AML/KYC legal requirements are changing over time and becoming more stringent to avoid financial loss. It’s not easy for businesses to comply with these regulations as it also demands money to spend on different activities and resources from organizations. Every financial business should follow the following standards:

Know Your Customer

In simple words, KYC ID verification confirms the customer’s identity to know his current status. It is mostly performed before opening a bank account by banks to check whether the customer is involved in any illegal activity or not. Many other businesses also need to perform the KYC process to avoid any loss along with financial bodies. It is the primary duty of all businesses to perform KYC to verify their customers.

A Delegated AML Compliance Official

Financial institutions need valid proof of all activities, so they should need an AML compliance officer to maintain the record of all AML processes. He is responsible for making comprehensive policies that should help businesses to comply with regulations. A compliance officer is responsible to perform AML screening on all customers including customer due diligence and enhanced due diligence to avoid any problem.

Ongoing Monitoring

It is also one of the important parameters to meet security standards to keep a check on the customer’s ongoing activities. It helps businesses to identify high-risk potential customers before onboarding to prevent any loss.

KYC Compliance

In KYC compliance, background screening and risk assessment of customers are performed to stop online financial frauds. It includes complete background screening that includes CDD, EDD, CID, and all other processes that are needed to fulfill AML regulations. AI-based KYC solution proves helpful for financial institutions to deter online frauds and money laundering.

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Conclusion

With the ever-changing demands of FATF and other financial regulatory authorities of the respective countries, AI-based KYC solution proves to be a helping hand to keep businesses up to date with updated regulations. It facilitates businesses to screen out the potential customers that are a threat to them. AI-based KYC solutions also assist financial institutions, such as banks to meet all security standards led by FATF and other regulators. By adopting an AI-enabled KYC solution, banks, and other financial organizations also avoid plenty of fines. It also helps them to make their services more secure and also engages customers towards them. In this way, the customer experience will also improve which adds up the integrity of their services. As a result, the brand image is also improved which gets a lot of Benefits of Brand Recognition for all businesses complying with security regulations.

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