As your institution navigates the changing world of IT, you need a strategy to ensure effective IT management and a secure, compliant environment. A holistic strategy to strengthen your cybersecurity posture, plan for future needs and ensure alignment to your institution’s goals should include the creation of an IT Steering Committee read more
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Before the COVID-19 pandemic, our dependence on technology was already accelerating at an exponential rate. The socially distanced “new normal” we find ourselves in has only exacerbated this seemingly rapid transition to doing nearly everything online. Global reliance on digital payments has increased 50% for online shoppers since the start of the pandemic. And why shouldn’t it? Digital payment methods, such as e-wallets and contactless cards, are cleaner and more convenient than their traditional counterparts. But does convenience always translate to what’s safest?
As it turns out, online transactions and fraud are increasing at the same rate. With malicious bots and bad actors actively trying to exploit this new trend of consumers relying on digital commerce, understanding the importance of ID verification is critical. For starters, the demand to be able to open a bank account online has never been higher. But this soaring demand does nothing to diminish the need for financial institutions to take regulatory compliant security measures to protect their customers. These measures always include sufficiently verifying the customer’s ID before opening an account in their name. But how do you verify a remote face behind a digital screen? Online businesses often rely on ID verification services to smoothly facilitate this process and comply with anti-money laundering policies. Typically, if you are opening a bank account, you’re asked to provide your driver’s license and another valid form of ID. And while it’s pretty easy to spot a fake ID in person, it’s far more difficult to detect fraudulent documents online. An ID verification service bridges this security gap by comparing user documents against large databases and screening for irregularities that indicate fraud. In so doing, these services are validating the customer’s sensitive information while keeping it secure. It’s safe to say that these services play an essential role in reducing our chances of falling victim to identity theft. But they do a lot more than that. Automatizing the ID verification process also streamlines the customer experience. Manually navigating KYC procedures takes, on average, more than three weeks. But cutting-edge ID verification services can perform authentication in a minute flat. Banks save money by reducing human error and fraud, while customers can open new accounts and apply for loans more easily than ever before. ID verification is genuinely a win-win, and it’s here to stay. Read a similar article about KYC verification here at this page. PEP screening, or politically exposed person screening, is a necessity for financial institutions and banks. Careful screening helps these institutions see what level of risk a person might have for financial corruption and crime. But who exactly is eligible for PEP screening? Read on to learn more.
What is a PEP A politically exposed person is traditionally defined as someone with a political role or who has been entrusted with public functions. Because of this position, they’re at higher risk for money laundering, terrorism funding, and other financial crimes. It doesn’t mean that they’ll commit them, just that their role enables them to do this more easily or they have more potential to be exposed to the opportunity to commit these types of crimes. Who is Eligible for Politically Exposed Person Screening? Just saying someone who is in a political role or entrusted with a public function is a pretty loose definition. To find out if someone should go through politically exposed person screening, further risk assessment is required. Here are the most common categories for PEPs: Government Officials Current and former government officials, of both domestic and foreign governments, would be considered PEPs. This is the case whether they’re elected or unelected positions. Political Party Officials Officials who have roles in major domestic or foreign political parties can be classified as PEPs. Senior Executives Executives of government-owned commercial enterprises or international corporations could be considered PEPs. Relatives and Publicly Known Close Associates Immediate family members and publicly known associates of any of the above categories could be considered PEPs. Make Sure Your Business is Compliant If you’re a bank or financial institution, then it’s essential to stay on top of PEP legislation and find out what you need to do to stay compliant. Whether that’s using the latest politically exposed person screening software or making sure to train your employees on all the procedures of PEP, it’s important to mitigate risk for your institution so that things can’t fall back on you and so that customers who are PEPs can’t engage in illicit financial activity. Read a similar article about AML watchlist screening here at this page. As COVID-19 has accelerated digital banking trends, many institutions have pivoted toward digital transformation. However, in the digital lending space, slow-moving institutions still face a disadvantage read more
KYB Verification is an anti-money laundering compliance that entails verifying some critical aspects of an organization. Business registration and corporate licensing establish that the entity is legitimate from the very beginning.
Identification of All Directors and Other Authorized Owners As a general rule, to comply with KYB Verification, firms must identify a sample of corporate documents. They will demonstrate that all parties involved are legally authorized to carry out the business activity in question. Each business has to record its activity in company records for a specific period. It is, therefore, easier to track any changes in business details. These records are also helpful for AML Checklist screening. All businesses must undergo KYB verification after being duly registered with the government. Any individual who has any role in the business or manages these registered entities must undergo this process. Everyone who holds or authorizes an entity's registration number must ensure that it is always updated and properly used. The most effective way to verify the registration number is to use the AML Checklist. It helps screen all these individuals and entities to see whether they are correctly performing their KYB obligations. KYB verification plays a vital role in the prevention of fraud within financial institutions. All financial institutions must follow KYB procedures to the letter, and if any of them fail to do so, they should undergo severe penalties. As a result, it's been easier for the government to protect financial institutions against financial crimes. Fraudulent activities in the financial sector have increased in recent years due to the advent of enhanced technology. Thus, banks and other financial institutions should take the verification procedures adopted by them seriously to curb this growing financial crime problem. Also, the organizations need to update their KYB control lists regularly. Staying updated ensures that they are on top of the list of those who failed to comply with KYB norms. Read a similar article about know your business verification here at this page. When 2020 ends, expect to hear a collective sigh that this most unprecedented and challenging year is finally in the rearview mirror. However, the end of the pandemic isn’t tied to a date on the calendar read more
One of the biggest challenges facing high growth businesses is how to scale their security and compliance processes. One of the best ways to keep tabs on if your users are engaging in bribery and corruption crimes is through the process of PEP screening. But what is the importance of this kind of screening and how does it work? Read on to find out more.
What are PEPs? PEPs are known as Political Exposed Persons, and they’re typically considered as high-risk customers compared to ordinary civilians. This is because their connections allow them a great opportunity to engage in crimes of corruption or bribery. Businesses and especially financial institutions need to identify these users as PEPs and assess their risk. This is known as PEP screening. Why do PEPs Need to be Identified? Bribery and corruption crimes can have detrimental side effects, and businesses have to control and regulate the transactions of PEPs or they might be on the hook for failure to meet compliance standards. Besides the purely legal implications, crimes such as money laundering, terrorism funding, and more can occur if these things go unregulated. Utilizing PEP Screening In Your Business There isn’t one end all be all standard for PEP screening, therefore there are a variety of different solutions out there for businesses and organizations to utilize. With that being said, there are several agreed upon standards that help businesses to identify PEPs and screen them as effectively as possible. First and foremost, basic data collection to be scanned in a database is necessary. Here is the typical information that needs to be collected from a PEP:
PEP screening needs to be done periodically to be effective, and organizations should seek to have measures in place for identifying new PEPs, scanning existing PEPs, assessing their risk levels, and training their employees to carry out these procedures efficiently. Ultimately, the onus is on the organization to create and optimize their screening process. By being diligent, these types of organization can avoid complications and PEP-related crimes happening under their watch. Read a similar article about ID verification service here at this page. Community banks and other smaller financial institutions need to recognize one of today’s most troubling cybersecurity issues—synthetic identity fraud. Traditional identity theft is bad enough, but synthetic identity fraud affords criminals even greater access to money that doesn’t belong to them. As a result, it’s time to learn how this financial crime is carried out, why it’s growing and how your institution can help stop it read more
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AuthorEldon Broady writes about identity verification and business verification service. Archives |