Adding Identity Verification in to Danger Administration.

Financial institutions face constant pressure to conform to regulatory mandates designed to stop identity fraud and money laundering while still delivering excellent customer care, watching bottom-line results, and meeting business objectives. In today’s complex business environment, this may seem like a nearly impossible task. However, those regulatory mandates also create many opportunities to improve efficiencies and save money. By integrating identity verification into the overall risk management strategy, financial institutions can expect to see substantial benefits to their bottom lines, customer care levels, and employee productivity.

What’s identity verification?

Identity verification is defined as “the process of using claimed or observed attributes of someone to infer who the in-patient is.”(1)

For today’s financial institution, identity verification is just a critical part of establishing a new relationship. True identity verification means reviewing the truthfulness of exactly what a prospective customer discloses by screening the info against multiple sources, then analyzing the important points to determine whether a new relationship ought to be started. “Know your customer” has been promoted within institutions as a sign of personalized customer care; however, with the enactment of the USA PATRIOT Act regulations, identity verification has become the difference between success and failure in the ever-changing financial services market.

Exactly why is identity verification crucial that you financial institutions?

The increased role of the country’s financial institutions in securing the house front mustn’t be undervalued. The purpose behind the USA PATRIOT Act is national security. Nobody will disagree that having a better understanding of the customer working at an organization provides increased security for the institution, its customers and the public in general.
The danger for banks is more than simply monetary loss. Injury to an economic institution’s reputation produced by noncompliance and the publicity surrounding terrorists opening accounts can cause lost confidence in the institution and significant loss of customers, sales, and revenue. Recovering from negative publicity is just a long, difficult, costly process.

Compliance can not be ignored because penalties for noncompliance are severe. Regulatory penalties for the USA PATRIOT Act and OFAC regulations can range between $10,000 to $1 million per infraction.

Just how can an economic institution take advantage of the USA PATRIOT Act?

Protecting Against Identity Fraud

Institutions need to stop identity fraud while balancing the necessity to protect customer information with a customer’s requirement for quick, efficient service. Identity verification is clearly a first step in reducing the opportunities for fraud and taking action 안전놀이터. Stopping the “bad guys” from opening a new account at an organization is the easiest and most cost-effective way to reduce a bank’s burden. That’s how “knowing your customer” can help–if identity verification becomes the main defensive measures within the overall risk strategy, it could be a significant aspect in preventing fraud.

Increasing Operational Efficiencies

The USA PATRIOT Act has driven financial institutions to review 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 amount of customer service.

From airline happen to be school registration to doctor visits, society is used to trading some privacy for the security of every individual and the country. However, customers do expect their financial institutions to safeguard their identity information and their fiscal assets. Identity verification programs allow new accounts to be opened quickly, creating a positive experience for the customer while showcasing the methodology the institution has in place to safeguard 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 are
Maintain records of the information used to verify their identities
Determine perhaps the customers appear on any list of suspected terrorists or terrorist organizations(2)
There are many options available to greatly help banks implement identity verification programs to conform to the regulations, always aiming to produce 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, an employee will look at a driver’s license or passport to begin account-opening procedures. Institutions are relying on driver’s licenses and passports to be valid, but with the recent increase 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 method of integrating a CIP into an institution’s risk management strategy. Additionally, identity verification technology gives an organization a cost-effective tactic for keeping up-to-date with ever-changing regulations.

For true identity verification, it is important to screen presented data against multiple independent sources to ensure consistency. Checking one source won’t provide enough information, and there is no single database that features everyone residing in the United States. This implies an organization must make sure the name, Social Security number, address, and date of birth are valid and associated with one another using various data sources. If the information is unvarying throughout multiple sources, the institution could make an educated decision that it’s truthful. By utilizing identity verification technology, organizations may have the tools, not just to verify identity, but also to screen against government lists and document transactions. Institutions can completely conform to the regulations, while also realizing the advantages of protecting against fraud, increasing operational efficiency, and improving customer care levels.

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