Discipline Comes to Data Management: 6 Considerations for Effective AML Compliance

Data is everywhere. It is available from client onboarding, government agencies, credit bureaus, the internet, and social media. The challenge financial institutions face is not capturing data, but managing it. That means not only ensuring data is accurate, but also understanding how to update, share, store, maintain, archive, secure and analyze the information read more

Usage of a Customer Verification Tool

Customer identity verification is becoming more and more widespread with time. Verification standards are coming in handy, especially now that most businesses are selling their products online. Anti-money laundering (AML) and know your customer (KYC) are some of the standards that require identity verification worldwide.

Identity verification attempts to determine whether people are who they claim to be in online transactions. The primary reason for this initiative is to avoid fraud.

Every country has its own method of verifying identity. Some of the methods used in verifying identity include knowledge-based authentication, online verification and two-factor authentication.

Knowledge-Based Authentication

Knowledge-based authentication is one of the most popular methods in verifying identity. The method requires a person to answer a particular question to be allowed access to a specific website. The security question is unique to that person in that only they know the answer. Examples of these kinds of questions are your favorite pet’s name, your mother’s maiden name or even your first girlfriend’s/boyfriend’s name.

This method is pretty easy to understand for most people. However, the technique is vulnerable to security breaches since people can often find the answers to these questions through social engineering and social networks.

Online Verification

This method requires the user to verify whether the ID belongs to them. For the user identity to be confirmed, this method requires the user to take a photo holding the ID.

Online verification uses biometrics, artificial intelligence, human review and computer vision to conduct this process. The process is very secure, but some people consider it uncomfortable and intrusive.

Two-Factor Authentication

This verification method provides an extra layer of security. In addition to the username and password, two-factor authentication requires the customers to enter a code sent to them by the authenticating agency. This method is essential in resetting passwords and opening new accounts. However, in the two-factor authentication process, the users need to have their phones readily available to receive the code.

The usage of a customer verification tool is essential in building the reputation of a business. Customers feel safe using the online business platform knowing that no one else can access their information.

Read a similar article about age verification here at this page.