Fraud risk is the likelihood of an organization or business being subject to fraudulent activity. Banks and retailers use several methods to prevent fraudulent activities. To mitigate any fraud risks and be AML compliant, you need a fraud prevention team to stop cybercriminals from accessing your system and data. This fraud prevention team is responsible for vetting all processes to ensure no internal leaks or external threats can hurt your organization.
That said – there are modern and unique fraud risk management solutions that every financial institution and retailer should have in place.
Mobile Facial Recognition Tools
Mobile facial recognition is a tool that uses smartphones and biometric software technology to verify a person’s identity by analyzing their unique facial features in a live photo.
IDaaS platform relies on mobile technology and anti-spoofing liveness confirmation along with biometric matching technology to match a customer's selfie with the picture already present in your database. This helps mobile facial recognition verify the person's credentials at the end of the online transaction. This is an effective method when it comes to fraud risk management. Mobile facial recognition technology will help you confirm that the person attempting an online transaction, applying for a loan or a new credit card is the same person on the ID card.
Ipsidy Proof delivers a trusted ID verification tool for the remote onboarding of employees and customers worldwide. Ipsidy's IDaaS mobile facial recognition platform harnesses mobile technology and anti-spoofing techniques with biometric matching to confirm each customer's credentials. Not only does it speed up your customers' conversions but also weed out any potential fraudulent accounts.
In addition to fraud risk management, mobile facial recognition tools can help prevent identity fraud, strengthen user ID authentication, streamline user onboarding and more.
Person-not-present in the banking industry refers to instances where a customer is not physically present for the transaction. This typically occurs with online banking scenarios such as filing an online credit card application, loan application, and mobile banking actions such as online transfers, shopping, and account logins.
That said, it is important to make a clear distinction between “person not present” and “card not present” terminology. “Person not present” is an instance when a customer is not present and conducts business online without a bank or an organization knowing who is on the other end.
Having a system in place that can combat fraud both in a remote and in-person environment is critical to ensure the protection of your business. Remote ID authentication solutions can be one method of ensuring you are catching fraud in real time.
Risk Analysis Software
Risk assessments generate a level of risk and are a critical aspect of a strong fraud risk management strategy. A KYC risk rating is a straightforward and simple calculation of risk. The risk may be a certain customer, or a company can face a risk-based on its entire clientele’s portfolio. Most businesses focus and calculate both, as both of them are equally important.
Once you have built up a portfolio, if the individual is deemed high risk, you can either choose not to move forward with their business or monitor their account closely. While this doesn’t necessarily mean you can disregard low risk accounts, it ensures you are devoting the most resources to protecting your assets.
Some patterns of behavior that can help identify high-risk customers include:
Customers links to high-risk countries
Customers belonging to the high-risk business industry
Unusual account activity
Lack of lawful or obvious economic purpose
The customer is a Politically Exposed Person (PEP) or a relative of PEP.
Accounts of businesses with cash-intensive activities such as bullion dealers, real estate developers and jewelers, etc.
With a good KYC risk assessment system or software in place, you can stay AML compliant and reduce the risk of fraudulent activity.
AML Compliance Program
Anti-Money laundering regulations, or AML Compliance regulations, for financial institutions and banks are the rules to eliminate terrorist and money laundering activities. Initially, the AML compliance program was only for financial institutions and banks to control drug trafficking. Now it covers all financial transactions globally.
AML compliance and counter financing of terrorism (CFT) are a global concern now. Domestic and international authorities such as FATF, World Bank, FINCEN, and FINTRAC are quite unforgiving towards non-compliant organizations.
There are different types of AML compliance regulations retailers, and banks must keep in mind at all times including:
KYC Authentication steps - this includes Customer Due Diligence, Enhanced Due Diligence and customer identity verification
Hiring an AML compliance Officer - helps your organization deal with violations, legal issues, and internal policies.
Set up an identity verification system - ID authentication solutions can help confirm the identity of the individual attempting to open an account
ID Authentication Software
One of the best ways to protect your organization from fraudulent and money laundering schemes is to invest in effective ID authentication platforms. However, you must ensure that the platform offers the highest level of accuracy possible. Intellicheck, for example, is one of the most effective ID authentication solutions available.
While other ID scanning solutions can display information on your POS system, Intellicheck can authenticate customers' IDs with 99% accuracy in real-time. Intellicheck’s ID scanning solution tells you, within seconds of scanning their ID, whether you should even bother funneling somebody through your AML compliance practices.
ID authentication system will strongly support other ongoing efforts within your organization by ensuring that any individual is who they claim to be. Additionally, Intellicheck’s ID authentication solution can easily be adapted to a remote environment allowing you to work with higher confidence.