In this era, especially millennials prefer to perform all tasks digitally; whether it is a doctor’s appointment or a transaction, people choose online mediums. The internet contains all the customers’ data; the hackers are experts in data breaches, and they decode the clients’ accounts and steal their information. They then use it for illegal activities or commit a crime in the user’s name. The client is sometimes even unaware that someone else is running their account. According to a report, between March 22 and 23, almost $11 million was lost due to data breaches. Therefore, businesses must comply with the biometric solutions to mitigate the data breach issues.
Importance of KYC
KYC authentication is done to verify the client’s identity, and it is performed to ensure that the same person is trying to access the account. Any irregular activity is immediately detected; the authorities are informed about the suspicious acts. Authentication is done online, so users do not have to visit the company. This verification is performed by different means such as face, sound, iris, and fingerprint. Document Verification is also done to ensure the customer is not involved in any illegal act; all the legal papers of the clients are adequately verified and matched with the government’s database.
Why do companies have to comply with the regulations?
The country’s economy also suffers when businesses, such as banks, face cybercrime and go bankrupt. Therefore, the regulatory authorities are driving ways to reduce such data breaches and preserve the companies’ credentials. For this purpose, the governments and regulatory authorities have developed KYC Compliance and regulations, and organisations must comply with these guidelines to reduce the risk rate. The KYC verification allows only verified clients to associate with the company while aiding businesses to get the entire user information through their authentication. They can know about the source of income and the clients’ activities; when such information about the client is known, the chances of getting scammed are also reduced.
How can companies reduce their penalties?
Organizations that do not follow the guidelines of the legal authorities have to bear heavy penalties. Therefore, companies must comply with the KYC verification to save their miscellaneous expenses and reduce unnecessary costs. The brand image is enhanced when the company is free from such penalties. The business can rank itself globally by improving its brand image and gaining more clients. In 2022, in Malaysia, an increase of 14.7% in cyber security measures was observed, while in Japan, 3.8% was decreased this year.
How can companies reduce the cyber crimes cases?
- Educate the employees
Organizations have to train their employees about the importance of the solution properly. It is the best investment, and the results of these verifications are promising. Therefore, companies must comply with KYC authentication to ensure a rapid rise in their sales.
- Conduct regular monitoring
Companies have to monitor their customer’s activity to observe their risk rate. During verification, the clients must submit their source of income; such documents are asked to ensure that the client is not involved in money laundering. The business has to check that the person is not politically exposed or not involved in any illegal activity.
- Onboard customers through verification
The company must onboard clients only after KYC verification so that only real customers can interact with the organisation. The companies can even know about their business partners and the other company’s products, services, and strategies. Understanding different companies and then performing any legal binding properly is always recommended.
- Install scanners in the offices
The organisation must integrate these solutions into the companies so that only verified clients are permitted to cross the particular territory, and the entry of wanted criminals and suspicious activity is prohibited. For example, the warehouse of the factories contains sensitive material; any kind of robbery in this area will cause massive losses to the company. Therefore, companies can install these scanners to monitor the activity of the employees in that area.
Surveillance is the fundamental right of everyone; therefore, companies must preserve the credentials of their clients. The business can retain its clients long-term; the satisfied users also recommend the company to others. The organisation that is integrating it efficiently, a significant rise in their revenue is observed. The developed countries are especially using KYC verification to mitigate fraudulent activities, data breaches and money laundering. The businesses that safeguard the users’ interests efficiently attract new clients; satisfied users also promote positive word of mouth.