Document Verification Service | Reduces Identity Fraud in the Banking Industry

Today’s businesses are diverting from the age-old norms and accepting cloud-based technology in all departments. This provides efficiency in the system and simplifies user onboarding. Although, this convenience opens the door for imposters to exploit vulnerable users. That’s why document verification is crucial to combat fraud and ensure compliance in the banking sector. Client reliability and trust are essential in banking. Therefore, a robust document verification system must ensure that confidence remains intact.

Regulatory Requirements for Identity Documents

Financial organizations and firms must comply with industrial regulations when documenting attestation on their customers. For example, the BSA (Banking Secrecy Act) and the USA Patriot Act need banking institutes to recognize and verify their users. Likewise,  the FinCEN Rule and 5AMLD (5th Anti-Money Laundering Directive) adjusted the identification and attestation of beneficial ownership. 

Other than this, banking firms should keep an eye on their current client by considering the dynamic nature of document authentication. 

When such company restrictions occur, manually performing present and ongoing checks becomes nearly impossible. Hence, it becomes necessary for banks to provide cloud-based document verification processes to ensure tax compliance with advanced regulations.

Moreover, these systems can maintain a log of these checks by performing online document verification with less human intervention. Hence reducing the requirement for the maintaining of bundles of files is necessary. These digital logs permit the system to check the traditionally verified individuals continuously. 

Significance of Verify Document to Combat Fraud

Document fraud is the most trusted and prevalent technique of imposters. The US government has generated trillions of checks to aid the public in staying afloat since the pandemic of COVID-19. Although, bad actors abused the situation by hindering the checks. 

Imposters clear the checks, fill them with fake identities, and then cash them. In 2021, 250,000 checks were scammed, according to a CNBC report, and by 2022, banks saw a surge in them by 84%. Therefore, these hefty values highlight the significance of document verification services in fraud mitigation. Authentic document attestation and verification aid the banks in keeping an eye on imposters without hiring further resources. The cloud-based verification services help eradicate manual human error, thus keeping institutions more aligned with the compliance guidelines and regulations.

  • Secure Sensitive User Information

The KYC and AML rules require banks and other financial organizations to maintain a data warehouse of sensitive client documents. However, keeping this data secure comes with its own pre-defined set of instructions and rules. The General Data Protection Regulation (GDPR) overlooks data-related complex issues in Europe. Moreover, it’s permitted to penalize the firms when a client data breach happens. Likewise, the FTC regulates user data privacy in the US. Recently, the FTC has given an order to  Ed Tech service provider to strengthen its safety practices. 

It’s imperative to keep a proactive method for private client data by giving such restrictions and cases. That’s why enterprises and corporations should look for document verification services that abide by the safety guidelines and procedures of regulatory authorities.

Crucial Areas for Document Verification Service in the Banking Industry

Following are the document verification service that quickly benefits the banking sector: 

  • Driver’s Licence: 

The crucial document of ID verification is the user’s driver’s license.  A cloud-based system verifies the copy against tampering and forging, minimizing fraud possibility. 

  • ID Card Verification:

First of all, banks verify the client’s identity. Traditionally, it needs a tedious ad-hoc procedure without any guarantee of accuracy. Therefore, a document verification service ensures the credibility of an ID document by analyzing the safety features and other essential ID details. 

  • Bank Checks 

Since the pandemic, there has been a raise in fraud attempts.  So, to reduce these rising attempts of illegal activities, banks purchase document verification services to lookout for these imposters. Therefore, such proactiveness is nearly impossible in a conventional procedure. While on the other hand, document checking needs fewer human interventions to operate accurately, ensuring less risk of rising fraud. 

  • Age Verification: 

Proper age verification ensures regulatory compliance of banking users. Moreover, document verification extracts data from documents and compares it with manually entered information for better accuracy. 

Final Verdict 

An authentic document verification process in the banking system helps mitigate fraud and ensure regulatory compliance. Financial organizations reduce costs by enforcing an authentic system as traditional procedures are no longer needed. Whether it’s a bank or ID check verification system, a system ensures safety around all verticals. Hence, strengthening the client reliability and trust- the essential pillars of banking.