How to prevent fraud by verifying your customers?

Within companies there is an infinite number of risks that we must be aware of in order to address them and avoid present and future threats. While it is true that the problems faced by each company are different, it is also true that there are common threats that constantly beset the vast majority of organizations and that can have serious consequences.

To address these threats, there are a growing number of tools that help improve risk management strategies, while speeding up and automating the process. One of these tools is the Know Your Client(KYC) process which assists your company in the process of verifying and validating customer information to determine if it is a risk to your organization. If you want to know how you can use this tool to prevent fraud in your company, here we explain it to you.

How does the KYC process work?

KYC is a digital tool whose main function is to be able to access the databases of different institutions in order to quickly find and validate all the information linked to a person, this in order to better know your customers.

This way you can verify their identity and know if they are under investigation for any crime, as well as know the legitimacy of the resources with which they acquire your services and their partners, since this tool not only applies to customers, but can also be used to investigate business partners and suppliers.

What is the point of verifying customers?

Verifying customers is important for companies regardless of their size, since this verification is a support for the company and its image, helping to identify customers and avoiding being related to financial crimes and terrorism.

Similarly, there are companies that are required by law to know and verify their clients, since their companies carry out “vulnerable activities” that can be targeted by organizations dedicated to money laundering, fraud and other crimes.

Some of the vulnerable businesses and activities regulated by the law in this regard are as follows:

• Banks.
• Investment Fund Operating Companies.
• General Warehousing.
• Exchange Houses.
• Investment Advisors.
• Financial Technology Institutions.
• Real estate construction, development or marketing services.
• Transportation and custody of money or securities.
• Games with bets, contests and raffles.

So how does KYC help prevent risks?

Knowing the people who hire your services helps to strengthen your risk prevention strategies by being able to quickly verify the identity of your clients and their documents, as well as the identity of the people who hire your services. Review of Blocked Persons Lists (69B SAT, UN, FATF), Identification of Politically Exposed Persons (69B SAT, UN, FATF), Identification of Politically Exposed Persons (69B SAT, UN, FATF). and whether your organization complies with legal regulations.

This prevents customers from using your platforms to commit crimes and maintains your company’s credibility and trust in the eyes of your customers and other institutions.

Learn more about how to implement the most agile data verification tools in Latin America, fill out the form and an executive will contact you.