Know your customer (KYC)
Identity fraud, whereby an individual assumes either a false identity or that of a real individual, accounted for 47% of all UK fraud in 2010 (source: CIFAS), reinforcing the need for organisations to know their customers.
Anti-money laundering (AML) legislation and guidance also highlights that companies must make a concerted effort to be fully aware of who they are dealing with, to prevent their business being used for criminal activities.
As such, undertaking know your customer checks has become an everyday business activity.
For many organisations traditional identity checks are no longer adequate – paper id documents can easily be forged, storage of a manual paper trail is expensive and it is often just simply not practical - especially in the case of remote transactions.
Now, more and more businesses are turning to technology for solutions, adopting electronic identity checks as a means of verifying identity and satisfying know your customer requirements.
In the case of anti-money laundering, the Financial Services Authority (FSA) and Joint Money Laundering Steering Group (JMLSG) have noted that comprehensive electronic identity checks can provide the necessary verification levels needed to meet legal obligations.
If you are currently processing identity checks via an electronic solution for AML purposes, it is essential that the system you choose meets certain criteria, as advised by the JMLSG.
- Use a range of positive datasets, with the ability to link a person from current to previous circumstances
- Access negative datasets (such as gone away and mortality records) to protect against ID fraud
- Supply transparent processes which allow you to know what checks were carried out, the results of these checks and what level of confidence they supply
- Have facilities in place which allow you to capture and store identity checks and the data used to verify identity
Our IDU range of products includes IDU–KYC, a know your customer identity solution for fraud prevention purposes, and IDU–AML, a know your customer and due diligence system for anti-money laundering activities.
You can enjoy a free no-obligation trial of any of our IDU products – just contact us and we’ll discuss your specific needs.