With many people now preferring the use of digital platforms to do their financial transactions, the need for online monitoring and security continues to increase. Without transparency and legitimacy, an individual can fall victim to fraudulent activities like money laundering, identity theft, and bribery. This is why most governments have required their countries’ businesses and financial service providers to incorporate customer identification in their processes using Know Your Customer (KYC) verification.
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What is KYC verification?
KYC verification is a technology that helps institutions around the world determine their clients’ risk profiles and ensure that they are who they say they are. The process involves different methods, including facial recognition, document verification, and biometric verification. In the banking sector, for instance, customers must complete the steps of the KYC process before they are allowed to open an account or make an investment. Data processed into the bank’s system are then compared with the client’s information during the financial transaction to prevent fraud.
KYC verification has long been used for opening bank accounts, only it is performed manually. Clients are required to submit their information which is reviewed and authenticated by staff. Today, KYC verification is easier and faster, as it is done through a biometric system. Thanks to a more advanced artificial intelligence technology, customers can now have access to the complete list of services offered by a financial institution or business in just minutes, if not seconds.
The advantages of KYC verification
KYC verification provides a higher level of security than other processes like PINs, passwords, and email addresses. This is because it cannot be hacked using social engineering techniques. With the KYC technology, institutions can track every client’s activity, both past and present, and identify if one is a fraudster. Furthermore, customers with a record of wrongdoings can be blocked from making any transactions, reducing an institution’s exposure to fraud and preventing its unwarranted participation in criminal activities.
PetsForHomes uses KYC verification to increase security
Because of its efficiency, the KYC verification process has spread beyond the financial and banking sectors. Law enforcement firms, for one, now use facial recognition to distinguish reliable individuals in large crowds. Similarly, corporations use biometrics to allow individuals access to their buildings.
Last July, Sydney-based PetsforHomes launched its KYC verification tool for animal breeders. PetsforHomes is an Australian site that lists pets for sale; it aims to protect potential animal buyers from being duped into depositing money to fraudulent accounts and prevent the information of legitimate breeders from being stolen.
According to PetsforHomes PR Manager Kate Teng, implementing the KYC verification is another step the site is making to increase transparency within the pet community and ensure that buyers won’t fall victim to a fraudulent breeder.
Teng said, “Our hope is that puppy farms and identity thieves will no longer be able to hide.”
True enough, most online pet community sites do not manage the transactions between breeders and buyers. They are often free and do not require identity verification. This is why fraudsters are able to steal the information of a reputable breeder, open a fake account under the latter’s name, and appear legitimate. Monetary transactions usually happen off-site, making it easier for fraudsters to run away with a buyer’s entire deposit amount and abandon the account. Meanwhile, the legitimate breeder, whose information has been stolen, is left to blame for a scam transaction.
With PetsForHomes now using the biometric KYC verification tool, reputable breeders can rest assured they are protected. All they need to do is upload their identification into the site’s system and have their information and photo verified. Once verified, the breeder will receive a Breeder Verification Badge that they will display on each of their adverts so that buyers will know that the former can be held accountable should they engage in any fraudulent transaction. Finally, the site will connect the breeder to potential pet buyers throughout Australia.
