Insurance companies open opportunities for the customers by providing them a variety of financial services that could aid them in the future. From life insurance to vehicle and education insurance to health, insurance companies have a set of rules and standards on which they operate. Just like banks, insurance companies are required to perform due diligence on the customers. As banks identify and verify the identity of their customer at the time of onboarding, insurance companies need to do the same to prevent the risks of fraud and payment scams. This is important to identify the customer base they are facilitating and reduce the financial crimes.
The world is getting digitized at a high pace. With this, banks and financial institutions like insurance companies are also providing their customer with digital financial services. Now instead of physically visiting the branch, the customer can create an account in the bank online. When it comes to identify the customers and verify their identity, digital insurance platforms face many challenges. As identity verification is a regulatory requirement therefore, it is crucially important to welcome only honest identities before onboarding them. Online identity verification covers both Know Your Customer (KYC) and Anti-money Laundering (AML) compliance that can be well-achieved by the online industry using online document verification.
Adoption of Innovative KYC Solutions
Innovative KYC services in the form of online document verification can be employed by insurance companies. Document verification services are based on strong underlying technologies that are built on Artificial Intelligence and Machine learning algorithms. For example, Optical Character Recognition (OCR) technology is used in document verification that extracts the information from documents. In real-time, information is extracted and verified within seconds.
Identity verification ensures that companies do not facilitate bad actors. The online user is asked to upload the official identity document against which the credibility of a person is checked. The identity documents against which identity verification can be performed includes ID card, driving license, credit/debit card, and passport. By uploading any of these documents, the information is extracted and verified within seconds.
Mitigating Fraudulent Entities
Document verification solution helps identify the fraudulent actors that perform malicious activities such as money laundering and terrorist financing by screening the individuals against the global watchlists, sanctions lists, and records of Politically Exposed Persons (PEPs). Identity screening against all these lists helps insurance companies mitigate the risk of fraud by ensuring a secure environment. Ongoing AML screening filters out the bad actors participating in the system.
Ensure KYC and AML Compliance
KYC, AML and Combatting the Financing of Terrorism (CFT) compliance is compulsory for insurance companies. All these regulations serve the purpose of eliminating the bad actors from financial systems as they conduct various crimes that vary from cybercrimes such as identity theft and account takeover fraud to even severe, money laundering. Using online document verification service, he insurance businesses can ensure regulatory compliance, security and a clear customer base. Hence reduce the fraud-rate and regulatory penalties on the go.
To conclude, document verification service employs strong technologies and algorithms that ensure user experience as it will take only seconds to extract the information and verify it as well as the security of the platform remains intact. The ongoing AML checks will help businesses identify if some criminal activity is trying to become part of a legitimate system. Hence all insurance frauds can be eliminated with just one integration of document verification service.