Fraud and cyber crimes have been increasing at a rapid pace. According to a survey of the Insurance Investment Institute, account takeover tripled in 2017 and a record high amount of $16.8 billion was stolen in the last year. In 2018, 3 million identities were stolen in the USA only to defraud the businesses of all types, especially the financial institutions.
This increase in frauds and cyber crime has initiated many regulatory amendments and increased the strict scrutiny of the businesses regarding KYC and AML compliance. The businesses of all types are bound to exercise due diligence and AML checks on their clients before on boarding them.
AML compliance is a very crucial decision for the businesses because it requires extra attention, effort, and expense to completely comply with AML and KYC regimes. Due to this extra effort business in every corner of the world have been using outsourced AML compliance solutions to prevent any extra effort needed for compliance. These solutions help businesses to practice seamless compliance to improve their company value without affecting the on boarding experience of their clients.
There is no doubt in the digital AML and KYC compliance solutions’ efficiency but the decision of becoming compliant is a crucial one and needs to be taken vigilantly.
Being a decision-maker the CEO and other chiefs need to be very careful and have many questions regarding the credibility of the idea of investment in AML compliance. Below are the benefits of becoming a compliant company.
Diverse customer base:
The customers are the source of revenue as well as a loss for the organizations. The businesses have been very keen on improving their services but in this current scenario of huge losses and increasing frauds, the businesses need to be very careful in on boarding their customers. These days compliance is also a source of increasing customer value.
All types of people are on boarding the business platforms and many of them might be the fraudsters and criminals. Hence the businesses should screen their customers before letting them in.
Automated AML compliance through outsourced AML compliance solutions takes less time, effort and money. The AML check is completed on a client within a minute. Whereas it takes a lot of time for a business to recover from the loss of fraud. According to a PWC survey, globally businesses spend more on fraud recovery and management than the actual loss incurred due to fraud. Frauds that can harm a business are, fake identity fraud, credit card fraud, fake merchant fraud, money laundering, etc. All these frauds can be mitigated through automated KYC verification of the clients, either new or old.
The credibility of the company:
The companies running seamless identity proofing and KYC/AML compliance checks of their clients are considered more credible by the customers and the regulatory authorities. Compliance improves the company value which ultimately increases the revenue and customer base of the business.
Risk Due to Imprudent Regulatory Compliance:
Automated compliance could also become the liability of the company in case the employees are not trained properly or a less credible service provider has been chosen by the business.
To wrap up, businesses need to be very prudent in regulatory compliance decisions. The compliance regimes are unique to every region of the world hence it is important to choose a global compliance solution to screen the clients coming from every corner of the world.
Another take away is to choose wisely among many AML and KYC compliance solutions available on the web promising to be world’s best. Choose the one that has required certifications and is serving a global clientele. Lastly, compliance is needed and it is a value-oriented investment if not exercised vigilantly.