Electronic Identity Verification (eIDV) is a process that requires users to provide personal information through a digital method that proves they are a real person or business. It is one of the most effective tools to protect oneself if you wish to participate in today’s global marketplace, where there are virtually non-existent barriers to entry. Read further to learn how identity verification will benefit your business.
Benefit 1: Improve Customer Experience
In a world where the consumer has multiple options available to them, finding ways to stand apart from your competitors has become crucial to your bottom line. One way in which many businesses are trying to stand out is through outstanding customer experience.
How does standing apart from the competition relate to Identity Verification?
Well, electronic identity verification allows customers to authenticate their identity within moments and within the comfort of their home.
There is no need for customers to physically visit your office stand in a long line and go through the tedious multi-contact method that many firms still use today where every single document is manually reviewed.
Instead, electronic authentication improves the customer’s experience by providing the customer with a seamless on-boarding experience. They can instantly verify their ID and obtain your product or service no matter where they are, which helps to keep customers happy and increase conversion rates while also saving you time, labour, and money.
Benefit 2: Build Consumer Trust
Another essential factor that allows companies to stand out to the consumer is their reputation. Meaning how credible and trustworthy you are. This is especially important for companies that process online payments. In the case of online transactions, there is no person-to-person interaction; therefore, it becomes much simpler for criminals to impersonate someone they're not or hide their true identity.
Identity verification is a highly effective method that companies use to reveal the true identities of suspicious individuals and firms, and it plays a crucial role in helping you build a trustworthy image.
It helps you earn your consumer’s trust. When you provide a method for consumers to validate their ID, it shows them that you take their security seriously, and it gives them the confidence they need to continue using your service.
Many businesses will go one step further and implement multiple checks throughout the consumer's journey that verify identity.
For example, some banks have multiple step-process for using your card. For any transaction, you must have your card present and the correct pin. Some banks will even text you with the transaction details as soon as they detect activity on your card.
This three-step process emphasizes a customer-centric approach as it shows the care that banks take into prioritizing the protection of their customer's finances. In this way, banks earn the trust of their customers, encourage them to continue using their services, and gain an advantage over their competition.
Benefit 3: Prevent Expensive Fines
In April of 2019, the British bank Standard Chartered was fined $1.1 billion for violating Anti-Money Laundering laws and economic sanctions. While in 2012 HSBC had to pay $1.9 billion in fines for aiding Mexican drug cartels to launder money. These are just two cases of many where corporations had to pay astronomical penalties for not correctly following KYC and AML regulations.
Most businesses cannot afford to pay these large sums, which makes KYC and AML regulations very important.
What are KYC and AML exactly?
Know your customer (KYC) is the process that businesses use to collect data to verify their business partner’s identities, so they can ensure that they are legitimate businesses who are not involved in illegal activities.
AML, on the other hand, is a set of regulations and procedures created with the sole purpose of stopping firms and individuals from claiming illegally acquired income as legitimate.
When you adhere to both protocols, not only do you protect yourself from costly fines, but you also avoid damaging your reputation and losing the trust of your clients.
Therefore, utilizing identity verification software that supports both KYC and AML procedures is an easy way to ensure that you’ll never have to pay hefty fines. Not to mention, you will do your part to help reduce money laundering, terrorism funding and any other criminal activity related to the theft and adoption of another’s identity.
Benefit 4: Save On Costs
In addition to helping you avoid the fines that result from not following KYC and AML protocols, electronic identity verification helps you to save costs in other areas as well.
In a previous article, we discussed the most common obstacles that companies face with KYC. In that article, we specifically mentioned how year by year, the on-boarding process gets more expensive as more time and labour is needed to complete it.
This is because traditionally, the on-boarding process is long and high touch. Customers would have to present their ID documents in person, which would then be collected to be manually verified and sometimes sent off to be notarized by a third-party. Because of this manual process, it would take several days to complete the on-boarding for each customer.
A 2017 study by Thomson Reuters that studied how the onboarding process affected banks and other financial institutions found that for corporations, the average customer onboarding time increased from 28 days in 2016 to 32 days in 2017. While for banks, the average onboarding time for every new client was 26 days; despite continuously investing in the improvement of their onboarding process.
However, with electronic identity verification, this process would become instantaneous, and therefore these costs will decrease significantly. In fact, a study conducted by the Mckinsey Global Institute found that “improving customer registration could reduce onboarding costs by up to 90 per cent.”
Identity verification has become crucial for today’s global economy. You are dealing with customers from all over the world, and therefore, it is not very easy to determine whether they are who they say they are. Because of this reason, it is vital that all firms follow KYC, AML, identity verification protocols that protect them from partnering up with illicit firms and individuals that could harm their business.
If you need help with verifying a business, then the Cedar Rose team is here to assist. Over our 23+ years of experience we have created a database of over 12 million companies from the MENA region for quick and easy authentication. In addition to our database we have an expert team that specializes in electronic identity verification also known as eIDV or eKYC and eKYB and can offer verification of over 100 million companies and 160 million individuals internationally - mainly in the Middle East, Romania and Russia. For more information, please visit our website at https://www.cedar-rose.com/ and do not hesitate to get in touch with us.