Anti-Money Laundering (AML) and Know-Your-Customer (KYC) regulations are stringent in the U.S. to counter threats against the financial industry. Because of this sector’s monetary nature, it has become a primary target among criminals.
Identity proofing remains imperative among financial institutions for due diligence to regulatory compliance. Also, leveraging technology for better identity verification protects these establishments from possible attacks that can cost their reputation and customer trust.
Even amid the COVID-19 pandemic, criminals are relentless with their illicit schemes to infiltrate financial firms. They see the crisis as an advantage rather than a nuisance.
Various economic problems stemmed from the pandemic. Consequently, many lost their jobs, and some businesses were forced to close. Regarding this situation, government stimulus and unemployment benefits are given to affected individuals to ease their financial burden.
However, these cash aids are being targeted by criminals causing fraud cases to surge in the U.S. Fraudsters often use stolen identities, create fake accounts, or try to hack into existing accounts for monetary gain.
As of September 13, 2020, the Federal Trade Commission has reported a total of 105,095 fraud cases in the country and 29,109 cases of identity theft.
Because of these illicit activities, legitimate COVID-19 relief beneficiaries may have trouble with their financial aid.
Many institutions are already implementing new and more secure technology like biometric identification to mitigate fraud, especially in a technology-reliant environment. However, some are still using conventional user authentication processes which are often weak and vulnerable to threats.
The failure to adopt reliable customer authentication processes has consequences that are often difficult to recover from. Deploying useful security measures not only helps financial firms to keep their systems secure but also allows them to adhere to regulatory compliance.