KYC Verification: What It Is and How It Can Help Prevent Online Fraud.

The world of online dangers is constantly growing. Cybercriminals and fraudsters use any mean possible to evolve their malicious actions so they would be harder to detect while affecting more people.

This puts businesses in the difficult position of trying to make their customers happy and protecting them and the company from various online threats.

Luckily, cybersecurity tools, such as KYC verification utilize modern technology to help you put an end to those dangers.

Most Common Online Threats

Cybercrime is growing more and more every year, affecting more people and causing more damage.

While numbers might not seem as severe when compared annually, change is more drastic when compared to the numbers from 5 years ago. Since 2017.

Statistics have increased dramatically – there was a 393% increase in money lost while the number of reported cases increased by 191%.

Worst of all, this is nothing compared to the rise in phishing attacks which has experienced incredible growth of 1,178%.

To protect your customers from online threats, you need to know the dangers you might face.

While not all businesses will face the same threats, some of them are more common than the others:

Phishing Attacks

Phishing is one of the most widespread types of fraud. It occurs when a fraudster tries to trick you into revealing your private and confidential data.

They usually send an email in which they will ask you to provide them with some confidential details. To ensure you actually give them these details, they will pretend to be a trusted or known source.

They don’t shy away from pretending to be anyone, from utility companies, financial institutions, business associates, or even your CEO.

People are more inclined to believe emails from these official sources, so they usually don’t double-check the sender to confirm they are legitimate parties.

Account Takeover

This type of identity theft is one of the biggest threats for businesses. It happens when a fraudster gains access to a user’s account credentials by using stolen passwords and usernames.

Fraudsters can cause significant damage while accessing the account, such as changing account details to block users from regaining access or even stealing financial information or sensitive data.

Even worse, if the user has been using the same credentials for different accounts, fraudsters can use them to gain access to all of those other accounts.

Card Not Present Fraud

Account credentials are not the only thing fraudsters want to steal from you. They will often steal credit card numbers, so they can use them to purchase products or services from different businesses.

This is disruptive to legitimate card owners and the companies they purchased products or services from, as it ends up in chargeback requests.

Businesses end up losing revenue from the purchase, while also having to pay various administrative costs connected to the chargeback process.

How Can KYC Help?

We use different tools to help our businesses thrive, and KYC is one of them. KYC is designed to help companies fight against fraud, financial crime, money laundering, and corruption.

It allows businesses to gather more information about their customers and use it to determine if they are legitimate people or if they are conducting fraudulent or criminal activities.

Not all businesses need the same level of KYC verification, but all businesses need it. While financial institutions or the iGaming industry need to conduct diligent checks, other companies can be more flexible and request only the minimum information, such as the user’s full name, date of birth, and address.

The biggest threat to any business are its customers, as they bring unexpected dangers into the picture.

From account takeovers of legitimate users’ accounts to accounts created by malicious actors to test stolen credit cards and transfer money, dangers lurk from anywhere, and you need to stop them from affecting your business.

While you want to do everything to ensure your customers have an amazing online experience, you still need to do everything in your power to protect them and your business.

KYC verification verifies the identity of customers, ensuring you are dealing with legitimate parties and not with someone pretending to be them or fraudsters and cybercriminals.

By identifying fraudsters or cyber criminals during the verification process, you can stop them before they can cause any damage to you or your users.

Best of all, it doesn’t stop during the onboarding process, as you can use it continuously.

Anytime there are some discrepancies in user activity, such as a drastic change in their IP address, you can request users to verify their identity again, effectively stopping account takeover or identity theft.

By minimizing the risk of online fraud with KYC verification, businesses can concentrate their efforts on future growth.

Conclusion

With the development of the internet and technology, more and more companies are undergoing digital transformation and transferring their business operations online.

Growing online presence from businesses and individuals means that online fraud will become an even more significant part of our professional and personal lives.

If you don’t want to become the next victim, you need to educate yourself about the dangers you might face and start taking proactive steps to prevent them.