Reasons Why Verification Of Identity Is Crucial In Emerging Markets
Melissa AU Team | |
In the film Face Off, John Travolta steals the identity of the antagonist by undergoing a face transplant. He could access everything that the opponent has by doing this. But in reality, one does not need a face transplant.
As more and more transactions have moved online, getting the personal details of another person is good enough to gain access to one’s wealth and ruin his/her life. And most of the time, it is the emerging markets that take a blow from data breach that leads to identity theft.
Understanding Emerging Markets
First things first. Before discussing why emerging markets need to take effective measures for ID verification, let us understand the definition of emerging market. By textbook definition, an emerging market is a nation that has the traits of a developed market but does not qualify to be called so because of the low standards. Countries that are on the path to become developed markets also fall under this category. For example, experts consider India and China as the biggest emerging markets in the world.
Why Verification Of Identity?
One of the reasons that call for identity verification is wealth and transaction going online. Many companies in the developed nations are now using Identity verification procedures before they offer any product or services to a customer. Having enough controls in place is necessary for a company to protect the personal data of its customers. However, emerging markets are not a safe haven when it comes to data protection.
Money is the recipe of all evil in the world. If you do not have proper controls in place, people can use the funds to plan terrorism, conduct fraud, and money laundering. Hence companies or financial institutions should be cautious and do proper ID verification before they offer any services. Knowing the customer is vital as it can help you thwart all the frauds and steer your organization in the right direction.
Who Should Embrace Verification Of Identity And How Can They Do It
Financial / Banking Services
Banking sector and money laundering, we have heard enough of them. Now let’s see how banks can use identity verification to counter this.
Most banks choose to do manual verifications of the documents when someone walks into their office for any transaction. In the US and Canada, it is mandatory for people to submit their ID cards for verification even though the transaction is to get change for a 20 dollar bill.
These days most of the banks or financial institutions are also having biometrics in place so that they can identify a person when they walk up to them.
The possibilities of identity verification are not limited to these steps. Organizations are also introducing measures such as speech and face recognition, iris scanning etc. so that the banking operations can become secure.
Online Payment Services and E-com Companies
There is a lot of fraud happening online these days than ever before. Fraudsters are using various means to get the personal details of the customers such as their data and credit card details. The following are some of the methods the fraudsters follow to get your personal details:
• Phishing emails or website to get credit card details and login information
• Hackers try to steal credit card information using scams wherein people are asked to transfer fees or do wire transfers
• Some hackers are smart enough to send fraud invoices to get money
• There are cybercriminals who create online businesses in the form of a legit company trying to fool people
ID verification is one method that can help resolve this issue. Using eIDV or Electronic identity verification platform which complies with the transborder AML or anti-money laundering and KYC regulations internationally, online payments can be more secure.
E-Commerce, financial service providers, gaming, and insurance companies can benefit significantly from KYC regulations.
Insurance And Medical Firms
It is shocking to note that criminals are stealing medical identity and using the same to get treatment for ailments that they are having. They even use the stolen details of a patient to buy addictive drugs. Insurance and medical companies can thwart this by embracing technology that notifies any duplicate records or helps prevent any such data breach. Introducing biometrics can also help in protecting the data.
The Bottom Line
Cybercriminals and fraudsters are not only focusing on sectors that involve money transactions. Nowadays, creating shell companies to purchase lands in another country is not a difficult thing. In 2004, alone, fraudsters bought almost £180 million worth property in the UK.
There should be some control on who is purchasing the property. It is crucial to get full disclosure of the company or Individual buying the property. The USA and Canada, for example, have strict rules in place. They verify the identity of a buyer especially when the person is from off-shore.