The banking sector as it is today has evolved to reach the place where it is now. But has the situation improved? Not that much. The financial sector still faces frauds that are mainly caused by criminals who impersonate identities. Falling under this are credit card, identity, and benefit frauds that financial institutions face. Here, the young ones use their adults’ ages to dive into illegal financial benefits.
Adding to this new trend is the digitalization of businesses majorly governed by the COVID-19 pandemic. With this, the need for new solutions for age verification also emerged. Firstly for KYCC compliance and secondly to prevent frauds and illegal activities. Age verification solutions are in the market with various technologies for the up-grooming of the industries. Alongside, they prevent fraud and restrict illegal activities.
What types of Fraud are faced by the Banking Industry?
The banking sector was never free from frauds and criminal breaches. This argument can be backed by the International Crime Report, 2020 published by the FBI. According to it, the number of internet crime complaints was around 800,000 with a loss of over $4.2 billion. With the financial world shiting to online services, the need for digital banking arises. However, fraudsters are adopting sophisticated approaches because they know how to exploit the loopholes. Here, identity verification comes to the rescue.
Credit Card Frauds
There are more than one frauds happening in the banking sector, ranging from credit cards to fake accounts. As per LegalJobs statistics, more than 46% of the total frauds occur in the United States. The under-age use credit card of their parents or other adults either to make purchases or gain access to age-restricted platforms. Therefore, age checks here serve as the readily available solution.
Identity Frauds
Identity fraud occurs when individuals impersonate to be someone else. The most trait that fraudsters steal is age. They do use the name and address but age is their favorite. It is used for clearance that further adds to the creation of scam accounts. So the fraudsters don’t get caught, but not all of them escape as the age verification online tools are guarding the doors. Also, the banking sector is obliged to comply with Know Your Customer (KYC) and KYCC and in this, they verify age along with the rest of the details.
Relief Funds and Benefits Frauds
When the pandemic hit the world, central governments of the world came up with relief funds for their citizens alongside some benefits. Mainly work from home, healthcare, and domestic discounts. But the criminals did not rest and stole around $100 billion from the relief funds as reported by CNBC. Banks here can get the age verified before allocating the funds to make sure they reach the deserving ones.
Online Age Verification is here to Save Everyone’s Neck
Age verification online tools are in line to give banking sectors the necessary protection by acting as plaster to their cracks. By holding on to these tools banking sector can;
- Onboard legitimate customers
- Verify their customers’ customer
- Save young-aged from becoming a victim and old-aged from losing their benefits
- Prevent frauds of all sort
- Enhance the security of funds and information
- Improve customer experience
How Does the Process Work
The online age verification is as simple as applying for admission as it has similar steps. The platforms won’t ask for all of your details but the major ones like government-issued documents including ID cards, licenses, passports. But, the requirements vary from locality to locality.
Fill in your Date of Birth
The initial step in the verification is the submission of some basic details like name and date of birth. While onboarding, the site presents an online form in front of the customers that they have to fill in by adding authentic data.
Scan and Upload the Documents
To provide evidence for the previously added information, platforms ask for documents. Clients can easily scan the documents from their phones, tablets, or webcam on the top of systems. Mainly sites ask for ID cards, passports, or licenses. After the submission, the documents undergo verification.
Data Extraction
After the document enters the system, the OCR extracts the data from it. Moving on, it tallies the date of birth with the details from the national database.
Results Dispatch
After successful verification of the provided and database documents, the site fetches the results and presents them in front of the end-user. The result can be ‘verified’ or ‘declined’.
Takeaways
The age verification solution is a game-changer for the criminals as it put barriers in their way. Banking sectors encounter massive frauds throughout the year and major among those are identity frauds. Here, age verification and KYCC serve as the hold-on-to solutions.