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Banking and Finance

Verify customers, reduce risk, and stay compliant to prevent fraud.
By implementing identity verification solutions, financial institutions can significantly reduce the risk of fraudulent activities such as account takeovers, unauthorized transactions, and money laundering. Real-time verification processes enable institutions to quickly identify suspicious patterns or inconsistencies, triggering further investigation and preventing potential fraud before it occurs.

Timing and customer risk rating are important for risk control

The relationship between timing and customer risk rating plays a significant role in risk control measures, particularly in the context of business operations in Austria. Timely assessment of customer risk is crucial for businesses to effectively manage and mitigate potential risks associated with their clients. Businesses can allocate resources and implement tailored risk control measures by assigning appropriate risk ratings to customers. Surprisingly, there has been a significant 44.7% rise in data breaches and incidents of identity theft. To mitigate these risks, banks in Austria must conduct thorough customer risk assessments as part of their onboarding process by implementing the KYC business procedure. Financial institutions can establish additional rules and scenarios for effective risk management by integrating the API for KYC into their transaction monitoring systems. This ensures the security of financial systems, as customers undergo continuous monitoring throughout their association with the institution.

Banking and Finance

The High Cost of Compliance: Automation Can Help Financial Institutions Reduce Costs and Protect Customers

Financial institutions in Austria recognize the utmost importance of adhering to KYC and AML procedures. However, these procedures can be complex and arduous, directly and indirectly leading to significant costs. Recent reports indicate that these expenses can pose challenges to the seamless daily operations of banks. Nonetheless, financial institutions can alleviate the burden and bolster their KYC compliance efforts by incorporating automated technologies such as API for KYC and KYC Identity Verification. These automated processes enhance their know-your-customer business practices and contribute to cost reduction by minimizing reliance on manual compliance procedures.

  • The costs associated with compliance are persistently increasing.
  • The consistent rise in compliance costs remains a concern.
  • The financial burden of meeting compliance requirements continues to escalate.
Banking and Finance

Client Risk Assessment

Financial institutions use customer screening to comply with KYC regulations. This process typically involves one of three approaches: onboarding, ongoing, and real-time screening.

Onboarding: The financial institution will conduct a risk assessment when a new customer opens an account. This may involve collecting personal information, such as name, address, and date of birth, and verifying this information against government databases. The financial institution will then assign the customer a risk level based on their findings. Customers with a higher risk level may be subject to additional scrutiny, such as requiring them to provide additional documentation or undergo a background check.

Ongoing: Financial institutions must also conduct ongoing KYC screening to ensure that their customers are who they say they are and are not engaging in illegal activities. This may involve reviewing customer account activity for suspicious transactions, such as large cash deposits or wire transfers to high-risk countries.

Real-time: In some cases, financial institutions are required to conduct real-time KYC screening. This is typically required for high-risk transactions, such as wire transfers. Real-time KYC screening involves verifying the identity of the customer and the recipient of the transaction before the transaction is processed.

Financial institutions spend $500 million on customer onboarding, resulting in a 19% increase in cost. Weekly, salespeople spend 1 ½ days onboarding new clients.

Financial Institutions Need to Collaborate with Fintechs to Thrive

In Austria, digital identity verification solutions are crucial in authenticating customer information using trustworthy data sources like credit bureaus and government databases. This advanced system enables financial institutions to effectively differentiate customers with extensive credit histories from those with limited ones, enabling them to confidently make informed decisions.The collaboration between banks and Fintech providers presents a valuable opportunity for banks in Austria to enhance their infrastructure and elevate their customer offerings. By leveraging the expertise of Fintech companies, banks can develop innovative tools and services that empower them to provide superior digital experiences to their customers. The swift and efficient implementation of these solutions is of utmost importance for banks to maintain their competitiveness, combat financial fraud and identity theft, and overcome the challenges associated with outdated KYC and AML compliance policies.