Identity verification has always played a big role in AML and ATF compliance. Traditional banks have been able to incorporate and leverage the boons of the digital era with digitized identity solutions.
Digital banks, too, have emerged and transformed with the digitization wave. Neo banks or digital banks are now one of the largest emerging markets globally.
The availability of the internet, tech stacks, and the innovative spirit of the financial institutions in a bid to offer dynamic solutions to their customers, led to the establishment and rise of digital banks.
Digital Banks
Digital banks are just like regular banks that operate and function virtually with no physical branches. Customers can open their digital banking accounts, transfer funds, receive credits, apply for loans, and do a lot more with digital banks. The whole world of banking has been condensed to fit into the intangible fabric of the digital world, enabling customers to access banks from the comfort of their homes.
Digital banks are not that new in their functionality because elements of these operations have already been digitized by traditional banks. Internet banking, mobile banking, e-KYC, and more were already in full utility. Digital banks leveraged this sphere and continued to craft their services to fit the requirements of their customers.
Now, one of these pre-existing elements is identity verification.
Identity Verification
Identity verification is the process of validating and verifying the identities of customers with valid proof against the official identity records of the authorized data lists. Take the TIN Match as an example.
The social security number or EIN of the customer is obtained along with the legal name to verify the identities against the IRS database in real-time. This process of TIN verification enables banks to verify the identities of the customers and confirm the validity of the information.
Now, identity verification is beyond information matching. It is a protocol for compliance.
Since the identity verification framework has been digitized, digital banks have been able to embrace the perks of its tech stack. Further, neo banks are now functioning successfully due to the in-built digital identity verification framework.
In short, the digitized identity verification framework is the linchpin to the effective functioning of digital banks.
This acts as an incentive for both digital banks and traditional banks to invest in digital identity verification solutions, such as TINVerify, which enable effective identity verification in real-time with great accuracy.
The following will discuss in detail how TINVerify transforms the customer accounting opening experiences for digital banks with its simplified yet customizable digital identity verification infrastructure.
So, let’s get to it.
Enabling e-KYC
The traditional framework of the Know Your Customer/Client (KYC) process requires banks to verify the identities of the customer and confirm the credibility of the identity claims. It further enables banks to use the information to verify customer identities periodically.
Digital banks create an interface to help customers enter their legal information in the account opening experiences. Customers even upload the identity proof to create an account with the digital bank. The obtained information must be verified against the official federal records as authorized by the federal regulatory bodies.
TINVerify’s TIN Match enables banks to verify the obtained taxpayer identification number and legal name against the real-time TIN/name records of the IRS. Since TINVerify is directly connected with the source (IRS), your TIN Match queries are met with accuracy.
With TINVerify, you can verify as many as 100,000+ TINs within a minute, accelerating the TIN verification process.
Streamlining Customer Identification Process (CIP)
Apart from TIN matching, banks also have to verify customer profiles against a variety of authorized data lists to ensure that the identities are validated extensively for accuracy. Identity checks, such as Tax-Exempt Org. Search, Address Validation, SOS Business Entity Search, Death Master File, and more are used to ensure that the identities are not claimed fraudulently.
These checks help digital banks identify both entities and individuals who want to open an account with the bank. Each of the identity checks has a distinct risk qualifying mechanism, which helps digital banks assess the risk and conclude the risk quotient of a profile.
The fundamental aim behind the collective CIP checks is to check if the customers are really who they say they are or if they’re adapting someone else’s identities falsely with vested interests.
Improving AML Compliance
Banks are going digital for a reason; to expand their customer bases globally. This means digital banks are inviting customers from global geographies to utilize their banking services. However, this can be risky. Several individuals, groups, entities, and regimes are working to misuse the financial ecosystem for vested geopolitical and financial objectives.
Hence, digital banks are regulated with AML and ATF directives to prevent the misuse of the global financial ecosystem.
Checks like Politically Exposed People, OFAC Sanctions screening, Specially Designated Nationals, Consolidated Sanctions search, and more enable digital banks to check if the incoming profile is compliant with national security and foreign economic policy perspectives. Risk screening is a keyword in this context.
With TINVerify’s sanction screening solutions, digital banks can easily screen each profile against a variety of sanction program lists to ensure that the bank prevents onboarding high-risk profiles.
Accelerating ATF Compliance
Terrorism financing is becoming a central concern for the global economies each year. Despite multiple stern directives being issued to every financial ecosystem in function, regulatory bodies are unable to grab hold of money launderers and terror financiers.
In recent times, banks were complicit in money laundering and terror financing. Whether it was a direct or indirect role is still up for debate, but the bank’s role in enabling the money laundering transactions and cross-border transactions was transparent. Lack of robust AML and ATF compliance policies and the inability to implement these policies lead to escalations.
Federal regulatory bodies advise banks, especially digital banks to utilize identity checklists such as Specially Designated Nationals, Blocked Persons List, Foreign Sanctions Evaders List, Designated Foreign Terrorist Organizations, and more to identify and prevent risk right from the get-go.
TINVerify offers all ATF-compliant identity checks that digital banks can use to screen their customer profiles. Digital banks can verify millions of customer and business profiles within minutes.
Priority Customer Due Diligence
While identity verification during the onboarding process is important, periodic identity verification and risk screening are just as essential. Many banks have been deceived by seemingly harmless low-risk profiles that turned out to be high-risk later on. There really is no full stop to risk screening, so banks have to rely on risk screening from time to time. Risk screening is a continuous process, which introduces the concept of “continued risk monitoring”.
Customer due diligence helps banks with assessing the risk quotient of a profile and running risk comparative analysis as needed. It also enables banks to conduct post-onboarding periodic risk screening.
In this context, customer due diligence requires banks to obtain the identities and proof of identities to review and update the customer identity records. These identities are verified periodically and screened as and when the source records (government-authorized data lists) are updated or modified.
TINVerify automatically re-screens the customer data as and when the source data is modified or updated, enabling digital banks to obtain the most recent, accurate customer records.
This helps digital banks reiterate if the customer data they possess is real and credible or historic and/or false.
TINVerify – A Versatile Digital Identity Verification Infrastructure
TINVerify is a dynamic identity verification infrastructure that enables businesses to verify millions of individual and entity profiles within minutes. With real-time identity data lists, businesses can count on TINVerify’s identity solutions for accuracy and relevance.
TINVerify is directly connected with the source – this means that your data is safe with us and we do not pass it on to third parties. Further, we validate the data against federal-compliant identity data lists as authorized to ensure privacy. What’s more? Your identity queries are met with the most recent, accurate results.
TINVerify’s highly scalable API channels help businesses to customize their identity checks and verify as many profiles as they may need every day.
Real-time results + performance = TINVerify
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