Importance of Identity Verification

Lawyer is explaining about the wrongdoing laws regarding fraud to the client at the office.

Importance of Identity Verification

Identity Verification has become a global industry. The requirement for identification and verification is huge as technologies continuously evolve, so institutions need to brace themselves to introduce and strengthen the verification process.

The digital economy is growing at a fast rate. So it’s crucial to integrate a robust identity verification system that helps combat the challenges arising out of rapid digital advancement. It’s essential to put safe and secure digital space and meet all the compliance requirements while keeping pace with advanced technology.

Managing the digital landscape has become complex due to the misuse of data and the innovative ways criminals indulge in financial fraud. Global companies have a significant concern of complying with the rules and regulations due to laws of different jurisdictions. A trained and experienced team and advanced tools can help comply and prevent any financial and reputational loss.

Non-compliance with customer identification procedures proves to be dangerous for any company, especially small and mid-size companies and even start-ups. They need to thoroughly understand the compliance rules and follow them to ensure business continuity. 

Today businesses need advanced tools that can automate the process of AML compliance and leave no scope for violation of rules and regulations. The AML compliance rules evolve, and authorities change them now and then to plug all the loopholes that can lead to financial fraud.

So, businesses need scalable, flexible, and intelligent solutions that can help them stay ahead of the curve. They need efficient systems that correspond to the unique evolving business requirement for compliance needs and deliver excellent efficiency. Scalability is an essential element here as adding new capabilities to fulfil the growing business requirements will become a smooth process. Rigid systems do not allow adjusting workflows as smoothly as advanced tools.

Hence, it’s necessary to incorporate modern customer identification and verification systems to enable scalability. 

Businesses can speed up the customer onboarding process by following the below-mentioned measures- 

  • Improving customer experience and ensuring a seamless onboarding experience and rates.
  • Avoid non-compliance.
  • Identifying fraudulent accounts and transactions. 
  • Incorporating an efficient and cost-effective AML compliance program.

Simultaneous risk mitigation is crucial while conducting business operations. With a quick and efficient process, companies can successfully tap the potential business opportunity and mitigate risks. 

Identifying Fraud

The importance and relevance of digital technology have grown by leaps and bounds in the recent past. Owing to the pandemic, a large number of customers moved online, and the load on the digital systems increased. Digital risks also increased, and there has been a huge requirement to protect customer privacy and ensure safe digital transactions. But the existing digital systems were inadequate to handle the sudden surge in digital transactions. They were not equipped with advanced security measures.

Fraudulent transactions, identity theft, phishing, and other cyber-crimes have become prevalent. Institutions were caught off-guard with their not-so-competent systems to deal with the challenges arising from the paradigm shift in consumer behaviour and the changing ways of operating businesses. It’s imperative to bridge the gap between the existing systems and digitally safe environment requirements.

The lesson is now learned, and it’s time to implement the learning by adopting new technology and approaches into the existing infrastructure. Apart from introducing competent measures, it’s also equally important to understand the evolving customer demands and learn about the changing behavioral patterns.

Customers appreciate better security measures but show reluctance in complying with them due to discomfort or other reasons as they see them as hurdles and inconvenience. Businesses have to ensure a smooth onboarding process that provides an enhanced customer experience and fulfils all the requirements of the customer identification process.

Several customers might not be able to fulfil the customer identity requirements. There might be genuine reasons, such as insufficient credit history or residence information. But such customers can prove to be valuable customers with whom businesses can create a life-long business relationship. The onboarding system should consider such unique requirements and differentiate between genuine customers and fraudsters.

Understanding the Customer

Businesses need robust technological support but having said that, they also need to understand the pulse of the customers and learn about their expectations. Companies must fulfil customer requirements while complying with the customer identification and verification process. They need to deal with the omnipresent complex digital identity issues and deliver customers a seamless experience.


Customers are getting acquainted with the idea of digital privacy and, at the same time, demand digital personalisation. So, it is vital to balance the offerings and strive to offer high customer satisfaction. 


Customer Onboarding is a complex process as the information and documents furnished for opening an account need to be examined. The business must understand the nature of the company, the type of customer, and their journey to have a clear picture about the purpose of the company to associate with the institution. Every business is unique, so the institutions cannot adopt the same approach; instead, they need to use a customised system. 


Identity verification is an absolute necessity today and needs to be implemented with the help of advanced technologies. Today, advanced software is being used to access a large volume of data, verify customer identity, and carry out a stringent KYC- Know Your Customer, CDD- Customer Due Diligence process, and EDD-Enhanced Due Diligence process. Institutions can detect any suspicious transactions and speed up the process of onboarding. With the help of technology and the latest software, institutions can effortlessly carry out the customer verification process.


In , AML/CFT compliance customer identification and verification are crucial. The right AML software allows complying with the rules and regulations efficiently. It helps to build customer trust and promote business growth. AML UAE is a popular and reliable AML consultant that offers a comprehensive range of AML compliance services. 

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About the Author

Pathik Shah


Pathik is a Chartered Accountant with more than 25 years of experience in compliance management, Anti-Money Laundering, tax consultancy, risk management, accounting, system audits, IT consultancy, and digital marketing.

He has extensive knowledge of local and international Anti-Money Laundering rules and regulations. He helps companies with end-to-end AML compliance services, from understanding the AML business-specific risk to implementing the robust AML Compliance framework.