ID verification allows you to protect critical data. However, it can also cause many problems. Imagine what would happen if fraudsters gained access to the database with verification data. Therefore, ensuring the complete security of this process is one of the primary tasks of any fintech company, and all employees should participate in this. In this article, we will tell you how this system should be organized.
Weaknesses of the Verification Process
Modern attempts to protect user data and provide them with secure services resemble an arms race. Every day, fraudsters come up with new ways to get data, and information security specialists develop countermeasures. Unfortunately, protection in this fight is always a little behind. Therefore, it is essential to know about weak points and be able to work with them correctly.
Problems with Choosing a Verification System
There are many solutions on the market today. Of course, they differ in quality. However, even the best of them are not universal. They are all designed for a specific area of application. Therefore, they perform different tasks. For fintech companies, the highest level of reliability is essential. At the same time, it is important to maintain user convenience and processing speed. Therefore, a genuinely reliable verification tool is required.
You need to approach the selection process with full responsibility. The system must meet not only your requirements but also the laws of your country. Otherwise, its implementation does not make sense. Before making the final choice, carefully analyze each offer.
AI Mistakes
Many large companies have long automated the user verification process. This is necessary to ensure that the service is provided as quickly as possible. However, the quality of AI depends on many factors. Ideally, this is a system that works without failures. However, if the training was poorly done or the task was not set clearly enough, the neural network will make mistakes.
The only solution is to provide the maximum possible amount of data for training, as well as constant testing. With any innovation, it is necessary to repeatedly check how the AI processes this or that information. In addition, the responsible employee must be a professional and know how to work with this tool.
Employee Mistakes
Of course, AI cannot work entirely autonomously. It needs to be controlled and trusted. In addition, other employees may use customer data during the work process. Therefore, it is crucial to conduct proper training. There are frequent cases when, due to ignorance or inability to work with information, company employees have allowed data leakage. Needless to say, this entails colossal reputational costs.
User Errors
This is the area where the fintech company has no influence. The user can write down the password on a piece of paper or tell it to another person. The phone can be stolen or lost, and data leakage is possible due to viruses. Therefore, it is essential to consider these points in work. Identity verification at each authorization is necessary when it comes to finances.
What is Compliance Culture in Fintech
Compliance means meeting all the requirements of modern legislation. However, for fintech companies, this concept is filled with a deeper meaning. Since this industry works with sensitive data, information security issues come to the forefront. Therefore, it is important to be guided not only by regulations, but also by ethical standards.
Recently, the issue of protecting personal data has become increasingly acute, so the compliance landscape is constantly changing. This is one of the challenges that fintech faces every day. In order to survive in such difficult conditions, a general compliance culture is needed, which every employee will adhere to.
Of course, technical means of ensuring requirements are also necessary. However, the roots of culture lie in the area of human responsibility. Even a slight negligence can lead to catastrophic consequences for both the client and the company itself. Therefore, the introduction of a clear policy in this regard is one of the priority goals.
Why Compliance Culture Is Necessary
If you look closely at the pain points listed in the previous point, you will see that the primary focus should be on working with employees. Once a verification solution is selected, they are the ones who will have to work with it. And we should start with forming a compliance culture in the company. There are several reasons for this.
- Risk of financial and reputational losses. The lack of a compliance culture leads to violations that entail severe fines. However, this is not the worst thing. In today's world, reputation is much more important than money. And if your company tarnishes itself, it will be difficult for you to fix it later.
- The need for customer trust. This point follows from the previous one. You will be chosen among competitors only if you provide reliable services. No one will trust a company that neglects compliance.
- Reduced resource and time costs. If all employees follow a single protocol, you will be saved from duplicate work and wasted resources. You must be sure from the very beginning that your product complies with the KYC policy. Otherwise, you will have to go back to the beginning and redo everything.
- Building a Reliable Team: It's not just customers who prefer reliable companies. If you practice a compliance culture, you have a much better chance of creating an effective team of professionals.
Thus, the costs of implementing this policy and training staff will quickly pay off. It is best to implement this culture from the very beginning of the company's activities, but it is never too late to start.
How to Build a Reliable System
Now that you understand how important it is for a fintech company to adhere to compliance policies at all levels, it's time to talk about effective ways to implement them.
Start at the Top
If you yourself do not see the importance of a compliance culture and do not convey these values to employees, there will be no benefit. It is with the manager that all changes should start. In addition, you need to appoint a responsible person who will monitor the adherence to the principles. Hiring a compliance officer is a really smart decision, since centralized control is simply necessary, especially at first.
It is also a wise decision on your part to integrate an easy-to-use and compliant compliance solution. This will facilitate the adoption of this culture in the company.
Explain the Importance of Each Employee
Compliance with the requirements should be of concern not only to the responsible officer. It is necessary to convey to the employees that this is everyone's responsibility. It is from their daily actions that the general culture is formed. Very often people do not follow the requirements because they do not understand their meaning. Therefore, it is essential to conduct educational and explanatory work with the staff.
Optimize the Process
We have already mentioned that integrating a suitable system will facilitate the implementation of a compliance culture. If an employee uses an adapted tool, he gets used to fulfilling the requirements at each stage. Gradually, this becomes an internal culture. Thus, you will achieve much more significant results with minimal effort.
Use Software
Trying to manually control the compliance culture in a large company is doomed to failure. That's why you need tracking tools. It's convenient when they are all integrated into one single system. This way, you can get comprehensive information and fix weak points. It's incredibly convenient if the ID verification system is integrated into your company's CRM. Then you won't need several different programs.
Act Constantly
Implementing and monitoring a compliance culture is a process, not a one-time action. Of course, with proper automation, monitoring will not take up much of your time. However, it is essential to remember that requirements change. You must promptly communicate such changes to your employees and regularly review existing procedures. If there is a strong compliance culture in the company, these actions do not require much effort.
Automate the Checking Process
The more automated the results control process is, the easier it will be to monitor compliance with the culture. Therefore, try to minimize the number of manual reviews. It is best if the results report is generated by the program, and the compliance officer only checks these reports and monitors their relevance. Thanks to this solution, you can get by with a small team for the entire company.
Conclusion
In today's corporate world, compliance culture goes beyond simply following laws and regulations. It is a holistic approach to providing a safer and more efficient service. This is especially important for fintech companies. Each employee must understand their responsibility and their contribution to the common cause. The burden of responsibility should not fall only on the compliance officer. And it is up to the company's manager to determine how effective and easy it will be to develop such a culture among employees. Integrating an appropriate verification tool that works in accordance with compliance requirements will be an excellent first step.
