The evolution of the Internet has made a significant impact on the digital industry. Even after possessing the latest technologies, the world is still searching for questions like what happens if an unknown check is deposited? Or how to identify if there is a doubt about online scamming. What are the factors of concern for businesses when they decide to include new investors in their enterprises?
All these challenges regarding new entities connecting with the companies are the primary factors a business should consider. As the scam rate rises, it is becoming difficult to record fraudulent activities manually. However, businesses have moved towards electronic systems. These digital approaches assist enterprises in combating illicit crimes with effective know-your-investor solutions.
Read the article to understand the primary concept of investor verification solutions and explore how KYI supports multiple sectors in diverse use cases.
A Quick Review on Know Your Investor Solutions
The primary concept of know your investor refers to identifying the funding bodies that aim to associate with the enterprises to eliminate the risk factor. The fraud includes data breaches and cyberattacks, causing financial damage to the organization. The Know Your Investor service is similar to KYB and KYC, having an additional step. The KYI creates a separate profile for the investing entity that is particularly allotted to the funding body. The separate profile analyzes the risk and suggests whether the business is worth working with. This in results leads to preventing money laundering and regulatory sanctions.
How Investor Verification Service Assists in Diverse Use Cases
Verify Investor’s background is important before accepting the investment offer. It is directly proportional to the enterprise’s reputation and consumer satisfaction rate. The investor verification services avoid the potential pitfalls that are conflict of interest and online scams, including ransomware attacks. Below are the use cases that are improved by KYI solutions:
- Banking Sector
The banking industry is classified as the most crucial sector handling the most sensitive components, i.e. financial transactions and bank statements and customers’ information, etc.. The sector is responsible for all the operations regarding the credit and debit of funds and holding consumers’ credentials. However, it is essential for the banks to verify potential investors before onboarding them. The verification process involves the identification of previous funding history along with implementing KYI check methods to keep a track record and ensure that the stakeholder is not involved in any kind of fraud. This validation assists banks in combating false deposits and fake check scams. It ensures the legitimacy of the investor and keeps the consumer accounts safe from identity thieves and cybercriminals.
- Crypto Market
The crypto market serves as a digital asset investment platform holding the top threat rates regarding the funding bodies. However, there is an increasing need for transparency regarding the legitimacy of the new investment entities. The regulatory bodies, taxation authorities, and international banks are still working on understanding the nature of digital currencies. One of the crucial considerations for crypto investors is how the legal taxation agencies’ perspective on holding cryptocurrencies and the risk associated with them. Verify investors can reduce the risk rate and provide this digital platform access to secure investments.
- E-commerce Sector
There is a rapid increase in the e-commerce market with its fast-expanding sales. Therefore, with this growth comes the risk factors. E-commerce businesses require concrete solutions to these security challenges. Data breaches, refunds and client disputes, along with stolen credit credentials, can cause huge damage to the e-commerce market. However, with qualified investor verification, a digital organization can conquer these fraud and identify sources of funding along with shareholders’ records.
- Insurance Companies
The rapid evolution of regulatory complaince and modern technology disruption and adoption has impacted insurance companies regarding data security threats as the funding companies hold vast amounts of sensitive consumer credentials. Therefore, the investor verification solution assists the insurance sector in maintaining the financial stability and data security of consumers by identifying the legitimacy of the funding body.
For seamless onboarding, the businesses must implement an effective KYI strategy, which, in the long term, serves as a professional and satisfactory relationship with the business entities. However, with KYI solutions, the organizations are facilitated with data verification, automated systems, and optimised security protocols.