Cybersecurity and KYC used to be two different worlds. Cybersecurity has been traditionally associated to antiviruses, firewalls and any other means by which a company would try to to shield itself from outside threats, whereas KYC was the process by which companies ensured that their customers pass all the security checks and ticks all the security boxes before they are fully onboarded.
These two worlds are now merging into one. The Coronavirus pandemic has caused a surge in online business with cyberthreats becoming a part of everyday life for organizations.
In a recent survey by Check Point Software & Dimensional Research, findings showed that 71% of IT and security professionals globally report an increase in security threats and attacks since the Coronavirus outbreak started.
What is the role of KYC in the battle against cybercrime and how should companies address the changing landscape?
KYC Should Be Paired With A Cybersecurity Policy
The 2020 Global Identity and Fraud Report by Experian found that 57% of businesses report higher fraud losses associated with account opening and account takeover.
It’s becoming very apparent that threats are infiltrating the KYC process. Companies can no longer treat cyberthreats as one-off instances. It’s clear that the KYC process needs additional layers of protection.
There is a burning need to truly identify digital identities for all customer touch points. How can businesses do that? Here are a couple of ways:
- Knowledge: Enrich the number and difficulty level of questions used to verify online identities.
- Documentation: Invest in the technology used to identify documentation. Machine learning and artificial intelligence are at the forefront of this sector.
- Biometrics: Use fingerprints, voice, and facial characteristics to verify a user’s identity.
- Database cross-reference: Use any online databases you can to verify a customer’s identity. From social media to credit bureaus, make sure that facts check out.
By adding extra security padding to your KYC and onboarding process, cybercriminals have less cracks to sneak through.
KYC Staff Training
The role of KYC professionals is constantly changing. From manual checks and boring data import, the KYC professional has been asked to become a data evaluator and a decision maker in the span of a few years.
It should come as no surprise that the role is taking a step towards further evolution. KYC staff should stay up to date with the latest breaches and criminal trends. Their role is no longer limited to identifying customers who are unfit to be onboarded. Now, they will be asked to also identify fraudsters posing as customers.
Don’t Sleep On B2B Operations
Know Your Business (KYB) is as important as KYC. Engaging with other businesses should never put your mind at ease when it comes to cybercrime.
Your process should be as strict, if not stricter, as when you are onboarding a new customer. You should ensure they have the right processes and frameworks in place to block, sustain and recover from cyberattacks.
Whether you are entering a partnership with another company or you are acquiring them, their KYC and/or cybersecurity mishaps immediately become yours. Review their data protection and cybersecurity practices and apply the necessary changes.
Phishing, Ransomware & Fake Documentation
Phishing activity has surged through the pandemic and so has ransomware. Not to mention fake documentation. The pandemic has created opportunities for cybercriminals to thrive and is simultaneously creating new security demands for businesses.
Businesses are asked to adjust their risk tolerance and this is where technology comes into place. Businesses using flexible KYC and cybersecurity platforms will be able to toggle controls, operating at a lower level of trust. They will be able to analyze and understand fraud risk in real-time. Only artificial intelligence and machine learning technologies have the ability to problem-solve at such high clip, once again proving that they are the future of the industry.
KYC and cybersecurity can now be used in the same sentence. The pandemic has shifted the security paradigm, asking a lot more from companies that want to keep their customers, data and reputation intact.
Don’t let your guard down and always keep an eye for the technology solution that is diverse enough to drive your company forward.