Why is Verification of Document Necessary in Financial Firms? 

If institutions aren’t verifying documents, they are positioning themselves at threat of being conned. Studies revealed that imposters try to fool loan agencies, banks, and credit card firms to extort money. They usually do it by using a combination of counterfeit and stolen documents. In 2022, research shows that document fraud led to an astonishing 43 Billion US dollars. Unfortunately, fraud incidents usually persist in the finance sector and gradually rise due to the pandemic. Due to this reason, financial institutes face bankruptcy. The verification of documents can quickly solve this problem. 

How can the Financial Industry Benefit from Document checkers?

Endorsing more applications is the primary goal, but employees have to do it without putting the firm at risk of financial and fraud loss. Hence, identity verification solutions made it possible: 

Here are some ways that financial industries can benefit from this: 

• Age Verification 

Ensuring that users are 18 or older can deter legal ramifications. 

• Fraud Prevention 

Preventing fraud is the primary goal of any firm, and document verification software detects different fraud types. This includes loans used for criminal intentions who steal identity documents to present wrong data. 

• Cybersecurity

Document verification secures firms from imposters since it precludes unauthorized access to critical information. 

• Client Satisfaction 

Document validation services provide instant services to satisfy users. 

• Minimize Operational Costs 

Verification of documents restricts human mistakes and the time used to analyze documents. 

Verification of Document Benefits

KYC verification ensures firms that their client( they do business with) is legitimate and credible. Doing so can protect companies from making illegal business relationships with substantial adverse outcomes. Know Your Customer performs a robust risk assessment of potential entities and clients before abiding by them. It helps to mitigate issues and losses with specifically risky entities. Hence, KYC helps improve client relationships by providing real-time financial insights. 

Document checker helps to reduce the following: 

• Identity Theft

KYC verification needs a user to give proof of their identity. It requires that relevant efforts be made to ensure the client is authentic. This makes things difficult for imposters to create fraudulent accounts with forged data or stolen credentials. However, document verifications provide that only the correct entities can access the firm’s services. 

• Financial Fraud

Since COVID-19 began, imposter activities have grown by almost 50%, costing firms almost 5% of their annual profit. Moreover, each $1 fraud costs 4$ in financial companies. Financial fraud is a burden on the company that’s why document validation services eradicate fraud by preventing bad actors from impersonating genuine clients using stolen credentials or IDs. 

• Money Laundering

Money laundering is shifting money acquired through criminal or illegal means to shift it into legal monetary value. It is usually achieved via dummy accounts that offenders can set up to “launder” money via the sale of smuggling, narcotics, and human trafficking. Moreover, terrorists use different agencies and accounts to fund their operations. Document checker tracks reports, monitors financial transactions, and alerts users if suspicious activity is detected. 

Document validation services compare the user name trying to create accounts against a watchlist, blocking suspicious terrorists from using these financial services. Government agencies can easily track money that is generated or transferred. 

Types of Financial Data that Lenders Verify

The most usual type of financial data verified by lenders is:  

Account Holder Name: Match the account holder with applicants

Account Number: Ensures the bank account belongs to the right user

Balance Information: Determines that the borrower has cash for deposit or good saving habits

Length of Term: Determine the consistency of the borrower completing payments over time. 

Account Type: Determine if the bank account is personal or for company check saving reserves

Closed and Open Status: Determine if the borrower has multiple accounts

Account Closing Balance and Date: Determine the time period of the loan and if it is paid off. 

Why is Bank Statement Verification Important? 

Lenders should know the customer’s ability to repay the loan during application approval. The authentic way to know is to analyze their financial statements. It helps in verifying income and shows their abilities. Moreover, it also helps authenticate bank statements by analyzing user spending habits that aid in making faster and better decisions.  

Key Takeaways

Verification of documents in organizations is essential to ensure a client is legitimate. It also scans accounts and financial transactions throughout the business process. Firms must reasonably ascertain clients’ originality using a document checker. Employees have to accumulate the client’s name, address, birth date, and ID number to verify all of these via different means. 

Clients must provide proof through government-issued details. Moreover, firms use resources such as document-based verification methods such as facial recognition and other biometrics forms.