Financial companies are one of the top targets of scammers and cybercriminals. Certainly, online banking streamlines daily lives in various manners. People can now buy anything at any time from far-off locations and pay utility bills, online fees as well as challans. Internet fraud is on the rise due to transactions taking place online. Consumers and industries have lost thousands and millions of dollars in online fraudulent dealings over the last few years.
Financial institutes must quickly introduce transaction screening solution to prevent fraud. Banks and financial enterprises can deter crimes with the help of monitoring bank transactions. Let’s look at how the KYT service protects online payments for firms and individuals.
An Overview of Transaction Screening System
Before onboarding fresh customers/users, financial companies including banks have a major obligation to accomplish comprehensive know-your-customer checks. Moreover, to keep an eye on regular activities, banks should also follow the everyday transactions of the current clients.
Financial institutions can keep an eye on every transactional data to spot suspicious ones by utilising tools based on KYT. Additionally, transaction screening solution enables banks to understand crucial details about their clients. For example, name address, transaction purpose, and other relevant facts. Money laundering and the transaction are the most common practices of using fraudulent techniques to send black money. Let’s dive deep into transaction laundering.
Transaction Laundering at a Glance
Money laundering and transaction laundering are almost identical, the only difference is that transaction laundering occurs online. Additionally, advertising various services is typically done by making a bogus website that works just like a real one. People transact on the site thinking that it is legitimate. Moreover, these websites show different transaction options to receive illicit money, which scammers deposit into the banks to become legitimate.
How KYT is Essential for Banks?
Banks must keep a record of what their clients are doing. Thus, they should have every single piece of information about the transactions the client has made. To monitor which user conducted the transaction, banking institutions use various characteristics, such as transaction patterns and payment codes. Transaction screening solutions help identify consumers who are committing illicit activities or causing them damage through fraudulent conduct.
Moreover, transaction screening systems help banks tighten up their know-your-customer procedures to prevent financial theft and maintain system security. The combination of AI, as well as machine learning, allows banks to create robust transaction processes. This makes it much more difficult for scammers to compromise these systems. Additionally, banks can utilise blockchains to execute secure transactions and build firm B2C bonds. Further, look at how the blockchain helps the know-your transaction monitoring.
Blockchain Technology
To ensure that nobody obtains or alters the sensitive data whenever the user conducts a transaction, the details are dispersed over multiple network blocks. Moreover, banks utilise Distributed Ledger Technology (DLT) to record transactional data and employ a distributed database to function as a ledger. The blockchain network also helps financial companies to secure their system and prevent transaction laundering.
How Does Enhanced Due Diligence Facilitate KYT Procedure?
Clients enlisted in high-risk classifications for money laundering are identified with the help of EDD. Additionally, it helps in verifying transactions that are not possible for customer due diligence. Companies should conduct enhanced due diligence in the following order while dealing with high-risk transactions.
Risk-based Approach
By categorising customers as per the chances of risk, it assists compliance experts in getting details about their clients better.
Create EDD Checklist
Making an index enables banks to track high-risk customers and other clients in multiple lists to quickly identify them.
Analysing Source of Money
Since illicit money cannot be invested in businesses, banks must verify the actual source of their clients and the beneficiary.
Ongoing Transaction Monitoring
In order to build strong relationships, it is necessary to regularly monitor customers. The analysis of a corporation’s reputation and address verification help the banking sector make transaction screening solutions secure.
Conclusion
Financial companies need to prevent fraud using monitoring of transactions in KYC. Transaction screening solutions enable the banking sector to boost its services and offer a completely safe environment. Also, it prevents industries from avoiding heavy fines and helps in meeting security standards.
Not only this, but refined KYT solutions are incredibly user-friendly and result in building a remarkable reputation for banks and other financial companies. So, if corporations are looking to provide their customers with extraordinary experience and super security while making a purchase, the KYT solution is the most suitable choice.
