Implementing KYC/KYB for fraud prevention
Learn how we helped our client integrate with KYC (Know Your Customer) and KYB (Know Your Business) services to verify individual customers and businesses during onboarding and to protect the bank’s assets from fraud.
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industry
FinTech
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Country
USA
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team size
10 IT experts
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Collaboration
October – December 2021
About the client
Our client is a US-based investment bank that helps businesses raise money for their development by selling shares in the business to investors. The bank also provides advice on mergers and acquisitions to help businesses reach their full potential.
Business context
Our client decided to build their own investment management platform from scratch. Among their needs was implementing KYC and KYB functionality to:
- Comply with AML requirements
- Ensure proper protection against fraud
The client hired Yalantis based on our previous experience working with such solutions and our relevant expertise.
Solution overview
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Implementing KYC
We developed a system compliant with KYC rules aimed at detecting fraud at the stage of account creation. To do that, we established integrations with four third-party services: iOvation, Socure, IDology, and Jumio. This helped us achieve compliance at four essential levels:
Level 1. Making sure that a user’s device is not blacklisted and is eligible to sign up.
Level 2. Verifying users’ personal information, including first and last name, email address, phone number, and social security number (SSN) to detect the risk level (low, medium, high).
Level 3. Users with medium and low risk levels are asked to answer several randomly selected questions about themselves to become eligible to use the system. Questions are generated based on information the user has provided during the previous stage.
Level 4. To perform ID verification online, users are requested to provide a government-issued photo ID or a driving license. Further, the user needs to take a picture of themselves. Next, the photo on the ID and the picture are compared to prove the user’s identity.
We built an interface that allows our client to adjust the strictness of the checks using data obtained from the third-party services mentioned above.
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Implementing KYB
Business verification includes all steps in the KYC process. We also partnered with LexisNexis to help our clients verify a company’s information and conduct background checks, covering details about the business, its founders, its stakeholders, and other related matters.
With LexisNexis, we:
- Provided the client with business identity and risk assessment data
- Automated screening and due diligence processes
- Enabled ongoing monitoring and alert capabilities
- Provided access to global sanctions and watchlists
- Streamlined compliance with regulatory requirements
Value delivered
By implementing KYC and KYB procedures, we helped our client:
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Enhance customer verification, minimizing the amount of fraud by preventing fraudsters from using fake identities to open accounts, make transactions, or apply for loans
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Create advanced risk management functionality that helps to identify high-risk customers and businesses that may require additional checks to reduce the likelihood of fraudulent activity
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Ensure early fraud detection, enabling businesses to take urgent action to prevent fraud at an early stage
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Establish compliance with AML and CTF requirements to implement KYC and KYB procedures
PROTECT YOUR BUSINESS AND CUSTOMERS FROM FRAUD
Yalantis can implement comprehensive fraud prevention and detection processes to secure your business’ and customers’ assets
