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KYC – Mitigating the Risks of Document Frauds in Businesses


The recordkeeping phase of any process is essential. It guarantees the legitimacy of each operation, whether for a legal or personal procedure. In actuality, records that the state’s national authorities issue serve to present our identity around the globe. Additionally, as the world becomes more digital, a growing number of online document verification certifications help to verify identities online. Our online personas are increasing the risks of document frauds because more false identities and fake documents are being created online, according to cyber authorities. 

What is Document Fraud?

When fraudsters commits document frauds, they fabricate new documents or alter existing ones to take on a new identity. The online systems are then used improperly and illegally using this identity. False documents are created in an effort to circumvent security measures in the system. Attackers breach vital online infrastructure, including financial platforms and other social media systems, in order to steal user identities and transfer money. The authorities have developed strict laws to counter these actions of attackers. There are a number of ways attackers commit document frauds.

  1. Counterfeit Documents: 

The attackers create precisely the exact imitation of the official documents, which are unverified by the authority or the provider of those credentials.

  1. Forged Documents: 

By adding or changing the information in those credentials, attackers manipulate the original records using this technique of document frauds.

  1. Pseudo Documents: 

Pseudo documents come into existence by completely replicating the original documents. There is not a single institution or organization that accepts these identity papers.

Purpose Of Manipulating Documents

Every person’s document contains all the information pertaining to their identity, nationality, etc. The majority of industries place a high priority on document verification in order to safeguard their clients and other resources from unethical practices. It is also a necessary phase of Know Your Customer (KYC) compliance. 

As KYC checks are necessary for the majority of industries, the clients must give their supporting documentation to the appropriate organization. For example, the travel industry requires the passport of the customer to verify their identity before letting them onboard a new flight. Every business sector needs to follow this procedure. Scammers make fake passports that contain entirely false information in an effort to trick the travel authorities. 

Online Document Verification Process

Verifying records online is efficient and takes less time than the traditional document verification method. The authentication process cycle now moves much quicker thanks to new technologies like AI and machine learning.  The companies are implementing the online validation system to check their users and clients at the time of the onboarding phase. Businesses comply with AML/CFT laws and KYC regulations in the online document identification process. With an online document verification system, users can opt to verify them using online platforms, which involve a number of processes and stages.

  1. Uploading Documents

The digital files containing the document copies, which are primarily images from the mobile camera, are uploaded to the online system. A user submits documents to the company’s system, which then receives them and goes through additional processing to verify them.

  1. Document Validation

Systems for online document validation are created using the most recent computer language jargon. Artificial intelligence systems are efficient in validating documents and checking for falseness or forgery. Thousands of document data sets make up the system. This uses machine learning to process and validate the document images that the user uploads. 

  1. Document Verification

The verification process involves the use of optical character recognition technology, which is getting better each day with new updates and fixes. The OCR technology is responsible for extracting the text from the validated documents for verification. The data is extracted from the records and compared with the user-provided credentials to verify their integrity. The whole process is completed online in a concise amount of time as compared to the traditional document verification method, which can take up to days to verify a user.

Document Requirement

Different companies in various sectors require enormous types of documents as per their preference. For example, organizations keen on verifying personal identities will opt for the original identity cards and proofs that provide identity information, such as the customer’s image or a user’s name. Other sectors, such as banking and finance, will also require the financial or banking statements of the users to verify them.

Wrapping It Up

The number of document frauds is rising every day as attackers develop new techniques. Cybersecurity companies and other service providers are using online document verification for the purpose of validating documents via online channels. This verification method is fast and provides efficient results, which helps restrict the attackers from the online systems of companies.

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