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3 Ways In Which Artificial Intelligence Improves KYC For Your Business

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3 Ways In Which Artificial Intelligence Improves KYC For Your Business

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In today’s data-driven landscape, businesses need to involve artificial intelligence (AI) in KYC verification to smoothly collect and process vast swathes of customer information accurately.

With several businesses completely digitizing their operations and the forever rising ubiquity of the internet, Know Your Customer (KYC) compliance has become increasingly challenging today for organizations. KYC involves the background verification of clients to ensure that businesses meet their regulatory compliance requirements. Today, KYC has become extremely data-heavy for businesses as they expand their customer base. The usage of AI in KYC compliance and verification allows businesses to process massive amounts of data with zero error. Here are some qualities that AI brings to the KYC table:

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1) Improving Transaction Monitoring

As the number of customers increases, so does the number of transactions. Major organizations need to control millions of such transactions by using AI in transaction monitoring. Active transaction monitoring is a necessity for businesses under Anti Money Laundering (AML) regulations. One of the main problems in transaction monitoring is the number of false-positive alerts generated by standard systems. False-positive alerts incorrectly flag normal transactions as fraudulent. Involving AI in KYC-based transaction verification reduces such false alerts through behavioral tracking of payers as well as past transactions.

2) Managing Regulatory Compliance

AI and NLP tools can detect patterns and anomalies in large stretches of text. This attribute allows such systems, and, by extension, the businesses implementing them, to understand and comply with circulars or massive swathes of text related to KYC and AML regulations in official documents made by governing authorities. Additionally, NLP can inform clients and businesses about regulatory changes made by such authorities and the implications of such changes on all the stakeholders.

3) Facilitating Enhanced Due Diligence

AI-enabled enhanced due diligence allows businesses to know about potential business partnerships and business risks associated with certain customers much more accurately compared to standard customer due diligence. Enhanced due diligence enables businesses to evaluate the risk category, business relationships, and financial activities of clients with greater clarity. This gives businesses the opportunity to make better choices regarding their business partnerships.

As implied earlier, businesses need to get KYC right in order to not suffer huge losses by doing business with high-risk customers. The involvement of AI in KYC verification allows businesses to do just that by performing big data analytics of customer records, transactions and other behavioral data.

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On email security in the era of hybrid working

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Cloud Computing News

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With remote working the future for so many global workforces – or at least some kind of hybrid arrangement – is there an impact on email security we are all missing? Oliver Paterson, director of product management at VIPRE Security, believes so.

“The timeframe that people expect now for you to reply to things is shortened massively,” says Paterson. “This puts additional stress and pressure on individuals, which can then also lead to further mistakes. [Employees] are not as aware if they get an email with a link coming in – and they’re actually more susceptible to clicking on it.”

The cybercriminal’s greatest friend is human error, and distraction makes for a perfect bedfellow. The remote working calendar means that meetings are now held in virtual rooms, instead of face-to-face. A great opportunity for a quick catch up on a few emails during a spot of downtime, perhaps? It’s also a great opportunity for an attacker to make you fall for a phishing attack.

“It’s really about putting in the forefront there that email is the major first factor when we talk about data breaches, and anything around cyberattacks and ransomware being deployed on people’s machines,” Paterson says around education. “We just need to be very aware that even though we think these things are changing, [you] need to add a lot more security, methods and the tactics that people are using to get into your business is still very similar.

“The attacks may be more sophisticated, but the actual attack vector is the same as it was 10-15 years ago.”

This bears true in the statistics. The Anti-Phishing Working Group (APWG) found in its Phishing Activity Trends Report (pdf) in February that attacks hit an all-time high in 2021. Attacks had tripled since early 2020 – in other words, since the pandemic began. 

VIPRE has many solutions to this age-old problem, and the email security product side of the business comes primarily under Paterson’s remit. One such product is VIPRE SafeSend, which focuses on misaddressed emails and prevents data leakage. “Everyone’s sent an email to the wrong person at some point in their life,” says Paterson. “It just depends how serious that’s been.”

Paterson notes one large FMCG brand, where a very senior C-level executive had the same name as someone else in the business much lower down. Naturally, plenty of emails went to the wrong place. “You try and get people to be uber-careful, but we’ve got technology solutions to help with those elements as well now,” says Paterson. “It’s making sure that businesses are aware of that, then also having it in one place.”

Another part of the product portfolio is with EDR (endpoint detection and response). The goal for VIPRE is to ‘take the complexities out of EDR management for small to medium-sized businesses and IT teams.’ Part of this is understanding what organisations really want. 

The basic knowledge is there, as many organisational surveys will show. Take a study from the Enterprise Security Group (ESG) released in October in terms of ransomware preparedness. Respondents cited network security (43%), backup infrastructure security (40%), endpoint (39%), email (36%) and data encryption (36%) as key prevention areas. Many security vendors offer this and much more – but how difficult is it to filter out the noise?

“People understand they need an endpoint solution, and an email security solution. There’s a lot of competitors out there and they’re all shouting about different things,” says Paterson. “So it’s really getting down to the nitty gritty of what they actually need as a business. That’s where we at VIPRE try to make it as easy as possible for clients. 

“A lot of companies do EDR at the moment, but what we’ve tried to do is get it down to the raw elements that every business will need, and maybe not all the bells and whistles that probably 99% of organisations aren’t going to need,” Paterson adds.

“We’re very much a company that puts a lot of emphasis on our clients and partners, where we treat everyone as an individual business. We get a lot of comments [from customers] that some of the biggest vendors in there just treat them as a number.”

Paterson is speaking at the Cyber Security & Cloud Expo Global, in London on December 1-2 around the rising threat of ransomware, and how the security industry evolves alongside this threat. Having a multi-layered approach will be a cornerstone of Paterson’s message, and his advice to businesses is sound.

“Take a closer look at those areas, those threat vectors, the way that they are coming into the business, and make sure that you are putting those industry-level systems in place,” he says. “A lot of businesses can get complacent and just continue renewing the same thing over and over again, without realising there are new features and additions. Misdelivery of email is a massive one – I would say the majority of businesses don’t have anything in place for it.

“Ask ‘where are the risk areas for your business?’ and understand those more, and then make sure to put those protection layers in place to help with things like ransomware attacks and other elements.”

(Photo by Cytonn Photography on Unsplash)

Want to learn more about cybersecurity and the cloud from industry leaders? Check out Cyber Security & Cloud Expo taking place in Amsterdam, California, and London.

Explore other upcoming enterprise technology events and webinars powered by TechForge here.

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