Financial fraud poses a severe threat to businesses across Canada. Digital transactions and client onboarding are continuously on the rise for businesses across every industry. Digital transactions have made Canadian companies more vulnerable to various types of fraud, such as identity theft, account takeovers, and phishing scams. Some fraud stats will also help to understand why these fraud types are a severe concern for companies and organizations in Canada, as they are:
| Type of Fraud | Details |
|---|---|
| Investment Fraud | $309 million lost in 2023 – In this financial fraud stats, half of the frauds are related to crypto scams. According to the Morningstar News, people are doing fraud by making the fake profile and promises of high returns on investments via social media, dating websites, and emails. |
| Credit Card Fraud | TransUnion Newsroom says that the global digital fraud volume has surged by 76% from 2019 to 2022, accounting for 6.5% of all such transactions. |
| Synthetic Identity Fraud | Global fraud incidents have seen a 132% increase from 2019 to 2022, with this category comprising 5.3% of all such incidents (TransUnion Newsroom). |
| Phishing | The Morningstar reports on fraudulent activities that involves using human psychology and social engineering to deceive victims. |
Canadian businesses must adopt innovative background verification methods to safeguard their businesses from financial fraud. Background checks are paramount for financial and non-financial industries to know whether their customers are genuine or not during the onboarding process. Multiple identity verification methods help verify the background of new clients.
ID Verification:
ID Verification helps authenticate a single ID document and ensure whether the identity is real or not. It also helps with quick identity verification and a fast onboarding process.
Document Verification:
This verification method helps to authenticate utility bills and other documents to verify identity.
Age Verification:
Age verification helps to verify the customer’s age and prevent underage customers from purchasing. It also ensures that the right customer purchases any age-restricted product or service in the Canadian market.
KYC Verification:
KYC verification is an identity verification method that assists in identifying and verifying the identity of the business client. This process requires ID documents like a Passport, Driving license, government-issued ID card, and utility bills to authenticate the client’s identity. It ensures genuine identities for businesses and prevents identity fraud and theft in the digital age.
Video KYC verification:
Video KYC is the latest identity verification that is completed on a video call. An agent verifies the customer’s identity on this video call and asks questions regarding their identity. It allows the agent to match the face with the customer’s government-issued identity card photo on a live call and minimize identity fraud completely.
AML Verification:
AML verification is another identity verification that helps to check the background of the client and whether they are associated with money laundering or not. Identity verification through various adverse media databases, PEP, sanctions, and watchlists for complete background checks. It mitigates financial risk and prevents money launderers.
Transaction Monitoring:
This type of monitoring is used for background checks in real-time. Artificial intelligence and machine learning algorithm-based identity verification solutions help to identify the unnatural behavior of transactions and give a red flag for suspicious transactions associated with money laundering. It helps Canadian companies and organizations to check suspicious activities in real-time and prevent financial fraud.
These identity verification methods help to prevent financial fraud for Canadian businesses in 2024. Therefore, identity verification systems play a huge role in helping companies authenticate identities and build a robust security system that allows only legitimate identities.
Fraud Prevention Companies for Businesses in Canada:
For Canadian businesses looking to mitigate fraud risks, partnering with fraud prevention companies is a strategic investment that helps for business growth. Multiple fraud prevention companies in the Canadian market assist in fraud prevention for financial and non-financial enterprises. These companies provide advanced technology-based identity verification solutions to Canadian businesses. Therefore, choose a trusted and reliable partner to secure business, enhance the client onboarding process, and build trust and reputation in the competitive market.
KYC Canada is one of the trusted KYC solutions providers and works proactively to make fraudless business in the Canadian market. They offer comprehensive identity verification solutions for complete background checks and help in identifying identities that belong to money laundering, terrorist financing, tax evasion, drug trafficking, and other illegal activities. They provide KYC API for banks, financial institutes, cryptocurrency, insurance, fintech, healthcare, forex, online gaming, telecom, education, travel, real estate, logistics, and other sectors.
Conclusion:
A robust identity verification system is paramount for Canadian businesses to combat money laundering and identity fraud as digital transactions and online engagements continue to rise. KYC Canada is a leading KYC services provider that helps to minimize identity fraud and theft and assists in quick identity verification during the onboarding process. Therefore, partnering with a trusted KYC company is significant in dealing with financial threats and fraudsters. Digital identity verification systems help to stay ahead of the curve in the competitive market and ensure secure business transactions with new clients. It is a strategic investment that helps in future business growth and protects businesses from financial criminals.
