The most wonderful time of the year is here! But for many fraudsters, it’s also the most lucrative.  

With the rise of identity fraud already posing a threat to a vulnerable economy—and Cifas’ Fraudscape 2023 report recording the highest ever volume of identity fraud cases in 2022—this is only set to peak during the festive shopping season.  

For businesses this can be detrimental, putting them at risk of reputational and financial loss, and severe penalties set by regulatory bodies. But with more money and personal information being shared online during the seasonal period, how can businesses protect themselves from bad actors? Let’s find out.

1. Analyse your KYC checks

Staying vigilant is important all year round if you want to remain on the right side of the anti-money laundering regulations. But with festive shoppers being a target for fraudsters looking to steal identities and carry out financial crime, there’s no better time than right now to get your Know Your Customer (KYC) processes in order.  

Looking at what you’re currently doing and matching it against what the legislation and regulators recommend is a great starting point. Once you have highlighted the gaps that need bridging, you can then start to think about how to upgrade your KYC checks. This could look like implementing new checks, running checks on current customers and ensuring these are ongoing, or consulting compliance businesses and experts.

2. Enhance your identity checks  

The verification of customer identity is one of the most essential checks you’ll need to carry out to keep your business from being manipulated by financial criminals this festive period. While you’re probably already conducting some sort of KYC check, there’s no better time than now to put extra strength behind these.  

When your team is having to do these manually, there’s not only chance for human error to occur due to the complex nature of an identity check, but it can also significantly eat into your customer onboarding time. This can be off-putting for customers, and with so many other businesses ready and waiting to make a sale, can actually deter legitimate customers from purchasing from you.  

Automating the process can help to not only navigate these challenges, but also open up more thorough verification processes. For example, biometric checks can include liveness checks which compare your customer’s uploaded identity documents with a live selfie! As well as enabling enhanced compliance, it can ensure the right checks are carried out no matter where your customers are based.  

3. Train your team on fraud detection 

Once you’ve invested in robust KYC checks, it’s crucial that you ensure your team know how to use these and how to interpret the results the tools return to them. The best way to do this is to provide training from experts who can help your teams to spot the tell-tale signs of fraud, and how to act quickly to prevent these from turning into successful money laundering missions.  

This training should focus on educating your teams about AML legislation, and therefore their duties under your employment. For example, it could include: 

• A definition of money laundering and discussion of its impacts  
• Common forms and methods of money laundering they may see  
• AML legislation covering due diligence, PEPs, and sanctions 
• Importance of monitoring  for status and behaviour changes 
• Examples of suspicious activity and how to report these to the National Crime Agency 

4. Update your AML policy documents

Your AML policy documents should be a constant source of correct information on handling AML matters for your employees. Not only do they help to ensure everyone is clued up on managing and mitigating risk, but that it’s always done following the same business- and regulator-approved procedure.  

These documents should also include disclosures of suspicious financial behaviour from any customer. The advantage this gives is that your teams can take note of any suspicious behaviour patterns and keep an eye out for these in their own cases moving forward.  

Once you’ve made changes to your AML policy documents, it’s vital you reshare these with your teams and delegate them time outside of their normal tasks to get to grips with the changes and have time to raise any queries or concerns.       

Don’t let fraudsters spoil your festive cheer this year. Make sure you only do business with those on the good list by conducting robust KYC checks, fostering knowledgeable and vigilant teams, and keeping AML resources up-to-date.

Need a hand with this? We can help.

We offer no-contract KYC and AML checks that can keep risky ‘customers’ at bay. Simply get in touch today to chat to our team, or to request a free demo!

Author

Richard Devine

Account Director

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