Customer Identification Fulfilment Mistakes – How to Overcome Them?

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Determining customer identity online is one of the most important factors in any business. You need to ensure that you are dealing with the right person so that your company does not fall prey to fraudsters, hackers, and other cybercriminals. 

For a business to be able to do this, it needs to have an effective and reliable means of identifying customers’ identities. AU10TIX’s customer due diligence can be one of the best ways for businesses to protect themselves from identity theft by using biometrics technology.

Data Breach

A data breach is a cyber-attack that involves the theft or loss of data. It can occur when an organization fails to secure its systems and information, allowing them to be compromised by hackers. Data breaches can also happen unintentionally, such as when an employee loses their smartphone or laptop containing sensitive information.

Data breaches are divided into four types:

  • Internal – Theft from within your own company
  • External – Theft from outside your company (e.g., hackers)
  • Accidental – An employee accidentally loses electronic devices containing private data. This type of breach happens most often due to human error, which makes it difficult for organizations to prevent it altogether.
  • Malicious – A malicious employee intentionally steals electronic devices containing private data.=

Incorrect Customer Identification

All customer identification information is critical, but some of it is more important than others. For example, if you’re asking for a person’s name, address, and date of birth. This information could be enough to access their account without any further verification requirements. But otherwise, you’ll need something else. 

A photo ID alone won’t work because anyone with the right knowledge could create one using Photoshop or another image editing software package. A passport can help authenticate an identity but isn’t always available on-site (especially if the client isn’t traveling internationally). In addition to checking against government databases that hold this data in bulk (like those offered by WorldCheck), companies should also require at least two out of five pieces of proof:

  • The customer’s photo
  • Their fingerprint or handprint
  • Their voice patterns when speaking into an audio recorder
  • A signature is handwritten on paper within three seconds after being prompted by a device.
  • Facial features captured via webcams during live video chats

Stolen Credentials

Stolen credentials are a serious problem for organizations that rely on digital channels to interact with customers. When you consider the prevalence of stolen credentials, it’s important to know how they arise and what can happen about them.

What are stolen credentials? A stolen credential is any user ID or password that has been compromised by an unauthorized party. They can get access to them whether through hacking, phishing, or other means.

Why should I care? You need to care because stolen credentials can have serious consequences on your business. They will allow hackers access to your systems, customer data, and money transactions. Plus, if the hacker uses the same account on your website as he was using in another company’s system then it becomes difficult for both organizations to identify who carried out an attack.

Poor Password Practices

As you have probably noticed, passwords are an important part of user identification. However, a lot of people make mistakes when creating and using their passwords. Here are some of the most common mistakes:

  • Using a weak password that is easy to guess or brute force. Your password should be unique and long enough to prevent hackers from guessing it or brute-forcing it within a reasonable amount of time. It should also be strong enough that even if someone does gain access to your account by guessing or brute-forcing your password, they won’t be able to do much damage since they will only be able to do so temporarily before you change it again.
  • Sharing your passwords with others so they can log into your accounts while you’re away (or worse yet; allowing them full access).
  • Using personal information like birthdays, addresses, or pet names as passwords.
  • Using the same password for different accounts.

Lack of Compliance

KYC is a legal requirement, it is a regulatory requirement and it is also becoming a global requirement. It’s no longer just an internal process for financial institutions; it should be considered an integral part of your customer experience.

KYC has become not only an important regulatory tool but also a key component of any compliance program in today’s digital economy. 

Achieving full compliance with KYC regulations requires a significant amount of time and effort because each country has its requirements and processes to follow.

Hiring An Agency

If you are looking for an agency to conduct KYC, then you should be aware of the risks and how to minimize them. The first step is to ensure that the agency has enough people to conduct due diligence on your clients. You also need a system in place so that all information related to clients is stored securely and can be accessed by authorized personnel only.

An agency or a third-party service provider (TPSP) needs to follow certain procedures when conducting KYC compliance checks on your customers. It is especially if they are from foreign jurisdictions or countries with no existing bilateral arrangements with the home country. 

In addition, there should be adequate internal controls in place so that any suspicious activity can be detected quickly and reported immediately. All this without compromising operational efficiency or creating undue delays in onboarding new customers.

Eliminate Fraud Risks

Customer Identification and Verification are the first and foremost stages of the KYC process to eliminate fraud risks.

Customer Identification is the process of verifying the identity of a customer. 

It is a critical part of KYC or Knows Your Customer regulations that financial institutions have to follow to prevent money laundering activities and other financial crimes. CID is also called ID verification in some countries.  


Most of these mistakes can be avoided by implementing some basic strategies. For example, maintaining an up-to-date database that includes a contact list with all relevant details such as email addresses and phone numbers will ensure that customers are kept informed of any changes or developments. 

You can keep track of your customer’s personal information through simple software like Excel sheets or even Google Sheets. Having this data on hand allows companies to quickly provide help when needed (e.g., if someone needs their password reset). It also makes it easier for you to send out notifications regarding upcoming updates and product launches, which will help build trust between your business and its customers!

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