How will the pandemic impact the future of identity verification and client onboarding?

Allowing staff to work from home used to be viewed by many employers as a bit of a risk – would they actually be working? Would they be as productive? And as a result, working from home was certainly not commonplace. In fact, in 2019, just 3.4%* of the entire US workforce was working remotely. 

But then, the pandemic hit and everyone who could work from home was encouraged to do so and now, it is estimated that around 42%* of all US workers are working from home. That is a 12-fold increase, pretty much overnight.

And while the reason behind the switch was necessity rather than choice, the result was the same – a quick - and in most cases, successful - shift from a predominantly office-based economy to one that is operating primarily from people's homes.

It is safe to say that many businesses have been pleasantly surprised as they have come to realise that employees are just as productive, or perhaps even more so, when they are working remotely than when they were office-based.

However, while the logistics behind setting up employees to work from home may be fairly straight forward for some industries, for others - namely, banks and other financial institutions who need to complete background checks - it is not quite so easy.

Can you run proper background checks from home?

One of the big issues facing financial institutions is being able to verify the identity of new employees and customers when you cannot see them face to face.

Is it possible to make any new hires during the pandemic?

Is a background check enough?

Well, the answers are yes and no.

It is definitely possible to hire during a pandemic – and to onboard new customers – but putting the right checks in place is imperative and often a background check is simply not enough since it won’t necessarily include verifying the identity of the person.

Many businesses may think that if they are hiring someone for a temporary or contract job, proper identification and verification is not necessary, but it is just as important as if you were taking on a permanent staff member. You could argue that someone completing a short project with a firm could be an even bigger risk, as they would have enough time to commit fraud and be long gone before anything is detected.

That is why it is vitally important that you have proper procedures in place, not only to ensure that you are able to complete full and comprehensive checks on any new hires and new customers, but also so that all current employees understand these procedures, why they are important, and what to do if they do find anything suspicious.

Has the pandemic forced financial institutions to adapt?

With the pandemic now impacting the way in which banks, credit unions and other institutions can carry out identification, verification, due diligence and screening, many have now been forced to turn to third parties to for support.

And while this may have been an accidental step forward for the market, it is a step forward all the same. On the whole, banks and other financial institutions have been quite slow to adopt technology for verification and onboarding, but as a result of Covid-19, many now have better verification procedures than ever before, and are starting to reap the rewards.

The business benefits on online checks

Online identity verification is the most robust, reliable and efficient way of performing ID checks. Not only that, but electronic systems are also able to run all the relevant onboarding checks - including anti-money laundering checks, fraud checks and screening against sanctions lists – as part of the same process, meaning just one system is needed for full compliance.

Not only does taking on a system that can run all these checks allow customer onboarding and new hires to continue during social distancing, but it also has huge benefits in 'normal times' because it is quicker and easier than running checks manually.

Many of these systems offer ongoing monitoring services too, which means all checks are regularly monitored, so your business will remain compliant going forward – a huge factor to consider when complying with the BSA anti-money-laundering rules.

So, while many banks, credit unions and other financial institutions may have been forced to change the way they run their AML & customer identification programs because of the pandemic, the result is that online technology means they now have much more robust systems in place.

The future of customer verification is online  - all businesses would likely need to switch at some point anyway – and the pandemic has brought this forward, and those who have made the switch are benefitting sooner rather than later.


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