Ever wondered why financial institutions ask you to provide them with a range of basic information to do business? Well, it’s so they can protect you and prevent fraudsters from gaining access to your money, and to remain compliant with regulations so they can keep serving you. The confidential information they require starts the KYC process.
What’s KYC?
KYC or Know Your Customer requirements are in place to ensure the legitimacy of clients. Financial institutions will ask for certain documents, such as your driver’s licence, passport, utility bills, bank statements or rental agreements to help verify your identity.
Although technology is reducing the paperwork and increasing convenience for customers, as with all innovations, there are gaps that criminals will try to take advantage of. If you’re not careful, you could fall victim to KYC fraud.
What’s KYC fraud?
KYC fraud typically involves criminals exploiting vulnerabilities in the identity verification process and stealing your personal information to impersonate you. Some of the popular methods criminals have been using to carry out fraud, are phishing, smishing, email hijacking and SIM swapping. Deepfake technology is also being used to deceive KYC systems (refresh your knowledge about these methods by clicking on the words).
The consequences of falling victim to KYC fraud can be severe, but you can stay ahead of criminals and avoid becoming a victim. Here’s how.
- Stay informed. Keep up to date with the latest KYC fraud trends and tactics by reading newsletters, like this one, and other information provided by your financial institution. Knowledge is the first line of defence and knowing what to look for can help you to avoid becoming a target of criminals.
- Secure your personal information. Never share your personal details, such as your card PINs or account passwords. Be cautious about sharing information online and avoid sharing confidential details on social media. Where possible, enable 2FA or two-factor authentication to make it is more challenging for fraudsters to gain access to your data.
- Use secure channels. Avoid using public Wi-Fi networks, especially to access sensitive information. Ensure you also interact with secure platforms with ‘https://’ in the URL.
- Regularly monitor your accounts. Pay attention to your bank statements and sign up for alerts so you can be notified or spot any fraudulent activity immediately. Report any suspicious activity to your financial institution.
- Verify all requests for information. Always be sceptical of any requests for personal information. Legitimate organisations will not ask you to share sensitive details via email or on the phone.
- Keep your KYC documents current and up to date. Ensure your financial institution has your current phone number and email address for clear and constant communication. If you’ve changed addresses or changed names, you should also make them aware so that they will know it is still you who they are doing business with. If you suspect your information has been compromised, contact the institution to have it changed immediately.
