<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/marketing-cms/m2p-blog/2025/07/frm-blog-banner-04.webp" alt="M2P’s Advanced fraud risk management system for secure and trusted digital financial services." title="" id="lt7ml42w2" width="100%" height="253">Digital transformation has propelled financial services into a new era, offering speed, convenience, and global reach. But this progress brings a parallel surge in financial fraud, threatening the very foundation of trust and stability that underpins the industry.Understanding the Magnitude:&nbsp;<ul class="list-node" id="te5m7z0bz"><li>Illicit fund flows through the global financial system could reach an astonishing USD 4.5 to <a class="link" href="https://secretariat-intl.com/wp-content/uploads/2025/04/Secretariat-Global-Financial-and-Economic-Crime-Outlook-2025.pdf" target="">USD 6 trillion</a> by 2030</li></ul><ul class="list-node" id="kf4imf2r9"><li>AI-driven and deepfake fraud are set to drive a <a class="link" href="https://secretariat-intl.com/wp-content/uploads/2025/04/Secretariat-Global-Financial-and-Economic-Crime-Outlook-2025.pdf" target="">55–60%</a> increase in financial crime incidents by the end of 2025</li></ul><ul class="list-node" id="k9zhbrxoj"><li>Cyber-related fraud alone is expected to surpass <a class="link" href="https://secretariat-intl.com/wp-content/uploads/2025/04/Secretariat-Global-Financial-and-Economic-Crime-Outlook-2025.pdf" target="">USD 100 billion</a> by 2030</li></ul>To safeguard the future of finance, Fraud Risk Management (FRM) emerges as a strategic imperative, not just to combat fraud, but to redefine how we build trust in a digital world.Let’s explore the evolving fraud landscape and how FRM can lead us forward.<h2 class="heading-node" id="5dog23nkj" style="text-align: left">The Fraud Landscape: Key Threats Facing the Global Financial Ecosystem&nbsp;</h2>Financial fraud is evolving rapidly, with attackers leveraging sophisticated tactics and technologies. Among the most pressing threats are:&nbsp;<h3 class="heading-node" id="cxubxvksj" style="text-align: left">1. Identity Theft&nbsp;</h3>Fraudsters steal personal information, such as government IDs, bank credentials, or biometric data, to open accounts, make unauthorized transactions, or impersonate customers. The proliferation of large-scale data breaches and dark web marketplaces has made sensitive data more accessible to criminals than ever before.<h3 class="heading-node" id="1d6oulgjq" style="text-align: left">2. Payment Fraud&nbsp;</h3>Unauthorized transactions often stem from stolen credit/debit card details, hijacked payment accounts, or compromised digital wallets. Payment fraud can occur through card-not-present (CNP) transactions, card skimming, or account hacking.<h3 class="heading-node" id="lc8zuhxck" style="text-align: left">3. Account Takeover&nbsp;</h3>Cybercriminals gain unauthorized access to user accounts, often via phishing, credential stuffing, or social engineering. Once accounts are accessed, they can transfer funds, change account details, or commit further fraud.<h3 class="heading-node" id="plj4wyaqa" style="text-align: left">4. Investment Fraud&nbsp;</h3>Scammers present fake investment opportunities, often promising high, guaranteed returns to trick individuals or businesses into sending money. Ponzi schemes, pump-and-dump scams, and fraudulent ICOs are common examples.<h3 class="heading-node" id="bqw4rmmd0" style="text-align: left">5. Loan and Credit Fraud&nbsp;</h3>Fraudsters use fake or stolen information to obtain loans or credit, harming victims' credit and causing financial losses. This includes synthetic identity fraud and mortgage fraud, where applicants misrepresent income or property details to secure loans.<h3 class="heading-node" id="6cdw50btg" style="text-align: left">6. ACH Fraud&nbsp;</h3>Transactions on the Automated Clearing House (ACH) network are compromised by attackers using business email compromise (BEC) or forged payment instructions to divert funds from direct debits and credits.<h3 class="heading-node" id="ulv75dd2y" style="text-align: left">7. Phishing Scams&nbsp;</h3>Deceptive emails, texts, or calls trick individuals into revealing sensitive information, such as login credentials or payment details. Phishing remains one of the most common entry points for fraud.<h3 class="heading-node" id="cygf1e0dt" style="text-align: left">8. Synthetic Identity Fraud&nbsp;</h3>Fraudsters create entirely new identities using a mix of real and fake information, opening accounts and building credit before defaulting on loans or maxing out credit cards.<h3 class="heading-node" id="kak8m7yz1" style="text-align: left">9. Friendly Fraud&nbsp;</h3>Legitimate customers falsely dispute valid transactions, resulting in chargebacks and losses for merchants and financial institutions.<h3 class="heading-node" id="m70nsw8le" style="text-align: left">10. Internal Fraud&nbsp;</h3>Fraud committed by employees, including misappropriating funds, unauthorized transactions, manipulating records, or abusing access to confidential information, results in financial and reputational damage to organizations.This diverse and evolving threat landscape demands a unified, technology-driven response.&nbsp;<h2 class="heading-node" id="pecoaqt3a" style="text-align: left">A Vision for Global Financial Security: How M2P’s FRM Leads the Way&nbsp;</h2>M2P’s Fraud Risk Management (FRM) system is a comprehensive, cloud-native framework purpose-built to secure the global financial ecosystem. By seamlessly integrating advanced AI, regulatory intelligence, and user-centric design, M2P’s FRM empowers banks, fintechs, and NBFCs to stay ahead of threats, adapt faster, and protect customers with confidence.Here’s how M2P’s FRM is redefining fraud management in the digital era.<h3 class="heading-node" id="220oaozjd" style="text-align: left">1. Risk Management Expertise&nbsp;</h3>M2P embeds risk management expertise into every layer of its FRM solution. Designed to empower cross-functional teams, it equips stakeholders with intuitive, data-driven tools to proactively identify, assess, and mitigate risk long before escalation. From onboarding to servicing, every interaction is guided by embedded fraud resilience.<h3 class="heading-node" id="ifsxjisfn" style="text-align: left">2. Advanced Fraud Detection and Prevention&nbsp;</h3>M2P’s <a class="link" href="https://m2pfintech.com/blog/all-you-need-to-know-about-building-a-robust-fraud-and-risk-management-frm-system/" target="">FRM</a> combines robust rule engines with machine learning models to deliver real-time fraud detection and adaptive prevention strategies.<ul class="list-node" id="tdzusqjck"><li>Data Analysis and Anomaly Detection: Our platform continuously monitors transaction streams, using statistical models and machine learning to flag deviations from expected patterns, such as sudden large transfers or unusual spending spikes.</li></ul><ul class="list-node" id="w9oq99knz"><li>Behavioral Analytics: By tracking user behaviors like device usage, login locations, and transaction timing, the FRM system quickly identifies account takeovers and credential theft—critical in a world where <a class="link" href="https://coinlaw.io/online-banking-usage-statistics/" target="">3.6 billion</a> people use mobile banking.</li></ul><ul class="list-node" id="uk5nd1bkj"><li>Continuous Monitoring: Provides 24/7 surveillance of transactions and accounts, shrinking the window for fraudsters to act.</li></ul><h3 class="heading-node" id="w8n2jodle" style="text-align: left">3. Regulatory and Legal Compliance&nbsp;</h3>M2P simplifies regulatory complexity with baked-in compliance architecture that supports global and local frameworks like GDPR, PCI DSS, and AML/<a class="link" href="https://m2pfintech.com/kyc-suite/" target="">KYC</a>.<ul class="list-node" id="fwtxrmd4w"><li>eKYC &amp; AML Screening: Real-time identity verification and sanctions list screening to ensure compliance without friction.</li></ul><ul class="list-node" id="dwcqma5ki"><li>Automated Reporting &amp; Audit Trails: Every user action and transaction is logged, making it easier to meet audit requirements and manage incident traceability.</li></ul><h3 class="heading-node" id="irxjwq90n" style="text-align: left">4. Cybersecurity Measures&nbsp;</h3>M2P’s FRM training and tools address cyber threats that lead to fraud, such as phishing, malware, and ransomware. The integrated features ensure compliance and fortify institutions against cyber threats that often serve as gateways to financial fraud.<ul class="list-node" id="4jny8o2rw"><li>Multi-factor Authentication (MFA): Enforces layered security, making unauthorized access significantly harder.</li></ul><ul class="list-node" id="w2lxdvs95"><li>Threat Intelligence Integration: Delivers real-time updates on emerging cyber risks, enabling dynamic response to new attack vectors.</li></ul><h3 class="heading-node" id="os57yguml" style="text-align: left">5. Enhancing Operational Resilience&nbsp;</h3>Powerful fraud prevention isn’t just about detection—it starts with building resilient operations. By enforcing segregation of duties, intelligent access controls, and structured incident response protocols, the FRM system helps financial institutions reduce insider fraud and respond swiftly when threats arise. This resilience is essential for maintaining trust, minimizing disruption, and ensuring operational continuity amid evolving risks.<h3 class="heading-node" id="0gaqn2566" style="text-align: left">6. Custom Fraud Detection System&nbsp;</h3>A one-size-fits-all approach doesn’t work against dynamic fraud. Advanced FRM solutions offer the flexibility to design custom risk models that evolve with changing fraud tactics. By integrating data from multiple sources and leveraging machine learning, these systems continuously refine detection capabilities. This unified approach provides a comprehensive view of risk, enabling institutions to respond quickly to new fraud tactics and maintain a strong, adaptive defense against even the most sophisticated schemes.<h3 class="heading-node" id="720dugepn" style="text-align: left">7. Ethical Considerations&nbsp;</h3>Beyond compliance, our FRM system embeds ethical standards and responsible risk management into organizational culture. By promoting transparency, accountability, and whistleblower mechanisms, it deters insider threats and conflicts of interest. This ethical foundation not only reduces internal fraud risk but also builds stakeholder trust and aligns business practices with global standards of integrity, supporting sustainable growth and reputation.<h2 class="heading-node" id="b7cg2ouvx" style="text-align: left">A Future-Ready Approach to Fraud Risk Management&nbsp;</h2>The financial landscape is shifting, and so are the tactics of fraudsters. It’s not just about reacting to fraud—it’s about anticipating it, preventing it, and building trust in a digital-first world.By blending expertise, technology, and collaboration, FRM systems position institutions to lead the global fight against fraud, ensuring that innovation and inclusion go hand in hand with security.Don’t let fraud outpace your innovation.<a class="link" href="https://m2pfintech.com/contact-us/?activeKey=1" target="">Schedule a personalized demo</a> and discover how you can stay steps ahead of financial crime!&nbsp;<a class="link fui-Link ___1idfs5o f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1hu3pq6 f11qmguv f19f4twv f1tyq0we f1g0x7ka fhxju0i f1qch9an f1cnd47f fqv5qza f1vmzxwi f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh ftqa4ok f2hkw1w fhgqx19 f1olyrje f1p93eir f1h8hb77 f1x7u7e9 f10aw75t fsle3fq f17ae5zn" href="https://m2pfintech.com/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights directly to your inbox.Follow us on&nbsp;<a class="link fui-Link ___1idfs5o f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1hu3pq6 f11qmguv f19f4twv f1tyq0we f1g0x7ka fhxju0i f1qch9an f1cnd47f fqv5qza f1vmzxwi f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh ftqa4ok f2hkw1w fhgqx19 f1olyrje f1p93eir f1h8hb77 f1x7u7e9 f10aw75t fsle3fq f17ae5zn" href="https://www.linkedin.com/company/m2pfintech/mycompany/" target="_blank" rel="noreferrer noopener">LinkedIn</a>&nbsp;and&nbsp;<a class="link fui-Link ___1idfs5o f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1hu3pq6 f11qmguv f19f4twv f1tyq0we f1g0x7ka fhxju0i f1qch9an f1cnd47f fqv5qza f1vmzxwi f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh ftqa4ok f2hkw1w fhgqx19 f1olyrje f1p93eir f1h8hb77 f1x7u7e9 f10aw75t fsle3fq f17ae5zn" href="https://twitter.com/m2pfintech" target="_blank" rel="noreferrer noopener">Twitter</a>&nbsp;for insightful fintech bytes curated for curious minds like you.

The Rising Threat of Financial Fraud: Why Robust Risk Management is Essential?

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/06/FRM-Blog-Banner-2-1-2.webp" alt="M2P Fintech" title="" width="100%" height="383"><ul class="list-node" id="bbuv8bhp5"><li>Over 95,000 UPI fraud cases were reported in 2022-23.</li><li>More than 42% of Indians experienced financial crimes.</li><li>95% of Indian firms experienced new types of cyber frauds.</li></ul>Cyber frauds are surging every day.&nbsp; You may have experienced it, or you would have come across a cyber fraud victim. Living in an era of the highest technological sophistication and still falling prey to cyber frauds sounds like an irony.&nbsp;The global digital payments market is expected to grow at 15.5% and reach $111 billion in 2023 and hit $198 billion by 2027. Payment modes such as UPI, credit/debit cards, digital wallets, and other contactless modes have gained a lot of prominence due to their speed, convenience, and security. Despite phenomenal advances, cyber frauds in the form of phishing, spamming, SIM swapping, account takeover frauds, etc., increase by the minute. Hackers are evolving with technology and adopting sophisticated strategies to infiltrate banking infrastructure and commit cybercrime.&nbsp;This is why organizations need a robust Fraud and Risk Management (FRM) system to defend against data theft, breaches, and other forms of cybercrimes. Before getting into the details, let's first understand what is fraud and risk management.<h2 class="heading-node" id="k1k07wioo">What is Fraud and Risk Management?&nbsp;</h2>Fraud Risk Management is a systematic approach to reduce frauds, especially transaction related. It encompasses identifying, managing, and mitigating breaches in addition to preventing frauds and risks. Businesses that include financial institutions, ecommerce companies, healthcare providers, government agencies, and insurance companies, use FRM systems to combat risks associated with digital transactions.In this blog, we'll discuss how to design an FRM system and best practices to follow while designing. Before diving into it, let us go through the usual cyber frauds because knowing how hackers function can help you create an FRM system capable enough to handle those frauds.Here we go!&nbsp;<h2 class="heading-node" id="nm6kjndnr">Types of Cyber Fraud&nbsp;</h2><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/06/Design-request-for-FRM-blog_2_V2-1.webp" alt="M2P Fintech" title="" width="100%" height="223"><h3 class="heading-node" id="u16fnp09p">Account Takeover (ATO) Frauds &nbsp;</h3>Account takeover fraud occurs when hackers gain unauthorized access to a victim's online account and take control, often without their knowledge or consent.&nbsp;&nbsp;<h3 class="heading-node" id="29imu321k">Phishing&nbsp;</h3>Phishing is an attacking method used in ATO where the hacker sends an email to a user posing as a genuine entity. The user gets tricked by believing the email to be legitimate and discloses their private information.&nbsp;<h3 class="heading-node" id="mdhb5jdk8">Brute-force Attack&nbsp;</h3>Hackers try a combination of username/password on multiple accounts till they crack into a user’s account.&nbsp;<h3 class="heading-node" id="1qp070zis">SIM Swap and Device-related Fraud&nbsp;</h3>SIM swap is a technique used by fraudsters to get control of a user’s phone number. By controlling the phone number, hackers can take advantage of two-factor authentication to access the user's devices, their bank accounts, social media accounts, and more.&nbsp;<h2 class="heading-node" id="m1sj54yqb">Authentication Protocols to the Rescue</h2>Most organizations have some sort of strategy to defend themselves from frauds. Some organizations use a proper FRM system, some follow stringent security protocols such as 3-D Secure Authentication (3DS) and Two-Factor Authentication (2FA) as an additional security layer. But the deployment of these security protocols depends on the marketplace. Many markets (such as the United States) do not use 3DS because they prefer customer convenience over security. This may lead to frauds unless strong controls are in place. On the other hand, in markets such as India where there is a mandate for 2FA, fraudsters still persuade gullible customers to share OTPs. Not taking requisite measures can give fraudsters access to stolen card credentials. They try their luck at different merchants to see if they can go through and bypass risk controls.&nbsp;The best way to battle cyber frauds is to design a risk engine capable of not only identifying existing frauds but also new ones.&nbsp;<h2 class="heading-node" id="drco1veje">How can you Design a Robust FRM to Tackle Fraud?</h2><ul class="list-node" id="08lc91nt7"><li>Accessing requisite data</li><li>Introducing the right balance between frictionless flows and challenges</li><li>Interfacing FRM with external systems</li><li>Embracing advanced risk checks</li><li>Adopting a combination of rules and models</li></ul><h3 class="heading-node" id="akzmswrji">Accessing Requisite Data&nbsp;</h3>In this data-driven world where frauds are mutating in novel ways like the Corona virus, we need requisite data to develop an efficient and holistic FRM system.&nbsp;<h4 class="heading-node" id="ph9lh45q3">Types of data we need for fraud management&nbsp;</h4><h5 class="heading-node" id="7t9bcfucg">Transaction data&nbsp;</h5>All financial data related to digital transactions, including credit card transactions, bank transfers, wire transfers, etc. This data must include the transaction amount, date, time, location, and other details. This data is used to build a historical profile of the customer.&nbsp;<h5 class="heading-node" id="8p7zx77jg">User data&nbsp;</h5>User information such as name, address, phone number, email address, employment, income, credit history, etc.&nbsp;<h5 class="heading-node" id="sohlvxzkd">Device data&nbsp;</h5>Device type, operating system, browser type, and other technical details.&nbsp;<h5 class="heading-node" id="1749otx7p">Geolocation data&nbsp;</h5>Location of the transaction - IP address, GPS coordinates, and other data that can be used to determine the user's location.&nbsp;<h5 class="heading-node" id="0s8b81av5">Behavioral data&nbsp;&nbsp;</h5>Browsing history, search history, and other online activities that may be relevant to the transaction.&nbsp;<h5 class="heading-node" id="vbouas7eo">External data</h5>Information from external sources, such as credit bureaus, public records, and other third-party sources that can provide additional insights into the user's risk profile.&nbsp; Now that you have all the requisite data for building an FRM system, what next?&nbsp;<h4 class="heading-node" id="zt4bvsebg">Customer profiling&nbsp;</h4>Customer profiling is a process in which a business or organization collects and analyzes information about their customers and analyzes their behavior, preferences, and potential risks.Comprehensive customer profiling enables business &amp; risk teams to design the most appropriate models &amp; rules to mitigate fraudulent transactions.&nbsp;&nbsp;<h3 class="heading-node" id="k0o72ows2">Introducing the Right Balance between Frictionless Flows and Challenges&nbsp;</h3><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/06/Design-request-for-FRM-blog_3_V3_2000X1000.webp" alt="M2P Fintech" title="" width="100%" height="383">A natural question arises when developing an FRM system,Why not increase the number of authentication steps to increase security and prevent cybercrime?Yes, the authentication journey can be made more complex but will definitely impact the user experience.What will the user feel if they are subjected to strenuous procedures just to make a normal digital transaction?On the other hand, if the number of authentication steps are fewer/none, the probability of a hacker breaking into the system tends to go high. That is why, while designing a risk engine, it is important to strike a balance between frictionless user experience and introducing a challenge. Having a configurable, customizable challenge experience is critical to identifying different fraud strategies.&nbsp;&nbsp;<h3 class="heading-node" id="rbhucvi5z">Interfacing FRM with External Systems</h3>To enhance the security capabilities with the ever-evolving frauds, you need to interface the FRM engine with external systems such as whitelists, hotlists, spam lists, disposable lists, etc. By regularly pulling data from these systems, you can keep the FRM updated in real time.Let’s take a scenario.A user lost his credit card. He immediately alerts the card issuer to block the card. The issuer hotlists the lost credit card, meaning the card is permanently blocked. Now, when a hacker tries to make a transaction using the lost card credentials, an FRM system can classify it as fraudulent if it is interfaced with hotlists.&nbsp;Integrating hotlist information into the Fraud Risk Management (FRM) system can significantly enhance an organization's ability to identify and manage potential risks. These risks may include money laundering, fraud, terrorist financing, etc. By leveraging this integration, organizations can proactively mitigate these risks and ensure compliance with relevant regulations.&nbsp;<h3 class="heading-node" id="dwd2niduz">Embracing Advanced Risk Checks</h3>Behavioral biometrics distinguishes genuine users from criminals by analyzing users’ physical and cognitive digital behavior. By assessing user behaviors such as mouse movements, typing cadence, swipe patterns, device orientation, etc., and comparing it with the historical user profile, the behavior can be classified as either good or bad.For example, genuine users practice different paces and navigation patterns, whereas cybercriminals rely on copy, paste, and automated programs. Genuine users use the autofill feature to fill in personal details, whereas criminals enter the data manually.&nbsp;<h3 class="heading-node" id="t9lliq7kr">Adopting Rules and Models</h3>When building an FRM system, many organizations solely rely on Machine Learning (ML) models for fraud detection. ML models help the FRM system scale, adapt, and visualize emerging threats and frauds.Does that mean you should stop following a rule-based approach?After all, why should anyone still follow the rules when there are efficient ML models that can learn by themselves?Though the ML-based approach facilitates real-time processing and can automatically detect anomalies and unique frauds, it takes time to set up and train the models. Moreover, an ML-based approach can get tricky and complicated, whereas rules are good for certain edge cases where a rule must be deployed quickly to arrest a threat.That is why it is important to design a risk engine that combines rules and models.After building a risk engine based on the above steps, it is important to test the engine periodically in real-time and get feedback on its performance. That is the job of a fraud/risk analyst. Then, they improve the system by fine-tuning the rules and models.&nbsp;<h2 class="heading-node" id="ju5uswrou">M2P Fraud and Risk Monitoring System</h2>M2P’s Fraud Risk Monitoring system leverages all the best practices in designing a risk engine. It evaluates the risk associated with various use cases (transaction, onboarding, login, and other non-payment scenarios) across all channels, including cards (authentication &amp; authorization), BNPL, core banking, payment gateway, UPI, etc.&nbsp;Our FRM system combines many sources of data and performs customer profiling by interfacing with external system. We deploy advanced risk checks such as behavioral biometrics to classify genuine users and follow a holistic approach that combines rules and models.&nbsp;<h3 class="heading-node" id="0yp3vmls5">Why M2P FRM?&nbsp;</h3><h4 class="heading-node" id="nlv820xtf">Effective Rule and Data Management&nbsp;</h4>Our FRM lets the user upload historical data, review rule performance, and deploy it after fine tuning the rules. Depending on the implementation of risk rules, the users can run the system in a listening mode (without uploading any historical data). In this case, the source system receives the risk score but does not make business decisions. Users can turn off the listening mode once the risk rules have been finalized.&nbsp;If users do not have any pre-defined rule set, our system provides a standard rule set covering all mandatory and a few optional/ conditional parameters.&nbsp;<h4 class="heading-node" id="eyi1c6dvd">Customizable Case Management Modules&nbsp;</h4>The case management section allows the issuer to flag a certain type of transaction as a case (based on a case definition) and conduct further analysis to determine if the transaction was genuine/fraudulent. The case management flow can be customized as per business &amp; risk preference.&nbsp;Our Case Management module can help you:&nbsp;<ul class="list-node" id="tmaa6nywo"><li>Set case definition (automatic rule) to flag certain transactions as cases&nbsp;</li><li>Prioritize cases as high/medium/low&nbsp;</li><li>Assign cases to be investigated by analyst&nbsp;</li><li>Automate case investigation via IVR/SMS/WhatsApp&nbsp;</li><li>Assign and reassign cases based on category, ageing, priority, etc.&nbsp;</li></ul><h4 class="heading-node" id="kt5dbo5zy">Comprehensive Reports and Dashboard section&nbsp;</h4>From fetching detailed transaction report, rule performance report to case management report till managing overall FRM system performance, filtering the dashboard by score, transaction outcome, genuine vs. fraudulent transactions, etc., our FRM gives a comprehensive reports and dashboard section to the users.&nbsp;<h4 class="heading-node" id="dxbq3wuqi">Seamless Feedback &nbsp;</h4>Our FRM eases the life of the fraud analysts. Whenever the analysts come with feedback, it is easy for them to incorporate into our risk engine.&nbsp;At M2P, we have had the privilege of collaborating with a diverse range of clients, and built lasting relationships with banks, NBFCs, and neobanks. Our team consists of seasoned professionals who possess a deep understanding of market trends and industry standards. With this knowledge, we craft innovative solutions that effectively combat cyber fraud and provide our clients with the protection they need.Do you want to protect your customers from cyber frauds?&nbsp;Reach out to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>!&nbsp;This blog was co-written by <a class="link" href="https://www.linkedin.com/in/madhusudhanramakrishnan/">Madhusudhan Ramakrishnan</a>, Associate Vice President – Product Management, M2P.&nbsp;<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a> to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.&nbsp;Follow us on <a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a> and <a class="link" href="https://twitter.com/m2pfintech">Twitter</a> for insightful fintech tales curated for curious minds like you.&nbsp;

Building a Robust Fraud and Risk Management (FRM) System

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/06/2000X1000.webp" alt="M2P Fintech" title="" width="100%" height="358">Identity theft among pensioners is a rising pandemic that needs to be eradicated. Impersonating senior citizens by stealing or faking their life certificates with a motive to swindle their income is nefarious. The crime not only pushes pensioners into poverty but also piles lawsuits and losses onto pension disbursing authorities.&nbsp;<h2 class="heading-node" id="lkzhcveaf" style="text-align: justify">Pensioner Plight&nbsp;</h2>In India, there are over one crore pensioners, including those from the central government and defense forces. To receive pension, a retiree must submit their life certificates annually to the Pension Disbursing Authority (PDA). Banks, post offices, and other financial institutions serve as PDAs, that disburse pensions after authenticating the life certificates of pensioners.&nbsp; The mere process of physically receiving a life certificate and delivering it to the PDA is a significant effort for elderly pensioners, as the process is slow and tedious. You can only imagine the plight of pensioners who are sick, bedridden, or even living abroad. Accessing and moving the physical life certificate for pensioner verification is a grueling task for seniors.&nbsp;<h2 class="heading-node" id="rm4quf8we" style="text-align: justify">Launch of Jeevan Pramaan&nbsp;</h2>To make life certificate issuance convenient, the Indian government launched a digital service called Jeevan Pramaan in 2014. However, the service mandates senior citizens to have digital literacy. They also had to follow rigid steps and download multiple software. Seniors who are not tech-savvy face significant pressure in the process.&nbsp; This got us thinking about how we can help. We wanted to address the issues associated with the verification and distribution of digital life certificates.&nbsp;<h2 class="heading-node" id="gloui3z7e" style="text-align: justify">Our Solution: Digital Life Certificates&nbsp;</h2>We introduced the Digital Life Certificate (DLC) solution to streamline pensioner verification by making the process, quick, convenient, and seamless. Our DLC platform provides a flexible and convenient solution that can be accessed from the comfort of the pensioner's own home.&nbsp; And the best thing was our process saved significant time and effort for both the pensioner and the disbursing organization. We also customize the solution to suit specific requirements.&nbsp;<h2 class="heading-node" id="1srmxvygg" style="text-align: justify">Key Highlights of the DLC Solution&nbsp;</h2><ol class="list-node" id="09ttsi9if"><li>Multi-browser compatible web platform for generating DLC&nbsp;</li><li>Custom rule-based business engine&nbsp;</li><li>Active/Passive liveness detection&nbsp;</li><li>AI/ML-based Optical Character Recognition (OCR) techniques&nbsp;</li><li>Aadhaar OTP-based e-KYC or Digilocker&nbsp;</li><li>Integration with SMS gateway and email to push notifications to pensioners&nbsp;</li></ol><h2 class="heading-node" id="whd3zkfr1" style="text-align: justify">Pensioner Identity Verification Process Flow&nbsp;</h2>The pensioner’s identity verification process can take place in three ways&nbsp; A. Agent-assisted – The pensioner gets on a call with an agent to get the Digital Life Certificate. Both the call recording and the live picture will be saved.&nbsp; B. Self-assisted – The pensioner records himself during the process. He/she will answer the questions displayed on the screen and captures a live photo.&nbsp;&nbsp; C. Selfie-based – The selfie-based flow is customizable, where the customer can record himself by capturing an Officially Valid Document (OVD) or answering security questions displayed on the screen, and the selfie is captured.&nbsp;&nbsp; Irrespective of the process flows, the recordings will be sent to the auditor for review to verify the pensioner.&nbsp; Among these, the self-assisted process flow is more commonly used.&nbsp;<h2 class="heading-node" id="oj4ndy737" style="text-align: justify">How can Pensioners Secure Digital Life Certificates in a Self-assisted Process Flow?&nbsp;</h2>Our web-based DLC solution provides a hassle-free and convenient way for pensioners to obtain their digital life certificates in three simple steps.&nbsp; Step 1: The pensioner accesses the DLC platform via the link provided, input their data, and completes OTP-based mobile verification.&nbsp; Step 2: The pensioner then proceeds to complete Digi Locker-based Aadhaar verification using their Aadhaar number.&nbsp; Step 3: Liveness check is done using Active Liveness Detection, which involves performing gestures or reading out an OTP/statement suggested by the application.&nbsp; Step 4: The pensioner is directed to the DLC process summary. The DLC will be available in a pdf form, and upon receiving the DLC, a confirmatory message is sent to the pensioner’s mobile/email.&nbsp;<h2 class="heading-node" id="7n4jb2vwr" style="text-align: justify">Live Use Cases - Digital Life Certificates&nbsp;</h2>Odisha is the first state in India to provide a Digital Life Certificate (DLC) facility through Video KYC. We collaborated with the Odisha government and National Insurance Company Limited (NIC) in West Bengal to deliver digital life certificates to their beneficiaries/pensioners.&nbsp;&nbsp; Telangana, Uttar Pradesh, Tamil Nadu, and Andhra Pradesh are a few other states in India that have implemented our OTP-based digital-KYC solutions.&nbsp;&nbsp; So far, we have issued digital life certificates to over 5 lakh pensioners across the country through our web-based platform.&nbsp;&nbsp; Thanks to the in-hand availability of cutting-edge technologies and the three well-organized robust process flows, our platform is readily accessible to pensioners.&nbsp; Do you want to streamline pension verification?&nbsp; Write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>.&nbsp;<a class="link fui-Link ___1qmgydl f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1hu3pq6 f11qmguv f19f4twv f1tyq0we f1g0x7ka fhxju0i f1qch9an f1cnd47f fqv5qza f1vmzxwi f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh ftqa4ok f2hkw1w fhgqx19 f1olyrje f1p93eir f1h8hb77 f1x7u7e9 f10aw75t fsle3fq" href="https://m2pfintech.com/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. 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Streamlining Pension Verification: A Step-by-Step Guide to Digital Life Certificates

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/05/FRS-Banner.webp" alt="Facial Recognition System - M2P" title="" width="100%" height="531">Facial recognition technology today goes beyond just unlocking your smartphone. 7 out of 10 governments worldwide use the technology on a large scale for surveillance, security, and pandemic control. &nbsp;Businesses are deploying facial recognition technology for <a class="link" href="https://m2pfintech.com/blog/transform-digital-onboarding-with-vkyc/">VKYC</a>, payment authorization, access control, and customer experience, to name a few. Use cases range across industries like financial services, educational institutions, transport services, legal enforcement, and private businesses, among several others. Valued at $6.28 billion, the facial recognition market is expected to grow at 16% CAGR to reach $11.35 billion by 2027. With increased security and convenience as the two potential benefits, this <a class="link" href="https://m2pfintech.com/kyc-suite/">digital identification technology</a> has been increasingly deployed over the past decade.Before heading further into the world of facial recognition, let’s take a quick glimpse into how identity verification happens conventionally.<h2 class="heading-node" id="fxvravy6t" style="text-align: justify">Traditional Identity Verification</h2><ul class="list-node" id="6khqeq0yj"><li>People had to only rely on physical identification documents such as IDs, passports, and driving licenses to verify their identity.</li><li>Legal entities had to depend on eyewitnesses or labor-intensive manual identification techniques to identify suspects.</li><li>Security at airports, government buildings, and other high-security facilities was mostly based on manual checks. Even today, metal detectors and X-ray scanners are used for verification.</li></ul><h2 class="heading-node" id="mcouj92e1" style="text-align: justify">Shift to Modern Facial Recognition Technology</h2>The ability of <a class="link" href="https://m2pfintech.com/blog/5-reasons-why-banks-need-behavioral-biometrics/">behavioral biometrics</a> and modern facial recognition technology to authenticate IDs has been revolutionary. Irrespective of whether you use it in transportation, aviation, commerce, or as a security solution, the technology delivers key advantages in speed, accuracy, and convenience. Further, facial recognition works well in integration with a wide range of other technologies, especially security software. It is easy to incorporate into existing security systems at a low cost, enabling a win-win situation for organizations that seek a frictionless solution. A few notable implementations are listed below.<ul class="list-node" id="agfv0czy0"><li>Law enforcement agencies can use facial recognition technology to quickly identify suspects by matching their faces with the existing database.</li><li>Some countries like China have started using facial recognition technology for border control, to verify the identity of travelers entering and leaving the country.</li><li>In the airline industry, facial recognition is already employed to offer speedy, accurate identification verification at every stage of the passenger journey, including check-in, luggage drop, security screening, retail transactions, and boarding lineups.</li></ul><h2 class="heading-node" id="kcgq6zfnu" style="text-align: justify">M2P Facial Recognition System (FRS)</h2>Facial recognition/detection, <a class="link" href="https://m2pfintech.com/blog/unmask-the-power-of-face-liveness-detection-integrating-google-ml-kit-into-your-flutter-app/">liveness check</a>, and matching are components of our facial technology. To streamline citizen authentication across several services, we've developed a cloud-based FRS solution that can be integrated with current government databases and applications. Using state-of-the-art AI algorithms for biometric identification, we comply with international standards for privacy and protection, to make it easy for citizens to access government services in a secure and expedited manner. We work with the private firms and governments in Andhra Pradesh, Telangana, and Orissa on the following projects.<ul class="list-node" id="tfypywqbe"><li>Group face attendance solution for marking attendance in schools (for 14 lakh students)</li><li>Online counseling for degree colleges for intermediate pass-out students in Telangana</li><li>Pension services through our <a class="link" href="https://m2pfintech.com/blog/transform-digital-onboarding-with-vkyc/">video KYC</a> solution in Orissa</li><li>Driving license and vehicle registration without a personal visit to the Telangana RTA department</li><li>Face-based attendance application to ambulance drivers to mark their shift-wise attendance for private firms.</li></ul><h3 class="heading-node" id="hxw5gf5nw" style="text-align: justify">Key Benefits</h3><ul class="list-node" id="z1lxv8y56"><li>Contactless: Our <a class="link" href="https://m2pfintech.com/blog/how-is-ai-changing-the-financial-industry-top-6-use-cases-in-fintech-and-banking/">AI</a> &amp; ML-enabled advanced facial attendance system is based on contactless technology, which means it can be used to identify individuals without requiring physical contact. It can even mark attendance within a safe distance of 6 feet. Being contactless by nature, it ensures system functionality at crucial times.</li><li>Flexibility: Facial attendance solution offers a greater amount of flexibility since it can be operated at edge level without any internet connectivity. It can capture single attendance and group attendance based on custom requirements.</li><li>Instantaneous: Facial recognition is instant and can provide results in real-time, meaning that the system can identify a person as soon as their face is captured by a camera.</li><li>Fool-Proof: Our FRS solution has the potential to complete the verifications with the best of accuracy and reliability making it the fool-proof solution for identity verification.</li><li>Saves cost and effort: FRS is a potential cost-saving solution that reduces the need for human personnel to manually identify individuals which in turn prevents errors and biases in identification.</li></ul><h3 class="heading-node" id="y6a4ohx41" style="text-align: justify">Use Cases of Facial Recognition</h3>We rolled out our advanced Facial recognition solution involving Facial technology, Geo-fencing, and De-duplication modules to different government and financial institutions across the Telangana state. Below are the use cases where FRS plays a major role. Subsidy Management System: FRS integrations enable seamless monitoring of subsidies for government entities where all the beneficiaries need to be authenticated to prevent misuse. The distribution of subsidies can be managed centrally, making it easier to track and monitor the use of funds. FRS can capture and store data on beneficiaries, including their personal information, income, and eligibility for the subsidy. By doing so, it ensures that only those who meet the criteria receive the subsidy, and that there is no duplication of benefits. The facial system can identify any irregularities in the distribution of funds, such as multiple claims by the same beneficiary or claims by ineligible beneficiaries. Citizen Identification: FRS aids in the rapid identification of citizens, decreasing the time and resources required for manual identification processes. This customer identity check is highly accurate, reducing the risk of errors in identifying individuals. FRS can improve security by adding an extra layer of identification and verification. Customer Onboarding: FRS can be used for customer onboarding across industries like banking, insurance, and several others. It can streamline the <a class="link" href="https://m2pfintech.com/blog/crack-the-kyc-jigsaw-ease-onboarding-compliance/">KYC </a>and onboarding process by verifying the identity of customers remotely, which saves time and reduces costs. The application helps mitigate any risks associated with using FRS for customer onboarding. Attendance Marking: Using FRS technology, attendance marking can be done in a matter of minutes for a group of 50 students, as opposed to traditional methods of manual marking which can take much longer. This is because FRS technology can identify and mark attendance for multiple individuals simultaneously, without the need for physical contact or manual input. It helps to detect up to 8 faces in a single frame, it takes only 2 to 3 seconds per attendee. Let's discuss the attendance marking use case in detail.<h3 class="heading-node" id="w387kl1am" style="text-align: justify">How Does Facial Recognition Technology Enable Attendance Marking?</h3>Step 1: Onboarding process and integration&nbsp; First, the FRS application must be onboarded and integrated with the existing system.<ul class="list-node" id="lhqnxh1si"><li>Attendee/attendees are registered in the portal or the mobile app</li><li>Data is integrated to the system using department level <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">APIs</a></li><li>Attendee details can be customized based on entity requirement</li></ul>Step 2: Registration process The next step is registration where participants can choose to sign up with or without an Aadhar number based on the availability. With Aadhaar<ul class="list-node" id="9k21lkoqb"><li>Register attendee with Aadhaar in FRS system</li><li>Perform Aadhaar-based e-KYC</li><li>Aadhaar details of the attendee are fetched</li><li>Perform liveness check by capturing live photo</li><li>Face match between photo from Aadhaar and live photo</li><li>Enrolment completed</li></ul>Without Aadhaar<ul class="list-node" id="0xiwzzeyh"><li>Register attendee in AI FRS system</li><li>Details of individual are fetched</li><li>Capture live photo of attendee</li><li>Perform liveness check</li><li>Enrolment completed</li></ul>Step 3: Attendance Marking Once the registration is complete, attendance of a single person or a group can be captured.<ul class="list-node" id="vl0je38d2"><li>Open application and capture selfie/photo</li><li>Attendance recorded to edge level</li><li>Attendance marking is done in 2 ways</li><li>1:N - To capture the attendance of 1 person in less than a second</li><li>N:N - To capture the attendance of up to a 50-member group in less than 2 minutes</li></ul>Step 4: Reports and Live Dashboards Monitoring With the integrated dashboard, you can easily monitor all the reports generated by this solution. Soon after the completion of the capture and authentication processes, the reports are instantly generated. With the help of this software, it is possible to continuously monitor and keep an eye on the live monitoring dashboard of the FRS system.<h3 class="heading-node" id="t62u8gnhl" style="text-align: justify">Proven Impact of FRS in Attendance Marking</h3><ul class="list-node" id="h78758cmv"><li>Lead time taken to enroll an attendee is less than 5 seconds.</li><li>Liveness check accuracy is 100%</li><li>Face matching accuracy is 100%</li><li>False acceptance ratio is less than 0.1%</li><li>False rejection ratio is less than 0.1%</li></ul>Apart from the results listed above, our facial recognition system provides the benefits below.<ul class="list-node" id="j47pegcmu"><li>Marks attendance offline</li><li>Syncs data automatically when connectivity is restored (after network outage)</li><li>Contactless capture within 5 feet distance</li><li>Live monitoring with MIS reports</li><li>Geo location binding</li></ul>Our facial recognition system is a versatile solution that can be easily and quickly integrated into any system without any hassle.<h2 class="heading-node" id="f1n8tolnx" style="text-align: justify">Future of Facial Recognition</h2>Face recognition technology is the future of identity verification. It holds a wide scope for potential innovation in security, marketing, healthcare, retail, and entertainment. We can expect to see a significant improvement in the accuracy of face recognition systems for more reliable identification in complex and challenging situations. Want to know more about facial recognition solutions? Write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>. Make your identity verification and authentication a breeze!

How has Facial Recognition revolutionized Identity Verification and Authentication?

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/03/Behavioral-Biometrics01.webp" alt="M2P Fintech" title="" width="100%" height="253">Over 9,103 bank fraud cases worth 604 billion rupees were reported across India in 2022.  Now, this is not a good sign for the banking industry.&nbsp;Let alone the digital banking sector.With digital transformation on the rise, the cyber threat landscape has evolved too. Fraudsters are adapting sophisticated tactics and technologies to steal identity, data, and money for their corrupt motives. The security attacks have deep risk implications that result in financial loss, regulatory scrutiny, and depletion of customer trust and goodwill.&nbsp;These repercussions have created a dire demand for stringent security in digital banking. A one that does not hamper customer experience. Banks need technology innovation that can go beyond PINs and passwords to deter security attacks without compromising customer experience, trust, or regulatory compliance.&nbsp;Behavioral biometrics serve as a great solution to deter the security risks at stake.&nbsp;Advanced technology in behavioral biometrics can mitigate the security concerns of digital banks without impeding speed, personalization, convenience, or experience. It is a great way to build stakeholder loyalty and trust.&nbsp;<h2 class="heading-node" id="peql4e1rh" style="text-align: left">What is behavioral biometrics? &nbsp;</h2>Behavioral biometrics is a cutting-edge technology that continuously analyzes user identity along with their phygital (physical + digital) and cognitive behavior. It averts security risks such as credential theft, compromised passwords/accounts, user substitution, phishing attacks, license mismanagement, and identity breaches of any kind. The biometric authentication runs without making a noise in the background and does not impede the customer experience on any level.&nbsp;&nbsp;By monitoring and analyzing user movements like swiping, keying, scrolling, or even moving the devices, behavioral biometrics helps differentiate legitimate from fraudulent activities and can easily identify cybercriminals and fraudsters.&nbsp;It creates in-depth profiles of user behavior and uses them as a benchmark for identifying and preventing suspicious transactions. If the system notices any unusual conduct, alerts are triggered in the background to carry out extra research to preserve the integrity of the account and the authorized user. &nbsp;Banks today are exploring biometrics as a possible replacement for PIN and password systems for a more user-friendly banking experience. Behavioral biometrics can usher in a new era in digital authentication when implemented with machine learning and risk assessment techniques. When deployed in conjunction with biometric cards, it can combat even the most sophisticated digital banking fraud attacks. <h2 class="heading-node" id="cotu4k4rk" style="text-align: left">Types of behavioral biometrics &nbsp;</h2>The way a user walks, talks, types on a keyboard, or moves the mouse is factored in behavioral biometrics to validate identity and discover breaches. Kinesthetics, voice inputs and patterns, and devise-based gestures are primary types of behavioral biometrics.&nbsp;<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/03/Behavioral-Biometrics03.webp" alt="M2P Fintech" title="" width="100%" height="253">Kinesthetics (Posture &amp; Gait) &nbsp;The way a person's body moves and how their weight is distributed are kinesthetic behaviors of the user. Behavioral biometrics records and analyzes user gait, the way and the manner in which they handle devices, and body movements such as stride length, upper body posture, and movement pace to identify fraudulent activity. &nbsp;Voice Inputs &amp; Patterns &nbsp;The human voice is unique. By capturing narrow-band characteristics such as pitch and format, the perpetrator's identity and motive are very easily verified. The voice inputs and patterns of the user are analyzed, and the distinct, recurring sound variations that occur when they speak are captured and evaluated in behavioral biometrics.&nbsp;Device-Based Gestures (Keystroke Dynamics &amp; Cursor Movements) &nbsp;People interact with devices in specific ways. Typing patterns, keystroke speed and duration, key sequences, and mouse movement patterns have a significant correlation with behavioral intent. Cursor movement analysis in speed, direction changes, clicks, and interactions serves as a basis for user behavior profiles.  &nbsp;The gestures discussed above are analyzed in detail continuously to create behavioral profiles as input to risk engines/fraud monitoring systems. Banks and financial institutions can adopt this advanced technology to provide an extra layer of security for customer identity verification and fraud control.&nbsp;<h2 class="heading-node" id="z3wze9vma" style="text-align: left">How does behavioral biometrics prevent fraud? </h2>The process of preventing fraud and scams with behavioral data happens as follows.<ul class="list-node" id="ayi9ecx61"><li>Collection: The Access Control Server (ACS) monitors and records user actions and behaviors, such as typing rhythm, mouse movements, device usage patterns, and other kinesthetics.  &nbsp;</li><li>Analysis: A unique user profile is created after a thorough analysis of the collected data based on their behavioral patterns.  &nbsp;</li></ul><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/03/Behavioral-Biometrics04.webp" alt="M2P Fintech" title="" width="100%" height="253"><ul class="list-node" id="1frsnzw24"><li>Authentication: When a user attempts to access a protected resource, the system compares the current behavior of the user to their previously established profile. If the behavior matches, the user is authenticated and granted access. &nbsp;</li><li>Monitoring: Continued monitoring and updating of the user behavioral profile is done to ensure accuracy.  &nbsp;</li></ul>This way, behavioral biometrics significantly improves security and user experience in digital banking. &nbsp;<h2 class="heading-node" id="o9mj9ojo6" style="text-align: left">Five reasons why banks need behavioral biometrics &nbsp;</h2><ol class="list-node" id="eq24hgkm0"><li>Stronger security: Behavioral biometrics uses unique behavioral patterns and actions to verify the identity of an individual, providing a stronger form of authentication when compared to traditional methods such as passwords and security tokens. </li><li>User convenience: Unlike traditional biometrics, such as fingerprints and facial recognition, behavioral biometrics do not require any physical input from the user. Instead, it uses actions and behaviors that are performed naturally, such as typing rhythm and mouse movements. This makes it a convenient and user-friendly method of authentication.  &nbsp;</li><li>Continuous authentication: Behavioral biometrics continuously monitor the actions and behaviors of the user, ensuring that the user's identity is continuously verified even after initial authentication. This helps prevent fraud by detecting any changes in behavior that may indicate that a fraudster has taken over the account. &nbsp;</li><li>More difficult to mimic: Unlike other forms of biometrics, it is difficult for a fraudster to mimic the unique behavioral patterns of an individual. This makes it a more secure form of authentication, reducing the risk of fraud. &nbsp;</li><li>Improved fraud detection: By continuously monitoring user behavior, behavioral biometrics can help financial institutions identify potential fraud and investigate suspicious activity, giving them another layer of security to their customer’s accounts. &nbsp;</li></ol>The technology behind behavioral biometrics is evolving, and there is no doubt that a lot of work in this space is already underway. The early indications are quite clear that it will be a key component of banks’ arsenal against the continuously evolving world of fraud.&nbsp;It’s high time banks take behavioral biometrics seriously to authenticate and protect end-users from hacking and fraud.&nbsp; Want to know more about Behavioral Biometrics?&nbsp;&nbsp;&nbsp;Write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>.&nbsp;<a class="link" href="https://m2pfintech.com/newsletter/" target="_blank" rel="noopener">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/" target="_blank" rel="noopener">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech" target="_blank" rel="noopener">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

5 Reasons why Banks need Behavioral Biometrics

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/01/AUA-2.webp" alt="M2P Fintech" title="" id="qrx9wqz1i" width="100%" height="60">Identity fraud is on the rise globally. To avert the dangers of this risk, businesses across industries need to be vigilant and conduct thorough identity verification, with no scope for errors or misrepresentation. If the identities of people involved viz., employees, customers, vendors, and other stakeholders, are not verified properly, businesses could suffer from security breaches, financial losses, regulatory penalties, and reputational damage. In India, Aadhaar serves as a trusted tool to weed out duplicate and fake identities.&nbsp; The Aadhaar card is a unique and potent document that enables cost-effective, smooth, and secure onboarding. But accessing and verifying the validity of Aadhaar cards from the UIDAI (Unique Identification Authority of India) server is not an easy task. Their security policies and other stringent protocols limit access to the UIDAI database. This is where AUA/KUA comes in as a robust and foolproof solution for accessing the Aadhaar database effortlessly and verifying identities swiftly. So, what is AUA and KUA?&nbsp; Let us break it down for you.<h1 class="heading-node" id="xckr8aasp" style="text-align: justify">What is AUA?</h1>Acronym for Authentication User Agency, AUA is a license given to a regulated entity authorized by UIDAI. The license enables businesses to use OTP and biometric-based Aadhaar authentication to verify the identities of the customer, employee, or any stakeholder. The verification response is not too elaborate. Only a ‘Yes’ or ‘No’ response is documented. The AUA license is versatile enough to benefit government institutions that disburse benefits and financial institutes that onboard customers or employees. It is important to note that AUAs are liable for the authentication process and the security and integrity of Aadhaar data.<h2 class="heading-node" id="5fvsbrq9w" style="text-align: justify">How AUA helps verify identity?</h2>When an authentication request is raised, AUA passes the request to the Authentication Server Agency (ASA) who then passes the request to the CIDR database of UIDAI. The OTP/biometric data provided by AUA is matched here on a real-time basis. The response (Yes / No) is pushed back to AUA from UIDAI via the ASA. To verify an identity, AUAs liaise with multiple Authentication Services Agencies (ASAs), which are entities that maintain secure leased line access with the UIDAI database.<h3 class="heading-node" id="bvp0bkfrz" style="text-align: justify">AUA and Sub AUA</h3>Sometimes the AUA sends authentication requests from other entities named "Sub AUAs," which is responsible for offering authentication services to customers on behalf of the AUA. The UIDAI directly authorizes the AUAs to use the Aadhaar system, while an AUA authorizes sub-AUAs to perform the authentication using the AUA route by sub-licensing it to Sub-AUA. The Sub-AUA will not have to maintain the entire infrastructure and compliance as per UIDAI compliance. AUA will handle those. Following the Aadhaar authentication, KYC authentication of customers is performed using KUA.<h2 class="heading-node" id="srsgv4yra" style="text-align: justify">What is KUA?</h2>Acronym for KYC User Agency, the KUA fetches the KYC details from the UIDAI server. The KYC checks are carried out in the UIDAI server by collecting Aadhaar Number and OTP / Biometrics (Fingerprint / Iris / Face). The response will contain data of customers viz., name, gender, date of birth, address, and photograph. The KYC request is sent from KUA through (KYC Services Agency) KSA to UIDAI. Businesses across industries must acquire an AUA/KUA license to upgrade their onboarding capabilities. The license ensures an additional layer of protection against fraud. Today, NBFCs are also eligible to apply for AUA/KUA licenses alongside RBI, SEBI, IRDA, and government-regulated businesses.<h2 class="heading-node" id="dk7jf1vai" style="text-align: justify">Why do businesses need AUA/KUA?</h2>AUA/KUA license assures speed, accuracy, and security of identity verification and KYC checks.&nbsp;Here are a few more reasons why your business requires AUA/KUA license.<ul class="list-node" id="gaoxflike"><li>Cuts costs associated with the manual, in-person document verification</li><li>Enables streamlined verification procedures</li><li>Ensures onboarding experience is smooth and seamless</li><li>Protects data using cutting-edge security</li><li>Reduces the danger of identity fraud and other security breaches</li><li>Boosts customer/employee trust, as identity verification and data are safe</li><li>Simplifies and eases user journey as the verification happens in an instant</li></ul><h2 class="heading-node" id="m27a66omw" style="text-align: justify">Challenges in acquiring AUA/KUA license</h2>As we already discussed above, acquiring the AUA/KUA license is not a walk in the park. It is fraught with a lot of challenges that make it a tedious process. Let’s delve into two important challenges here. Regulatory compliance: All businesses must adhere to stringent standards and regulations established by UIDAI to procure the AUA/KUA license. If compliance is compromised, businesses will have to deal with exorbitant fines, legal action, and reputational damage. Infrastructure and cost: Setting up and maintaining the necessary infrastructure and staff to get the AUA/KUA license can be expensive, labor-intensive, and time-consuming. To overcome the challenges in acquiring an AUA/KUA license, you need a <a class="link" href="https://syntizen.com/zen-aua">reliable RegTech partner</a> who can do the heavy lifting, while you focus on your core business. Here are some of the use cases of AUA/KUA.<h2 class="heading-node" id="wciutrwxx" style="text-align: justify">Use cases for AUA/KUA</h2><h3 class="heading-node" id="mgh56n2dr" style="text-align: justify">Streamline Customer Onboarding - BFSI</h3>AUA/KUA helps BFSI players with secure and reliable customer onboarding and KYC process using biometric authentication. The service enables quick execution of KYC processes, reduces the risk of data breach and unauthorized access to sensitive data.<h3 class="heading-node" id="zoldaec1c" style="text-align: justify">Pension Disbursal - Governments</h3>Governmental departments and agencies rely on AUA/KUA services for secure and seamless Aadhaar validation to verify identity and pension eligibility. The process of delivering financial support to senior citizens and disabled beneficiaries is made efficient, secure, and reliable.<h3 class="heading-node" id="nppzy95p3" style="text-align: justify">Online Services - Transport Department</h3>By using AUA/KUA services, government departments like the Transport Department of Telangana have been able to verify the identity of citizens efficiently and deliver online services seamlessly.&nbsp; The need to physically visit the Regional Transport Authority (RTA) offices for services was drastically reduced, making the process highly convenient and efficient for citizens.<h3 class="heading-node" id="esq88bs9h" style="text-align: justify">Contract Employee Authentication - Municipal Corporation</h3>AUA/KUA helps municipal corporations in tracking the attendance of sanitary workers accurately. Using biometric scanners, municipal corporations verify Aadhaar, at least three times in a day to prevent fraud and eliminate ghost workers. Biometric verification ensures the authenticity of workers and the accuracy of records. Municipal corporations deploy AUA/KUA services to maintain trustworthy records.<h3 class="heading-node" id="2z6yrlltv" style="text-align: justify">Employee Identification - Hospitals</h3>Hospitals leverage AUA/KUA services for hassle-free biometric verification of doctors and other healthcare professionals.&nbsp; The process helps hospital administration confirm the validity and availability of physicians and monitor their schedules.<h3 class="heading-node" id="4o77s744u" style="text-align: justify">Student Monitoring - Welfare Hostels</h3>The usage of AUA/KUA services and the installation of biometric scanner devices in welfare hostels have reduced incidences of ghost student records and increased efficiency in fund allocation and utilization. By helping hostel students authenticate themselves every day, the hostels can track their attendance precisely and get rid of ghost student records. The process has helped the administration prevent the misappropriation of funds and ensure resources are used efficiently to support the students.<h3 class="heading-node" id="z2jovtjh0" style="text-align: justify">Scholarship Monitoring - Universities/Colleges</h3>Tracking student attendance is imperative for colleges and universities. To prevent fraudulent activities or misrepresentations in biometrics, institutions can rely on AUA/KUA. It helps verify student identity quickly and accurately using the Aadhaar number. It also helps universities to disburse scholarships to students.<h2 class="heading-node" id="4hrtq082o" style="text-align: justify">AUA/KUA, a necessity for seamless identity verification</h2>AUA/KUA license is a vital investment for any business that requires seamless identity verification. Instead of taking on the complex and expensive task of implementing an in-house identity service, businesses can consider partnering with a reputable digital identity service provider that offers a comprehensive AUA/KUA solution to combat identity fraud. Check out our exclusive AUA/KUA suite that offers the following features.<ul class="list-node" id="mfwgkl508"><li>Cloud and on-premise hosting</li><li>Face authentication-based transactions</li><li>Scalable system (handles 10 million hits/day)</li><li>Live network operations team</li><li>Supports all stacks (Web, Windows &amp; Android)<ul class="list-node" id="pmn5y19a1"><li>UIDAI-approved biometric scanners</li><li>Fraud monitoring systems</li></ul></li><li>Multiple ASA switch (switch transactions to ASA)</li><li>Live dashboard monitoring</li><li>Assured UID compliance</li></ul>Want to know more about our AUA/KUA suite? Write to us at <a class="link" href="mailto:business@m2pfintech.com.&nbsp;">business@m2pfintech.com.&nbsp;</a> &nbsp; &nbsp;<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/" target="_blank" rel="noopener">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech" target="_blank" rel="noopener">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Streamline Customer Identification with AUA/KUA

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/01/EDO-suite-Banner-1.webp" alt="M2P Fintech" title="" width="100%" height="529">Does your organization collect or store Aadhaar numbers?&nbsp;&nbsp; Then you are at high risk.&nbsp;&nbsp; With identity thefts, data breaches, and cyber fraudsters on the rise, businesses are vulnerable to financial and reputational damage. While conducting <a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/" target="_blank" rel="noopener">digital KYCs</a> that involve Aadhaar card verification, the risk of data exposure and misuse of customer/employee information by fraudulent entities is even greater. These privacy concerns and security breaches cost businesses billions in losses.&nbsp; Thus, it is imperative for organizations to follow strict security protocols for Aadhaar card verification. Complying with the Aadhaar masking mandates of regulators such as UIDAI, RBI, SEBI, and IRDAI, is vital to protect Aadhaar data.&nbsp;<h2 class="heading-node" id="ah6szvxl9" style="text-align: justify">What is Aadhaar masking?</h2>Aadhaar masking is a critical security directive issued by the UIDAI and regulatory bodies to protect Aadhaar data and prevent identity fraud and data scams. According to this mandate, the first 8 digits of your Aadhaar card number must be replaced by asterisks and appear as “XXXX-XXXX”, while the last 4 digits shall remain as it is. Aadhaar card masking serves as an extra layer of protection to conceal and protect sensitive information.&nbsp;&nbsp;<h2 class="heading-node" id="wnfhl36ra" style="text-align: justify">How Aadhaar masking came into prevalence?&nbsp;</h2>According to the <a class="link" href="https://uidai.gov.in/images/news/Judgement_26-Sep-2018.pdf" target="_blank" rel="noopener">Supreme Court of India’s judgment in 2018</a> on Aadhaar privacy concerns, “No entity, including a requesting entity, which is in possession of the Aadhaar number of an Aadhaar number holder, shall make public any database or record containing the Aadhaar numbers of individuals, unless the Aadhaar numbers have been redacted or blacked out through appropriate means, both in print and electronic form.”&nbsp;&nbsp; The UIDAI stipulated that no entity could save Aadhaar numbers in their database in any form (physical or virtual). However, the entity can and must mask the first 8 digits before storing any physical or virtual copy of the Aadhaar cards.&nbsp; Apart from the above regulators, the <a class="link" href="https://www.lifeinscouncil.org/component/cir_020_29.01.2019.PDF" target="_blank" rel="noopener">IRDAI,</a> <a class="link" href="https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=11566" target="_blank" rel="noopener">RBI,</a> <a class="link" href="https://www.sebi.gov.in/legal/circulars/apr-2020/clarification-on-know-your-client-kyc-process-and-use-of-technology-for-kyc_46565.html" target="_blank" rel="noopener">SEBI,</a> and The Ministry of Finance also came out with their mandates to cloak the Aadhaar numbers. &nbsp;<h2 class="heading-node" id="lmvf8p2ze" style="text-align: justify">Why Aadhaar masking?&nbsp;</h2>Following the regulations and judgments, the regulated entities in India must use only masked Aadhaar numbers in their existing databases and can accept only masked Aadhaar cards going forward. This could be the only way to reduce identity theft while ensuring compliance and data safety.&nbsp;<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/01/EDO-suite-masking-1.webp" alt="M2P Fintech" title="" width="100%" height="529">Organizations that fail to mask Aadhaar cards will face severe consequences in the form of penalties, reputational damage, additional audits, imprisonment, and/or even complete shutdown. Hence, being agile and staying up to date with regulatory requirements is crucial.&nbsp;&nbsp;<h2 class="heading-node" id="jev9xd6hg" style="text-align: justify">How can businesses optimize and automate Aadhaar masking?&nbsp;</h2>Businesses today find it challenging to address the operational aspects of compliance and data handling. Masking large chunks of Aadhaar card data accurately requires immense manpower, time, and cost. There is also a huge dependency on humans and could be prone to errors.&nbsp; Using a robust Aadhaar masking tool is a great way to optimize the process and drive efficiencies.&nbsp; Our EDO Suite helps businesses automate the task of Aadhaar masking in no time while ensuring accuracy and zero errors.&nbsp;&nbsp;<h2 class="heading-node" id="lnv5j9vro" style="text-align: justify">What is EDO Suite?&nbsp;</h2>Powered by AI and ML, EDO Suite is an efficient Aadhaar masking tool that intelligently detects and masks Aadhaar data instantly. It enables your organization to be 100% compliant with UIDAI and RBI regulations without any hassles.&nbsp;&nbsp; EDO suite’s instant masking feature covers up the first 8 digits, revealing only the last 4 instantaneously. It is capable of analyzing and masking only valid Aadhaar numbers from a group of random numbers.&nbsp;To ensure over 98.3% accuracy, the EDO suite employs the Verhoeff algorithm.&nbsp; A checksum formula for error detection, the Verhoeff algorithm is used to eliminate errors in data entry and validate Aadhaar numbers.&nbsp;&nbsp; EDO can be deployed entirely in-house at a very low cost, with no intervention or reliance on third-party algorithms. Till date, we have processed more than 10 crore Aadhaar numbers in multiple formats.&nbsp;<h2 class="heading-node" id="nb1rdh0io" style="text-align: justify">Key components of EDO&nbsp;</h2><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/01/EDO-suite-masking-2-1.webp" alt="M2P Fintech" title="" width="100%" height="529">EDO Scan&nbsp; A smart tool that can scan the entire computer or server and mask all Aadhaar cards to provide detailed scan reports. This is primarily used for ‘Legacy Data Masking’.&nbsp;&nbsp; EDO Lens&nbsp; A camera SDK that can be integrated into any customer onboarding mobile solution and the Aadhaar number will be masked in real-time while capturing the document.&nbsp; EDO Connect&nbsp; Powerful APIs where an entity can send an Aadhaar image, and EDO Connect will return a masked Aadhaar.&nbsp;<h2 class="heading-node" id="tfbc1m9vh" style="text-align: justify">How does EDO work?&nbsp;</h2>EDO provides two primary services.&nbsp;<ul class="list-node" id="73uyxx4vs"><li>Legacy Data Masking&nbsp;&nbsp;</li><li>New Data Masking&nbsp;</li></ul>Legacy Data Masking&nbsp; Legacy data is consumer data that companies have already collected in the database since the issuance of the Aadhaar cards in 2010. EDO helps in masking those legacy data in a matter of seconds.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/01/EDO-suite-masking-3.webp" alt="M2P Fintech" title="" width="100%" height="529">New Data Masking&nbsp; The new data is the real-time consumer data that is collected and added to the database. New Aadhaar data being added to the database can also be masked before storage.&nbsp;&nbsp;<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/01/EDO-suite-masking-4.webp" alt="M2P Fintech" title="" width="100%" height="529"><h2 class="heading-node" id="h237hl4pi" style="text-align: justify">Aadhaar masking made quick, simple, and convenient</h2>EDO caters to a business’s Aadhaar masking needs with simple, transparent pricing, and best-in-class technology. It is well-suited for both on-premise and cloud model.&nbsp;&nbsp; Features and Benefits&nbsp; 1. Supports multi-format masking &nbsp;<ul class="list-node" id="p5pg7p1v9"><li>First eight digits of the Aadhaar with a red strip and ‘XXXX-XXXX' in excel sheets&nbsp;</li><li>Multiple Aadhaar numbers on the same page/image&nbsp;</li><li>Aadhaar numbers in different formats/files&nbsp;&nbsp;&nbsp;</li><li>Only Aadhaar numbers in an image with a foreign object. For e.g., an Aadhaar card with a mouse/pen&nbsp;</li></ul>2. Won't mask non-Aadhaar numbers&nbsp; 3. Seamless masking with multiple options<ul class="list-node" id="trs6hfopa"><li>Full Detection - Scans the entire system&nbsp;</li><li>Choose Folder – Scans only a specific folder&nbsp;&nbsp;&nbsp;&nbsp;</li></ul><ul class="list-node" id="469pjy9v3"><li>Instant Masking - Masks any single image&nbsp;</li><li>Auto Scan - Sets the time for automatic masking of the entire system or a specific folder&nbsp;</li></ul>4. Detects and masks the selected files in order to thoroughly analyze dupes, non-Aadhaar numbers, and formats&nbsp; 5. The detection results are made available as downloadable reports&nbsp; 6. Cancels non-Aadhaar data and provides date, scan IDs, time stamps, and status (canceled/completed)&nbsp; Ready to mask Aadhaar in an instant, the right way?&nbsp;&nbsp; Connect with our expert team at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>.&nbsp; We’ll be glad to reach out and get you the best-in-class Aadhaar masking solutions right away!&nbsp; <a class="link" href="https://m2pfintech.com/newsletter/" target="_blank" rel="noopener">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/" target="_blank" rel="noopener">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech" target="_blank" rel="noopener">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Mask Aadhaar in an Instant, the Right Way

Transform Digital Onboarding with VKYC Solutions

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/10/e-KYC-2.0-in-Egypt-blog_1-02.webp" alt="M2P Fintech" title="" width="100%" height="236">The last 6 years have been the fintech era for Egypt. Its rather traditional financial system has been steadily progressing toward digitalization. Recent reports affirm that the country is turning into the entrepreneurial hotspot for burgeoning fintech startups in North Africa, and its financial services sector is expected to grow at 12% yearly until 2025. The growth can be attributed to the thriving fintech adoption in North Africa, the boost in internet usage in Egypt, and most importantly, the government's commitment to attaining its Vision 2030.<h2 class="heading-node" id="wpgeh9ggx">Financial Digitalization&nbsp;</h2> In light of the Vision, the Central Bank of Egypt (CBE) designed and developed numerous policies with the prime objective of improving the <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">financial inclusion</a> of the country as well as transforming the nation into the regional hub for fintech innovations. One such approach is digitalization in the financial services industry. Digitalization is one of the three strategic pillars of Egypt's Vision 2030, which aligns with the country's allegiance to the <a class="link" href="https://www.undp.org/sustainable-development-goals">United Nations Sustainable Development Goals (SDGs).</a> The Vision's framework holistically fosters the transformation of Egypt into a digital or cash-free economy. With over 95 million young, unbanked/underbanked population, Egypt exhibits an extended appetite for digitalization, inclusion, and fintech innovations.According to <a class="link" href="https://www.mastercard.com/news/eemea/en/newsroom/press-releases/press-releases/en/2022/august/mastercard-new-payment-index-2022-consumers-in-egypt-embrace-digital-payments/">Mastercard's New Payment Index 2022 report</a>, 61% of Egyptian banking customers feel safe using mobile apps to send money to people or make payments to both online and offline merchants. In addition, 42% (i.e., four in ten) are keen to share their financial data to access payment tools/mobile applications that help them manage their finances.In 2021, Egypt's digital banking system witnessed an enormous upswing in mobile banking transactions. While the number of digital banking transactions increased by 107%, the value climbed by 159%. The number of internet banking users increased by 30% (y-o-y), and the value of transactions through digital channels increased by 60%. Further, the number of transactions over mobile wallets surged 108% reaching 212 million transactions, and e-commerce grew by 34% registering 60.3 million transactions. The value of electronic purchases using bank cards increased by 40% and climbed to EGP 23 billion from EGP 14 billion in the fiscal year 2019/2020. Overall, the banking system processed electronic transactions worth EGP 2.8 trillion during the fiscal year (FY) 2020/2021.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/10/e-KYC-2.0-in-Egypt-blog_1-.webp" alt="M2P Fintech" title="" width="100%" height="236"> Mobile wallets covered a substantial fraction in the digitalization leap. Mobile wallet transactions rose to 268 billion EGP in 2021 from 88 billion EGP in 2020, attaining a 200 % increase. The number of banks providing electronic wallet services grew to 23, increasing the number of electronic wallets from 9 million in 2020 to 26 million in 2021. On the other hand, e-commerce transactions increased from 16 billion EGP to 30 billion EGP.Furthermore, the volume of government receipts through banking channels has reached more than 662 billion EGP. The volume of annual electronic transactions through electronic points of sale has witnessed a great leap from 110 billion EGP to 170 billion EGP. Such a mammoth uptick in digital adaption significantly scaled the financial ecosystem, calling for streamlined and robust Know Your Customer (<a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">KYC</a>) procedures that are crucial to detect risk factors and avert financial crimes such as identity theft, <a class="link" href="https://m2pfintech.com/blog/how-to-combat-money-laundering-2/">money laundering</a>, and terrorist financing.<h2 class="heading-node" id="weyytqtfu">Current KYC regime</h2> Egypt's KYC regime has the following tiers: Full KYC and Simplified KYC. To process a full KYC, FIs require<ul class="list-node" id="j6d4yly7a"><li>National ID&nbsp;</li><li>Customer ID number&nbsp;</li><li>Date of birth</li><li>Gender&nbsp;</li><li>Nationality&nbsp;</li><li>Religion&nbsp;</li><li>Legal form&nbsp;</li><li>Full address</li><li>Mobile and/or Telephone number</li></ul>When simplified KYC was first set up, it required FIs to validate only the National ID. However, when CBE released the second framework for its simplified KYC in 2016, it housed pioneering programs demanding minimum requirements for limited mobile money accounts as an alternative to the standard bank accounts with full KYC requirements. In both cases, bank personnel or a CBE licensed service provider conducts Customer Due Diligence (CDD) at customer premises and completes the KYC procedures. To perform <a class="link" href="https://m2pfintech.com/blog/crack-the-kyc-jigsaw-ease-onboarding-compliance/">KYC</a>, companies must obtain and verify customers' data, including name, address, and date of birth, using government-issued identification cards, passports, utility bills, and mobile bills. Additionally, the customer's credibility is also validated by verifying their job license and sports club membership/subscription (if any). If a person is found to be a Political Exposed Person (PEP), financial institutions must take extra steps to check out that person.<h2 class="heading-node" id="c8l4ipur3">Rise of e-KYC</h2> The government and the Central Bank of Egypt have been proactive and quick to recognize the importance of a digitized KYC system in enabling frictionless financial digitalization. Subsequently, the underpinning was laid in 2019 when the <a class="link" href="https://fintech.cbe.org.eg/home/sandboxCohorts?en">CBE's Regulatory Sandbox</a> rolled out the red carpet for its first cohort in "e-KYC."The regulatory sandbox allows fintechs to trial their new products, services, technologies, and business models. The sandbox approach encourages innovative fintech products and services, reduces time to market, and cuts the cost involved in developing the products and services. It also enables CBE to understand disruptive fintech products and services before deciding to regulate them and collect evidence that can be used to draft practical guidelines and robust regulations. After a successful testing phase, the CBE is ramping up to launch a pilot of the electronic Know Your Customer (e-KYC) service to enable citizens to access financial services online without the need to walk into a brick-and-mortar bank. Here's a quick overview of how the modern e-KYC compares to the current KYC regime.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/10/e-KYC-2.0-in-Egypt-blog_4.webp" alt="M2P Fintech" title="" width="100%" height="236"><h2 class="heading-node" id="z3b0iamw8">Unlocking the potential of e-KYC</h2> Egypt is a disruption-ready market. Although over 75 million actively use the internet, as of April 2022, about 2/3 rd of the population is underbanked, and a significant portion is still unbanked. Further, in accordance with the Egyptian Money Laundering and Terrorist Financing Combating Unit (EMLCU), the CBE issued guidelines to all banks. It entails banks to draft new simplified procedures to open bank accounts for the self-employed and owners of micro-sized projects to encourage greater inclusion. Currently, 32 banks offer internet banking facilities, and 28 have obtained a license to render mobile-based banking services to their customers. In this unique landscape, leveraging e-KYC to streamline onboarding will boost financial reliability, stability, and growth. It will also augment market penetration and improve financial inclusion in the country. With the help of e-KYC, consumers will be able to verify themselves online in minimal steps, including document verification, data extraction, and face verification. They can see their verification status once these steps are completed. This would make the digital onboarding process simpler and secure, thereby helping customers trust financial entities more and making digital transactions easier and more accessible. On the other hand, it would assist FIs in extending services to a larger community of Egyptians living and working in the country and the Egyptian diaspora living abroad. In addition, e-KYC would help to lower risk and dramatically expand credit products like consumer lending as the process would speed up loan approvals. Even though the validation through e-KYC is still nascent, financial experts believe these approvals are likely to be high-value loans for houses and cars.<h2 class="heading-node" id="3qe9qztw4">Benefits of e-KYC</h2> In such a cyberized environment, e-KYC procedures can immensely benefit both financial institutions and customers. Here are some of them: Simple, Instantaneous, Accessible&nbsp;&nbsp;Traditionally, paper-based KYC is a time-consuming process. It can take days or, in some cases, weeks to complete the verification process. On the other hand, e-KYC is a fully automated or digital process that almost eliminates manual intervention. This makes it convenient for individuals and businesses to fill out forms without needing to visit a physical branch or office. Further, as the KYC data is transferred in real-time, it takes just a few minutes to verify and issue when an individual is opting for a banking service or product. Since it can be performed 24/7, 365 days, it increases scalability and makes it more accessible to consumers. Boosts customer acquisition&nbsp;According to a recent report, most Egyptians prefer getting a loan from their friends and family instead of approaching a FI, owing to the extensive time and effort involved in the KYC procedure. E-KYC is one of the optimal solutions to overcome this limitation. The digitized system makes the onboarding process simple and quick and is highly accurate compared to the KYC procedure. As it drastically reduces the waiting time to complete the verification, e-KYC enhances the customer experience from the very first interaction with the bank. Therefore, it serves as a critical factor in attracting new customers and maintaining loyal customer engagement.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/10/e-KYC-2.0-in-Egypt-blog_1-05.webp" alt="M2P Fintech" title="" width="100%" height="236">Mitigates fraud&nbsp;In Egypt, digitalization in the banking sector is in progress. Consequently, banks and non-banking financial companies have to work with the remnants of old legacy systems. However, with steadily growing online transactions, FIs ought to preemptively identify and address systematic digital fraud. The e-KYC system includes technologies such as OCR, facial recognition, liveness detection, and fraud detection to monitor accounts continuously for prohibited transactions or activities. This helps banks detect and eliminate falsified onboarding.&nbsp; Improves operational efficiency&nbsp;By integrating e-KYC, banks can augment profits, enhance regulatory compliance, and transmute customer experience. As it requires zero to minimal manual intervention, it eliminates the need to hire/train agents for KYC procedures. This helps FIs to devote their personnel to other core business functions. Additionally, e-KYC promotes a cloud-based online system to store customer information, thereby replacing the need for paper and document management. Such practice reduces the cost associated with regular KYC compliance. Safe and Secure&nbsp;First off, e-KYC is a consent-based system that enables an individual to share data only upon his or her own accord and consent. Secondly, it entails fewer human beings reviewing sensitive data. Third, the customer's account details, transaction data, and other financial information are secure as it is an online process. This protects the individual's right to privacy and minimizes identity theft, fraud, money laundering, loan scams, etc.<h2 class="heading-node" id="7fd6wjrq0">M2P - a leader in KYC services</h2>M2P's e-KYC suite facilitates businesses to get customer KYC from anywhere in the nation while adhering to all regulatory requirements. It enables financial institutions to control the user data necessary to be captured from the customer, which is collected through the user journeys built into the partner/bank's digital assets. The customer's KYC is performed using the bank's/authorized entity's KYC <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">APIs</a>, and the outcome of the activity is captured by M2P.&nbsp; Our e-KYC Gateway facilitates seamless customer onboarding for corporates &amp; to better the service delivery by governments. Further, <a class="link" href="https://m2pfintech.com/kyc-suite.php">M2P</a> ensures robust integration between the partner's/bank's digital assets and issuing bank's <a class="link" href="https://m2pfintech.com/blog/future-of-core-banking-systems/">core banking</a> solution.Our services do not stop with e-KYC. We are incumbents in rendering extensive e-KYB to lending businesses. Our Bank Statement Analyzer is powered by artificial intelligence and machine learning that processes statement data in real-time. The analyzer runs deep analytics to generate accurate reports that help financial institutions and lending businesses make quick credit assessments and decisions. We are launching soon in Egypt. If you are interested in partnering with us, write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com.</a> <a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Tag: "Kyc Suite (18)"

M2P Fintech