How Outdated Systems Bleed Wealth: The Case for Smarter KYC Tools
As more and more people join the global investment community, the need for robust security is more important than ever. Cybercriminals are always looking for new ways to exploit online investment channels. And regulatory scrutiny has increased too, to mitigate some of the risks.
If you are relying on outdated systems, you cannot adequately protect your clients’ data and you’ll fall short of regulatory requirements. Understanding how outdated systems bleed wealth will help you make the changes necessary for modern cybersecurity and compliance.
Here is the case for smarter KYC tools.
Failing Systems and High Maintenance Costs Bleed Wealth
Outdated systems can cause businesses a lot of technical and operational headaches. Firstly, they can cause repeated system failures and breakdowns. This, in turn, leads to costly downtime. And of course, there’s the matter of all the money it costs in repairs and maintenance just to keep these systems going.
It is simply not a financially sound strategy to follow, especially in the long term. The money wasted on extending the lifespan of your legacy systems can far outweigh the costs of introducing modern solutions. But there’s an even bigger problem with keeping these outdated systems going.
They are prone to errors, which negatively impact data accuracy. These errors, if not immediately noticed and addressed, can cause a range of accounting and reporting anomalies. This may lead to a loss of revenue that quietly bleeds wealth from your organization.
A Decline in Client Trust and Loyalty Bleeds Wealth
If you’re relying on old and outdated systems to manage your client's data, you risk your client base turning to your competitors. And that can bleed even more wealth from your business, in lost potential future revenue and referrals.
Let’s explain. The customer lifecycle consists of 5 stages — awareness, consideration, purchase, retention, and advocacy. It starts when customers first become aware of your business, and ultimately ends in the kind of loyalty that seems to refer others to your business.
Customer loyalty brings customer retention, repeat business, positive reviews, and unsolicited referrals. That is why it is so crucial to manage the client lifecycle effectively.
The best client lifecycle management software helps you do this. It streamlines the onboarding of new customers, implements strict KYC policies, and improves the client experience to increase client satisfaction, trust, and loyalty.
Cybercrime and Financial Fraud Bleeds Wealth
Unfortunately, outdated systems can have even more serious effects. There is a higher risk of cybercrime and financial fraud transactions with legacy systems because they lack the security measures to prevent these crimes. Cybercriminals know this and will exploit this weakness every chance they get.
Online investment businesses are particularly at risk. Whether you offer diamond investing, real estate investing, or any other type of investment, this can cost both your customers and your business money. It will also cause client trust and loyalty to decrease.
When investor confidence in the business plummets, it can cripple the business. Fortunately, modern solutions mitigate these risks with stricter security measures, built-in.
Know-your-customer (KYC) software ensures accurate customer identification and verification in line with anti-money laundering (AML) requirements. This keeps investments safe and keeps businesses compliant.
Modern KYC Tools Prevent the Issues That Bleed Wealth
Banks, credit unions, cryptocurrency platforms, and online investment companies have thwarted cybercriminals and improved client confidence in their companies with KYC software. Indeed, businesses everywhere, big and small, and in every sector are realizing the advantages of a robust KYC process.
Issues like incorrect client identification, identity misrepresentation and theft, cybercrime, and financial fraud can cost companies many thousands if not millions of dollars. Modern KYC tools mitigate all these risks, to stop these common issues from bleeding wealth.
Sharing KYC information on Blockchain allows financial institutions to increase efficiency, ensure better compliance, and improve the overall customer experience. Blockchain isn’t just for cryptocurrency transactions.
Do you want to know more about how you can use Blockchain technology in other applications? Our handy guide to understanding Blockchain covers all the basics.
The Case for Implementing Smarter KYC Tools
KYC tools are not new. They have been around for quite a while. KYC offers regulatory compliance and facilitates regulatory reporting. They improve customer data safety and prevent fraudulent transactions. And they can boost a business’s reputation for safe and secure data capture and transactions.
But the latest smart KYC tools can offer your business even more to stop cybercrime before it can even start.
Fighting financial crime with AI is not a trend, but the new norm. This is why smart KYC tools now have artificial intelligence (AI), as well as machine learning (ML), and other innovative technologies built in. They offer businesses identification and verification processes with more accuracy, speed, and security.
About The Author
Contact Hannah Lewis privately here. Or send an email with ATTN: Hannah Lewis as the subject to contact@investorshangout.com.
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