In this digitally evolving era, High-Net-Worth Individuals (HNWI) are becoming a prime target for criminals. They hack into their accounts and request the transfer of funds. Evidently, the application is coming from legit customers and wealth management companies see it as original. This is why these firms need to enhance security as they deal with Ultra High Net Worth Individuals (UHNWIs) and increased value assets.
Hence, the wealth management sector requires biometric recognition for mitigating criminal attempts to defraud an account. With digitization, every industry is shifting its operations online. Similarly, wealth management firms are also taking part in this race by providing customers with remote access and transactions. The blog entails benefits that biometric recognition provides to this sector.
Biometric User Authentication – Checks to Secure Wealth Management Companies
Due to the high chances of fraudulent transactions, account takeover, money laundering, and organized crimes, wealth management is becoming a highly regulated sector. Criminals are coming up with different techniques like spoofing and document forgery to escape the biometric ID verification checks. This way they illegitimately request transfers of big sums of money without the actual owner even noticing.
Therefore, wealth management firms require robust biometric recognition solutions. This way they can prevent inconvenience for legit HNWIs while staying in line with regulatory standards. With solutions like real-time selfie-based identification and liveness detection, wealth management companies can ensure that customers requesting funds transfers are the actual owners. Criminals are targeting this industry for several reasons, the most prominent among them are discussed in the next section;
- HNWIs are serving as an attractive target for criminals as they can reap high returns through scams. The lack of standard profile and spending patterns further pave way for fraudsters. However, with efficient biometric recognition in place, criminal activities can be placed under the radar.
- Customers drive away from companies involving inconvenience due to multi-level authentication. This further makes them an easy target for criminals.
- HNWIs are easy to impersonate as they are well known in society. Due to lack of efficient IDV mechanisms, criminals bypass biometric security checks by simply entering the customer’s mother’s maiden name or other such details.
- The lack of biometric user authentication also leaves room for fraudsters to exploit the accounts of customers that have others for managing their funds. They can either be housekeepers, PAs, or designated managers.
Biometric Security System – Benefits for Wealth Management Firms
Due to the rising risk of criminal activities, single-factor authentication is no more sufficient. Fraudsters are using sophisticated ways to exploit UHNWIs and HNWIs. As they hold high net value and assets, criminals are massively targeting their accounts to reap their illegitimate share of funds. However, with biometric screening solutions in place, wealth management companies can combat fraudulent activities such as account takeover, illegal transactions, and others.
Moreover, with services like liveness detection and facial verification this technology is providing enhanced security to managing firms. With AI-powered biometric identity verification, wealth management companies can keep track of transactions to detect suspiciousness in time. More of the benefits of biometric recognition includes;
Drives Effortless Experience to Customers
HNWIs expect different levels of assistance from wealth management companies. For instance, they demand access to their accounts across various devices such as tablets, laptops, and smartphones. In the era of biometric recognition, wealth management firms face an increase in fraud attempts while meeting the requirements of customers.
In order to ensure an effortless and convenient experience for HNWIs, wealth management firms require biometric user authentication solutions. They provide facial verification and liveness detection to ensure presence of customers.
Builds Customer-to-Company Trust
For wealth management companies, keeping their operations secure to build customer trust is the topmost priority. To limit chances of fraudulent attempts, they require seamless biometric recognition mechanisms. This way they can provide more security to HMWIs’ transactions and funds handling.
With increased trust and customer satisfaction, wealth management companies can mitigate reputational damages and retain a huge user base. Therefore, in building long-term trust, biometric screening solutions are the firms’ go-to options.
Prevents Fraud Attempts
With account take over fraud losses accounts to be crossing $11.4 billion, it has become mandatory for wealth management firms to bring in efficient precautionary measures. For secure digital onboarding and money-involved operations, they need to integrate robust biometric recognition solutions. This way wealth management companies can readily detect and deter fraudulent attempts while providing a secure environment to HNWIs.
In a Nutshell
The wealth management industry is facing an exceedingly high risk of criminal activities. Due to bringing digitization into operation, it is becoming a prime target for fraudsters to exploit every loophole. However, if the firms fail to assure a secure customer experience and prevention of fraud, they can face serious legal repercussions. Therefore, biometric recognition is a reliable solution for wealth management companies to identify global customers and restrict money mules.