Global companies world over are witnessing a shift towards adopting the digital space to conduct their business. In order to reach the growing number of mobile users, adopting this route was a smart move. However, this digital adaption to the internet platform has potentially exposed companies of their most prized aspect – Information.
In an era of data breaches, major companies have become the victim of compromising data leaks. This has led to massive financial repercussions globally and consequently unimaginable reputational losses. In a highly sensitive business environment as the KYC industry, which deals in PII data. The importance of security and confidentiality in KYC verification becomes all more necessary. Let’s see how KYC service providers are protecting user information from being jeopardized.
Implementing measures that secure user data
Learning lessons from the GDPR – The EU based General Data Protection Regulation is a set of directives issued from the floors of the parliament that provide rights back to the citizens of the EU, or data subjects as they are commonly known. One of the primary reasons of the GDPR is to harmonize data privacy and security from an employer’s perspective, making sure the priority remains on the end user.
A law of this nature basically changes the business mindset and ensures the necessary business processes are also implemented. The most important of them being Security of Processing and Encryption. KYC service providers are compelled to maintain the encryption and pseudonymization of personal data. Ensure necessary availability to personal data during technical and physical incidents. Businesses are to take into account the risk associated with processing sensitive information and take the necessary steps that safeguard that information, from accidental and unlawful destruction, loss, manipulation, disclosure, and access to personal information.
Global regulatory requirement in data security for third-party intermediaries – Many global regulations for AML suggest the utilization third-party intermediaries perform due diligence on behalf of the obliged entity. This intermediary (The provider) is subject to storage practices that please the requirements of the obliged entity or FI. These are high-level cyber-security measures that ensure the protection of valuable information from unauthorized access.
Implementing credible certifications for authority – an underlooked area for KYC providers to vet against. Suitable certifications play a crucial role in raising the bar of how PII information is managed by the service provider. PCI compliance is specifically sought after by banks, as it is a testament for banks that the provider PAN masks the sensitive financial information from view. Pan Masking is the process of disguising credit card numbers with ‘*’ in between the first four digits and the last four digits.
As much as KYC verification has improved over the years in respect to automation and effectiveness, the risk posed by data breaches has potentially jeopardized the security of data. The KYC providers who are implementing the necessary measures are in a better position to protect and maintain the confidentiality of their end-user data and the companies image. This security of data ensures future KYC verifications to be effective and more secure than their predecessors.