Ask Sumsubers: How can trading companies fight fraud without losing customers?

Let's talk to Pati Murtazalieva, VP of Global Sales Operations, about how trading businesses can combat fraud while scaling and retaining clients.

Pati Murtazalieva

VP Global Sales Operations

Sumsub continues to receive questions from our followers regarding the specifics of regulatory compliance, verification, and everything in between. We’ve therefore decided to launch a bi-weekly Q&A series where our legal, tech, and other experts address the most frequently asked questions. Tune in to The Sumsuber and our social media every other Thursday for new answers, and be sure to ask about the topics that interest you.

This week, Pati Murtazalieva, VP of Global Sales Operations, will briefly discuss how trading companies can combat fraud while scaling and retaining clients.

Follow this bi-weekly series and submit your own questions through our Instagram and LinkedIn.

How can trading companies fight fraud without losing customers?

First and foremost—do your KYC properly!

According to Juniper Research, it’s predicted that there will be $362 billion in losses from online payment fraud globally between 2023 and 28. Meanwhile, trading is one of the most high-risk industries in the world for fraud, money laundering (ML), and terrorist financing (TF)—also making it one of the most heavily regulated industries.

To combat the increasing threat of fraud without losing customers, and to continue scaling in both existing and emerging markets, trading companies should make sure they have:

Thorough KYC procedures. Implement rigorous Know Your Customer (KYC) procedures to ensure accurate identification and verification of customer identities.
Due Diligence and AML screening. Conduct comprehensive due diligence, including Customer Due Diligence (CDD), Enhanced Due Diligence (EDD), and Anti-Money Laundering (AML) screening. This involves scrutinizing customer backgrounds and transactions to detect and prevent fraudulent activities.
Portfolio analysis. Identify the nature of your customers and their portfolios, especially high-net-worth individuals and institutional investors engaged in large transactions. This proactive approach helps prevent fraud by understanding and monitoring the potential risk associated with specific customer segments.
Risk assessment for legal entities. Assess the risk level for all associated legal entities, recognizing that fraud may occur not only at the individual level but also within a broader network of legal entities connected to trading operations.
Continuous monitoring. Implement ongoing monitoring of all operations, including transactions, trading, and non-trading operations. This ensures prompt detection of suspicious activity and allows for timely intervention to prevent fraud.

Innovative anti-fraud technologies. Stay at the forefront of security by incorporating the latest and most innovative anti-fraud technologies. This can include advanced analytics, machine learning, and artificial intelligence systems designed to identify and respond to emerging fraud patterns.