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

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.

Pati Murtazalieva

VP of Global Sales Operations