Identity Verification in Real Estate and Its Real-World Use Cases
The real estate industry is in dire need of identity verification processes. The reason being, the transfer and flow of illegal money across the globe. Criminals are always on the search for opportunities that could contribute to their embezzle funds transfers. Money laundering and terrorist financing are made possible for criminals to conduct it through real estate. Fraudsters have found tricks to fool the real estate agency through which they have learned the ways to clean the ill-gotten gains before enjoying them.
Study shows that the real estate has reached to the crimes of worth $1.6 trillion annually. The lack of a monitoring system estimates this value to increase in the coming years. Here comes the need for identity verification. Identity verification of the property seller, property buyer, and the entities that are offered with certificates for multiple purposes.
There is a need to verify the person involved in dealing with real estate. This will reduce the chances of bad actors if they are screened through various verification parameters. This step is not as complicated as it seems. Online customer identity verification services are available, which help you verify the identities in real-time, providing a streamlined process.
Local Legislations and Real Estate
For the accurate and transparent transfers of property, local regulators are active. UK, Germany, Canada, Singapore, Australia states are all adopting efficient ways in real estate to streamline the process of customer verification. To avoid reputational damage to a company, now the organization that complies with local regimes is considered more reputable.
By implementing an Electronic Verification System (EVS), real estate agencies can deter the risks of fraud. It is essential to screen the customers against electronic databases that contain the lists of exposed persons, either they are money launderers, politically exposed, or terrorists. These updated lists would help in verifying the identity in seconds. It is a smart way to protect your real estate business from criminals.
Use Cases of Identity Verification In Real Estate
To strengthen the overall dynamic security measures, it is crucial to integrate digital ID verification services with the system. This verification system authenticates the customer based on several supporting shreds of evidence that could be official identity cards, bank accounts, and other documents. The following are some of the use-cases that are covered in real estate by identity verification.
Customer Due Diligence: Identity verification is mandatory to perform Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) processes in the system to verify the customers against strict verification checks. This step serves the purpose when it comes to avoiding illicit funds transfers.
High-risk Transactions: Money launderers have smart tricks to transfer money across the world. It gets hard to track the path of money flow and to differentiate dirty and clean money. Real estate can verify each of its customers before proceeding with any transaction. The property documents should be checked to make sure that it is coming from an honest entity.
Updated Criminal Databases: Identity verification APIs collaborate with the updated criminal records against which identities are verified. These criminal records include the list of politically exposed personalities, money launderers, cybercriminals, terrorists, and similar entities. Against these sanction lists, each object is screened to make sure that on-boarding identity has not been a part of any criminal activity before or currently.
Compliance Requirements: Local regulators have proposed strict laws regarding identity verification of the customers. These laws came into effect as a result of criminal activities through real estate in various areas of the world. To avoid regulatory penalties, it is critical to comply with the requirements of compliances strictly.