The due diligence process is an ongoing process of verification in most industries and it is carried out at various levels of customer identification. The process is being implemented in different sectors with improved results in preventing crimes and scams. The new platforms that previously never existed in the old times, such as cryptocurrencies and non-fungible tokens, are based on investors’ investments. The investors are the main providers of these platforms and all the other businesses that developed the digital means of trading and financing. With so many advantages of online trading platforms, the new emerging technologies of trading are getting improved each day, the revenues calculated for these investment and funding platforms are 8 billion US dollars in 2021.

Risks For Allowing Unverified Investors

The unverified identity issue is a major concern for every digital platform out there. With multiple losses due to identity thefts in the cryptomarket, businesses are highly recommended to implement the KYI (Know Your Investor) solution.
With more than 700 million lost in recent years, the investment platforms involve complete KYI regulation of the investor to ensure the system’s security. The risk involved due to the participation of non-accredited investors is the use of resources by anonymous entities which can significantly affect the fundraising procedures. 
Unverified investors may be the attackers in disguise who are availing the investment services for the means of misusing the funds and finances of the users and other clients. The other risks associated with unverified identities are the leak of privacy and other business data such as the financial status of the business which is meant to be confidential. The leaked data can be used against the business as the new rivals and competitors of the business are always looking to steal the strategic data to fulfill their needs of advancements in the market.

Foreign Investor Due Diligence Service

The companies and businesses are keen to verify their clients and other new investors to minimize the associated risks. With the foreign investor due diligence service the new investors are assessed for the proof of their identity. The due diligence process is carried out several times during the investment cycle starting from the initial onboarding of the investor. The due diligence process ensures credibility and marks the investor as accredited. 

Accredited Investor Verification Process

The accredited investor verification service provides a complete set of investor regulations that are compulsory to be met by the client for the accreditation process. The investor is required to pass the multiple checks of verification as per law, these verification checks are:

Investor Background Verification

The background of the client is considered the core of their potential for new investments. The investor is evaluated with multiple checks of background verifications which include previous records of official funding and approvals. The background check also verifies the legal past records of the investor which can ensure a sense of security with non-criminal existence. With the consideration of investor background, the foreign client is verified by the business to participate in their investment cycles. Another perk of background verification is the surety of the investor’s future in the long run of the business. With previous business records, the new firms get an idea of the investor’s plans.

Investor Document Verification

The investor document verification process is a part of investor regulation checks to prove the identity of the investor. Documents are always considered proof of identity. On digital platforms of investments, the businesses prompt the new users to upload a set of complete legal documentation to verify their identity by evaluating the information present in the documents. Mostly, the financial and previous business records are required for this process of document verification.

Investor Biometric Validation and Verification

Biometrics is now a part of every digital platform as they provide an extra layer of security for the users and play an important role in preventing identity thefts and crimes. With biometric verification, the user is prompted to verify their identity with biometric recognition i.e. in most cases fingerprints and face scans the user. By getting the biometric information of the user the system first validates the biometrics by checking any signs of manipulation or forgery which the attackers mostly use in image recognition. With improved 3D image recognition systems deployed in modern-day platforms, this issue is also completely resolved. The user is then verified to continue access to the investment funding procedure.

Conclusion

With so many opportunities for businesses and clients in the digital trading and investment platforms, major attacking tools and technologies are also being used by the attackers nowadays to affect these platforms by stealing investors’ identities to launder money. The investor due diligence process carries an important role in the field of identity verification and security. The due diligence process marks the investor accredited which ensures the security and credibility of the investment platform.