Know Your Investor Systems: Modernizing the Investor Onboarding Process for Fraud Prevention

Know your investor

In present times, the investment sector faces various challenges with respect to the investor registration process. For the purpose of securing investments, the initial onboarding process is essential as it makes or breaks the deal. In case an organization does not opt for an intelligent digital solution, it communicates irresponsibility and lack of care, demotivating the new investing parties. Perpetrators use various techniques to take advantage of loopholes in security protocols. In this light, the investment industry must opt for a robust know your investor system to protect the assets of potential entities. Thereupon, the application of intelligent solutions facilitates abiding by the KYC/AML requirements easily.

Working Mechanism Supporting the Investor Validation Service

The KYI process can vary depending on the jurisdictions and various regions. The whole procedure is the following:


  • The smart solutions help the investing entities to provide their government-issued records in front of a digital camera for completing the validation procedure
  • The AI-powered OCR solutions also execute real-time data extraction on genuine records and instantly categorize them in the industry’s data servers
  • Know your investor systems also cross-evaluate the entities’ IDs against official lists quickly. The main purpose behind the step is to discourage high-risk parties from entering the system and also evaluate risk with their profile
  • At the end of the procedure, know your investor solutions display the final validation output to users

Suitable Records for the Investor Verification Service 

For completing KYI procedure, the following are some acceptable records. Various countries have different templates that can be problematic. Nonetheless, the combination of Artificial Intelligence (AI) with KYI solutions allows the software to process templates correctly. The implementation of artificial intelligence & machine learning models generates high-quality output. The use of Artificial Neural Networks (ANNs) in AI empowers the software to process vast volumes of data quickly.


  • Supply of official records from all the stakeholders
  • Requested data for the association
  • Proof of Address (POA)
  • Government-issued ID documentation
  • Directors’ Data
  • Critical financial details
  • Proof of Validation

Two Methods for Using Know Your Investor Services

Identity Verification With the Help of Money Laundering Reporting Officers (MLROs)

Business owners should not worry because compliance professionals will validate the parties’ IDs by verifying their government-issued documentation.

ID Authentication With the Support of a Personal Team

This technique provides complete control over investing parties’ information via the traditional approach. In this regard, the verified vendors will obtain desired information and required records and secure data in organisation’s back office.

Suitable Parties for KYI Services

In the following are appropriate entities that can opt for the know your investor services.


  • Shareholders of the associated companies
  • Private Equity Firms (PEFs)
  • Directors 
  • High profile clients

Promoting Quality in the KYI Procedure

Organizations and investing parties that want to experience the Know Your Investor services must perform comprehensive research to make an educated decision. The following three factors must be present in all the solutions.


  • High Reliability
  • State-of-the-art security
  • Top-notch confidentiality


The factors mentioned above are critical for data protection. If perpetrators get the chance to steal important data because of the loopholes in defense mechanisms, it will damage the organization’s reputation and incur a financial loss for the concerned entities.


As per the latest Shufti Pro news, perpetrators want to exploit outdated systems for their nefarious financial objectives. For instance, cybercriminals implement the chargeback scam approach to take advantage of the institutions. Additionally, with the support of Shufti Pro funding, firms are improving their systems to extend advanced solutions to their users.

The Contribution of the Securities Exchange Commission Act (SEC)

Investing parties must perform in-depth research before making an investment decision. Combating terrorism financing and money laundering incidents is crucial in modern times. The following two points can help interest parties in their objectives.


  • All entities must experience the registration process and provide the desired information 


  • In accordance with SEC standards, users must submit valid information to ensure a strong relationship between all relevant parties. This is important for powerful fraud prevention

Final Words

The Know Your Investor (KYI) service can help organizations provide a secure onboarding process. Nevertheless, the problem of cyber heists from criminals will never go away. In this light, the application of AI-driven digital solutions will help enhance user satisfaction. Undoubtedly, the intelligent approach will attract genuine investing parties to come forward and collaborate with the organizations. Using Know Your Investor (KYI) systems discourage criminals from getting their hands on users’ important data. Hence, the use of intelligent systems can support firms in providing a positive experience to their customers.

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