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A key way for businesses to reduce loss and maintain strong business relationships is with risk mitigation. What is risk mitigation? Risk mitigation is when a business, whether it’s financial services, a corporation, or another industry altogether, implements policies and procedures that reduce the likelihood of risky situations occurring and decrease the severity of negative impacts if they do occur. In some cases, businesses must implement risk mitigation policies in order to maintain compliance with laws or other regulations.
Risk mitigation strategies can take on a number of different forms and may pertain to customers, vendors, third-parties, and employees, but they all have one thing in common — you need the right risk mitigation tools to be able to implement effective strategies across your entire business. Here’s the best risk mitigation tools and techniques to use in your own business.
Identity verification as one of the best risk mitigation tools
All businesses want to be sure that the people they’re working with and providing services to are who they say they are, especially in a business in which you’re transmitting sensitive information, such as in law enforcement, government, healthcare, and insurance. Otherwise, you expose yourself to fraud, potential lawsuits if information gets into the wrong person’s hands, scammers, or government fines and other legal consequences. To help reduce the likelihood of a risk situation like this occurring, you can perform identity verification using a public and private records database.
What is ID verification? Identity verification is when you verify a person’s identity by matching information they provide to you, like name or phone number, with other records, such as address history, information from multiple credit bureaus, utility listings data, or something else. The right public and private records database will link data so you can quickly verify identities and mitigate risk. For example, if you’re an insurance provider or healthcare provider transmitting health information, you should perform identity verification to mitigate the risk of the information being transmitted to the wrong person — helping ensure you don’t get into any trouble and reducing your liability if something does happen.
With the right identity verification tools, you can integrate quick identity verification into your onboarding process and ensure everyone involved in your business is who they say they are.
- Identity verification is one of the best ways to prevent fraud and ensure that information is being sent to the right people.
- When you perform ID verification, you can reduce your liability if a situation like fraud does occur later on.
- Identity verification services like Tracers can take information someone provides, like a name or address, and match it against other records to quickly confirm its accuracy.
Watchlist screening for risk mitigation
Many businesses have to follow specific regulations around who they can or cannot provide services to in order to maintain compliance, or you may want to avoid specific groups in order to reduce the likelihood of someone involved in your business committing a financial or other type of crime. Whether you want to maintain compliance or just want to do your basic due diligence, you can perform watchlist screening with a public and private records database. Watchlist screening can screen global watchlists, which are watchlists of people tied to or suspected of terrorism, as well as other criminal watchlists.
Watchlist screening helps ensure you’re only doing business with people you’re allowed to do business with, as well as reduces your overall risk of crime. When you use watchlist screening to help keep your company and all of its players safe, you’ll build a reputation for being a safer company and will facilitate stronger relationships with everyone involved in your company.
- Businesses may need to screen watchlists in order to maintain compliance with certain regulations, such as Know Your Customer (KYC) and AML regulations.
- Even if you don’t need to maintain compliance with these regulations, screening watchlists is helpful for performing due diligence and mitigating the risk of crime.
- Using watchlist screening as a risk mitigation technique will help protect your business and all of the people in it.
Due diligence and ongoing monitoring risk mitigation tools and techniques
While most companies gather at least some information about their employees, customers, vendors, and other third-parties, gathering comprehensive information can be tedious if you don’t have the right tools. However, the more information you have about your customers, employees, vendors, and third-parties, the more informed decisions you’ll be able to make about how to best interact with them and which relationships to maintain a careful view on.
With a public and private records database, you can perform a comprehensive background investigation on everyone involved in your company by gathering information on criminal records, bankruptcy records, tax liens, civil judgments, and more to perform customer due diligenc cdd and vendor risk assessment. When you perform due diligence and risk assessment by gathering comprehensive information, you’ll be able to pinpoint high-level risks and keep a more strict eye on them.
Ongoing monitoring also helps you avoid risky relationships and better address any risk that occurs by continuously ensuring you understand the people involved in your company, even as situations change. With a public and private records database, you can automate notifications for when something of concern arises so you can handle that issue accordingly, such as if there is evidence a person is committing a financial crime like fraud.
When you perform ongoing monitoring, you’re continuously maintaining a careful eye on everyone involved in your business and mitigating risk across the entire business relationship — from the beginning to the end. When people feel safe in your business at every stage, you’ll build stronger relationships and open up the door to more opportunities.
- Gathering information on criminal history, debts, bankruptcies, and business credit can help you identify risky business relationships so you can maintain a closer eye on them.
- For the most effective risk mitigation, you should also perform ongoing monitoring to stay aware of any changes in a party’s situation that could pose a threat to your company.
- With Tracers comprehensive people search and ongoing monitoring tools, you can mitigate risks in your business relationships from beginning to end.
If you’re interested in using a public and private records database to perform easier and more effective risk mitigation, get started with Tracers today.