Virtual banks must have processes in place to identify and authenticate prospective account holders but without the benefit of face-to-face interaction that traditional banks enjoy. For returning customers, virtual banks must understand digital identities – how people behave, what their devices are and the anomalies that might be fraudulent or criminal behavior.
Additionally, virtual banks must, at a minimum, understand the eight basic types of risk—credit, interest rate, market, liquidity, operational, reputation, legal and strategic risks—and put into place appropriate systems to identify, measure, monitor and control them.
Financial crime compliance and mitigation are as essential for virtual banks as they are for their brick-and-mortar counterparts. The stakes are high and rapidly increasing, given the speed at which the virtual banking sector is advancing.
Want to know more? Read the LexisNexis® Risk Solutions’ white paper, “Risk Management in Focus for Virtual Banks.“