In today’s world, small and new businesses are emerging in the marketplace now and then. Startups are always in need of investments, however, they can not leave Know Your Investor (KYI) behind. Mainly because regulatory authorities are putting forth various strict regulations regarding the increase in financial crimes. As per Napier, global financial crimes lead to a total of $9.95 billion in fines. Therefore, businesses of all types need investor verification services to minimize the chances of criminal threats.
For this, SaaS providers are offering automated Know Your Investor services to help startups and corporate firms to register potential investors. This way, companies can mitigate the unforeseen threat while identifying investors beforehand. The automated solutions are robust and involve fewer chances of human error and other inaccuracies. These help companies to pick out their desired investor from the variety of them. The blog further covers the methods that help businesses improve the partnering process.
Investor Verification Services – Helping Firms to Pick Out the Potential Entities
There are various types of investors available in the market and to make sure what businesses require they need online investor verification. Some investors are most attracted to startups while others are less likely to risk their money. More detailed insight into the types of investors is underneath:
- Entities with Self-goals – Personal Investors
Business owners who have just entered the marketplace commonly ask their peers, relatives, or friends for their initial investments. These entities are terms as personal investors. However, businesses should first seek expert advice because the investor can be partnering for just self-goals. This will cause consequences in the longer run. Also, companies should verify investors and validate documents before signing a contract.
- Wealthy Private Entities – Angel Investors
Angel investors are the entities that have to satisfy certain requirements. These include that the investor should hold an annual worth of over $1 million. Angel investors are more attracted to the startups because they might generate high revenue.
- Huge Investing Firms – Banks and Financial Institutions
Banks and other related firms are the oldest, classic, and most common source of financial help. Moreover, these are considered safe because they satisfy all the regulatory protocols and involve fewer risks of loss.
- Monetary Giants – Venture Capitalists
Venture capitalists are defined as the entities that hold a huge wealth and provide high chances of growth. However, they put in their money in exchange for a defined share and they take a sizable amount but they are investing as such. Businesses should adopt Know Your Investor services to ensure they are pitching to the right capitalist. Thesis because the money once gone is not coming back and in the case of ventures the amount is significant.
- Matching Lenders with Borrowers – Peer-to-Peer Moneygivers
Peer-to-peer entities are either singular investors or a group of them that help startups and small businesses to uplift their status. As per Shufti Pro News, companies suffer huge financial losses if they lack authentic verification checks. This is mainly because peer-to-peer lenders are the middlemen and not all of them are legit.
How Can Corporate Firms and Companies Enhance their Operations?
Businesses do not necessarily have the knowledge for investor onboarding and on the run, experience various things. In some cases, they retain the investors while in others they face dropoffs. Startups especially are less likely to partner with a new investor over and over again. Therefore, companies should enhance and upgrade their investor onboarding process by making the following changes. This way they ensure positive investors’ experience, customer satisfaction, and long-term simultaneous growth.
Automate the Verification and Registration Process
The first in line is to upgrade the process from manual to digital. The online partnering and verification process is seamless and user-friendly which leaves no loopholes. Also, if the businesses want to develop active communication, transparency, and simplification, digitization is their first step.
Online investor verification services increase the workflow while reducing the chances of errors and inaccuracies. This is because the system uses various improved technologies. For instance, OCR for data extraction, ML for validations, and AI for accuracy and reducing time span.
Active Communication and Constant Reporting
Communication is a foremost crucial step in building a long-term and reliable investor-to-company relationship. Businesses should communicate the changes within policies, strategies, and implementation procedures to make sure the investor is not left behind. Otherwise, the investor will most probably leave. Maintaining active communication not only prevents unforeseen consequences but also ensures that the partnership will last long.
Bring Simplification to the Process
As per Shufti Pro Funding, companies are readily vesting their trust in digital Know Your Investor verification solutions. This is because it simplifies the verification by providing options like auto-fill and instant validation. Investors do not prefer processes that are extensive and ask for information repeatedly.
