The real estate and property dealership industry has become the center of attraction for regular buyers and investors who aim to purchase properties as a means of earning. However, it also serves as a golden opportunity for potential financial criminals to hide their illicit wealth under the guise of property investment.
Such individuals are usually prominent personalities, like public office holders, and are suspected of corruption and bribery. They conceal the illegitimate funds by laundering them through property ownership abroad. Hence, global real estate agencies must ensure a transparent KYC process. They should utilize AI-backed tools, such as ICR software, to verify clients’ documents and achieve anti-money laundering compliance.
Authenticating customers’ documents is the first step in the KYC process, which aids in complying with AML/CFT laws. The real estate sector has used manual methods to perform this process for identity verification for decades.
Consequently, they have lost billions of dollars in extracting data from customers’ documents without using technological solutions. Additionally, manual methods depend upon human efforts and, thus, can face possible errors.
This is how they become an impediment in complying with AML regulations. On the contrary, automated character recognition tools, such as OCR/ICR software, have emerged as a digital solution to retrieve data using artificial intelligence and machine learning. As per an estimate, manual data extraction methods will be reduced to half by 2024 because of their replacement by character recognition software.
Several published pieces of information emphasize that digital ICR/OCR software continues to replace outdated manual techniques in every sector. It is becoming every organization’s need for efficient document extraction.
Furthermore, OCR/ICR is a revolutionizing solution for real estate firms as they deal with many documents daily. It renders them much convenience in document assortment. The OCR/ICR technology performs its task by extracting information from a particular identity document and converting it into editable content.
The primary objective of OCR and ICR software is to verify whether the client holds a legitimate identity with legal documents. Moreover, it enables you to identify imposters, corrupt entities, and potential money launderers that might purchase a property through your real estate firm. Therefore, ICR/OCR solutions enable prompt KYC processes and ensure that the estate industry adheres to financial regulations coherently.
It is essential to know the fundamental differences between the OCR and ICR software. OCR stands for optical character recognition and is the primary software for data extraction. It is a simple yet efficient technology that scans and detects the characters of a document, be it letters or numbers, and converts them into machine-readable content.
However, it may not work as efficiently with type-written documents with different layouts and handwritten ones. Therefore, ICR software was devised as an upgrade of OCR. It stands for intelligent character recognition, and the name indicates its state-of-the-art deep learning capabilities powered by artificial intelligence. ICR software can seamlessly read handwritten documents and convert them into editable data.
ICR software has several uses, as listed below.
- It can be used for automatic and quick data retrieval from various document types, including customers’ government-issued identity proofs.
- It aids in detecting any anomaly in the document, such as spelling errors or font changes, thus, indicating a fake or forged document.
- The character recognition software ICR saves plenty of time, cost and effort because it is fully automated and does not require human assistance for data extraction during the Kyc process.
- It also eliminates any chances of error that may occur due to entering data manually.
- Moreover, its accuracy and efficiency boost the process of property dealing.
ICR recognition software gives the real estate sector the most prominent and critical advantage. It is the first step in ensuring that the onboarded clients hold legal identities with no record of financial crime.
Firstly, the document’s data is extracted through ICR software. It is then compared and matched with the official records to check if the details provided by them are authentic. Next, perpetual or ongoing KYC is performed, which continues at regular intervals after the initial customer onboarding process.
The customer’s profile is monitored and checked against various regulatory lists, such as those containing the names of sanctioned individuals and states. Similarly, the details are verified against the list of politically exposed persons.
They refer to individuals with an influential political status who abuse their authority by getting involved in financial malpractices like corruption and money laundering. Hence, it can be concluded that ICR software aids the overall customer verification process and lends convenience to the real estate industry in AML/CFT compliance.
ICR software has transformed the document verification process by enhancing its precision and is equally significant for the real estate sector.