July 2025

Background Checks

Benefits Of Automated Employee Onboarding With AI

There’s an uncomfortable truth every HR leader knows but rarely admits openly: the quality of your employee onboarding sets the tone for everything that follows. You can invest heavily in attracting top talent, run sophisticated recruitment campaigns, craft compelling job descriptions, and build an impeccable employer brand, but if the onboarding experience falls flat, that hard-won talent can quickly drift away.

Employee onboarding is an experience that shapes an employee’s perception of their new organisation. When done well, it makes new joiners feel valued, seen, and genuinely welcomed, increasing their chances of staying engaged and committed over the long term. But when done poorly, it leads to disengagement, lost productivity, and costly early attrition.

New hires, particularly Gen Z, come with higher expectations. They expect personalised communication, smooth digital experiences, and meaningful interactions from the very moment they accept the offer. An outdated, manual onboarding process filled with redundant paperwork, inconsistent communications, and unnecessary delays can drive them out the door before they’ve even settled in.

Research consistently supports what seasoned HR leaders have long recognised: good onboarding pays off. Studies suggest that companies with a thoughtful onboarding approach experience a 60% increase in employee productivity. In comparison, another research study reveals a 50% improvement in retention among new hires who have a positive onboarding experience. Simply put, getting onboarding right is business critical.

Now, with remote and hybrid workplaces becoming increasingly preferred, HR teams face a lot more challenges. Managing consistent onboarding experiences across various locations and time zones has become a logistical headache, particularly when relying on manual processes. The pre-onboarding stage, beginning right from the moment a candidate accepts an offer, often sets the tone. A delay in paperwork, a missed communication, or a cumbersome background check can quickly erase the initial excitement and trust a candidate had in the company.

This is precisely where many industries, like Fintech, IT services, and Healthcare, have turned to artificial intelligence (AI)-powered onboarding. These solutions are about enhancing the human element in HR. By automating administrative tasks, streamlining compliance, personalising communications, and proactively identifying issues, AI-powered onboarding enables HR professionals to focus on building relationships, nurturing talent, and reinforcing company culture.

The question for HR leaders is how long they can afford to stick with processes that no longer serve their people or their organisations. As competition for talent heats up and employee expectations rise, embracing AI-powered onboarding is quickly becoming essential.

What Is AI-Powered Automated Employee Onboarding?

AI-powered onboarding is a smarter way for HR teams to manage the entire onboarding journey, from the moment a candidate applies for the job, right through their early weeks on the job. It uses automation, data-driven insights, and intelligent digital tools to streamline processes, reduce manual workloads, and enhance the new-hire experience.

Unlike traditional onboarding, AI-driven onboarding integrates seamlessly with your existing HR tech stack, beginning right from your Applicant Tracking System (ATS).

Starting With The ATS

Modern onboarding begins even before the employee’s official first day, right at the recruitment stage. AI-enabled ATS platforms quickly identify top candidates based on criteria such as experience, skill set, cultural fit, and hiring manager preferences. From here, AI can automatically move successful candidates into pre-onboarding workflows, dramatically reducing turnaround time (TAT) from job acceptance to actual start date.

Pre-onboarding Efficiency

As soon as a candidate is sent/accepts an offer, AI-powered platforms trigger automated workflows for critical tasks such as background verification, identity checks, and paperwork completion. Documents like employment agreements, tax forms, and compliance acknowledgements are automatically dispatched, digitally signed, and securely stored, often within hours (in certain cases, instantly) rather than days. This means HR no longer needs to chase down documents manually or risk candidates disengaging due to delays.

Real-Time Communication and Support

AI-powered chatbots or virtual assistants answer candidate queries immediately, whether related to company policies, benefits, or technical setup. This instant communication eliminates delays, enhances candidate confidence, and significantly reduces drop-off rates before day one.

Intelligent Task Management

Once onboard, AI continues to manage tasks, nudging both new hires and managers to complete crucial activities. HR gains visibility through real-time dashboards highlighting onboarding progress and potential bottlenecks, allowing them to proactively address issues rather than reacting too late.

Predictive Analytics For Early Intervention

AI-driven analytics can track early indicators of disengagement, flagging potential issues such as incomplete training modules or delayed interactions. This insight allows HR professionals to step in early and ensure new hires receive the support needed for a successful start.

Features Of AI-Powered Employee Onboarding

Today’s AI-driven onboarding solutions offer HR professionals intelligent, adaptive capabilities that simplify onboarding processes, create personalised employee experiences, and deliver measurable business outcomes.

Automated Document And Compliance Management

Onboarding involves extensive paperwork, from employment contracts and tax documents to mandatory policy acknowledgements and right-to-work verifications. AI-powered onboarding systems automate this entire documentation process, significantly reducing manual effort and errors. Documents are instantly dispatched, digitally signed, securely stored, and automatically verified, ensuring regulatory compliance and greatly reducing administrative turnaround times (TAT).

Personalised Learning Paths And Training Modules

Every employee has unique skills, experience, and learning preferences. AI-driven onboarding platforms create adaptive training programmes tailored specifically to each new hire’s role, skill level, and individual learning style. By analysing employee interactions, AI intelligently recommends relevant training content, videos, and modules, cutting training completion time and making onboarding engaging rather than overwhelming.

AI-Powered Virtual Assistants (Chatbots)

New hires often have immediate, practical questions, whether about workplace policies, technology setup, or onboarding logistics. AI-powered virtual assistants provide instant, accurate answers around the clock, delivering timely support without adding workload for HR teams. This consistent, responsive interaction enhances the new-hire experience, reduces confusion, and builds trust from day one.

Real-Time Engagement And Feedback Analytics

One major challenge in traditional onboarding is knowing how new hires truly feel about their early experiences. AI-driven analytics capture real-time data on employee engagement, training progress, and onboarding satisfaction. Dashboards provide HR teams with clear visibility of each employee’s journey, helping them proactively address issues before they become serious concerns or contribute to early turnover.

Predictive Analytics And Data-Driven Insights

Predictive analytics within AI-powered onboarding tools identify patterns and early warning signs of employee disengagement. For instance, if a new hire’s interaction or progress suddenly slows, HR teams receive immediate notifications, allowing them to provide personalised interventions early enough to prevent disengagement or attrition.

Scalable And Flexible Onboarding Processes

In a hybrid or remote-first world, consistency across locations and employee groups is critical but challenging. AI onboarding tools create standardised yet adaptable onboarding workflows that easily scale with company growth or changing workplace dynamics. Whether hiring locally or globally, AI ensures that every new hire receives a consistent, engaging onboarding experience, aligning closely with the organisation’s culture and compliance requirements.

Benefits of AI-Powered Employee Onboarding For HR And Employees

AI-powered onboarding streamlines how HR teams and employees experience the critical early stages of employment. By intelligently automating administrative tasks, personalising experiences, and offering valuable insights, AI brings distinct advantages for both HR professionals and new hires.

Improved New-Hire Engagement and Retention

Onboarding is the foundation of employee engagement. AI-powered solutions personalise each employee’s experience from the very beginning, ensuring new hires feel valued, understood, and effectively supported. Studies consistently show that employees who experience meaningful onboarding are significantly more engaged, perform better, and stay longer. In short, thoughtful onboarding leads directly to higher retention and reduced attrition costs.

Reduced HR Administrative Burden

Traditional onboarding often burdens HR professionals with repetitive manual tasks, chasing paperwork, arranging logistics, and managing compliance. AI-driven onboarding automates these routine processes, reducing manual workload significantly. This allows HR teams to focus more on strategic activities such as talent development, culture-building, and employee wellness initiatives, transforming their role from administrators to strategic partners within the organisation.

Faster Time to Employee Productivity

The quicker employees settle into their roles, the faster they contribute to organisational success. AI onboarding shortens the time-to-productivity significantly, often reducing onboarding timelines by up to 50%. Through personalised learning paths, automated task assignment, and continuous real-time support, new hires rapidly gain confidence, competence, and clarity, enabling them to deliver value far sooner than traditional onboarding methods allow.

Enhanced Compliance and Reduced Risk

Compliance is critical but often complex, with numerous checks, verifications, and documentation required. Manual compliance management creates risks through oversight and human error. AI-driven onboarding platforms automate compliance workflows, ensuring thorough and consistent completion of identity checks, policy acknowledgements, right-to-work verifications, and data management. This dramatically lowers compliance risks, reduces errors, and keeps organisations prepared for audits and regulatory scrutiny.

Scalability Across Global and Remote Teams

Today’s work environment demands flexible solutions that scale easily and consistently, regardless of geography or working model. AI onboarding platforms offer a standardised yet flexible onboarding process that ensures consistent experiences for remote, hybrid, or geographically dispersed teams. HR leaders no longer need to juggle varying onboarding practices; instead, AI solutions deliver uniform quality experiences, reinforcing a cohesive organisational culture no matter where employees are located.

AI-powered onboarding positions HR teams as strategic enablers of talent success, delivering measurable, meaningful improvements in employee engagement, efficiency, compliance, and scalability.

The Human Element In AI-Powered Onboarding

Despite the power and sophistication of AI technology, effective onboarding is fundamentally human. AI, instead of diminishing this human element, amplifies it.

When AI handles the routine, repetitive administrative tasks, HR professionals are freed up to concentrate on what matters most: the people. Rather than being bogged down in paperwork or logistics, HR teams become true enablers of culture and engagement.

Organisations in sectors such as technology, financial services, and healthcare have successfully leveraged this human-AI collaboration in onboarding. They report stronger employee-manager relationships, improved cultural alignment, and increased employee satisfaction scores, direct results of strategically pairing AI efficiency with human empathy.

Guide To Implementing AI-Powered Onboarding For HR Leaders

Bringing AI into your onboarding processes doesn’t have to be complicated, but it does require thoughtful planning. Here’s a straightforward, practical guide to help HR teams successfully adopt AI-powered onboarding solutions.

Assessing Your Organisation’s Onboarding Needs

Start by clearly identifying the specific pain points in your current onboarding process. Consider aspects like administrative overload, time delays, compliance gaps, or employee disengagement. A focused assessment helps you pinpoint exactly where AI solutions can deliver the most impact.

Selecting The Right AI Onboarding Solution

Not all AI solutions are equal. When choosing a platform, prioritise ease of integration with your existing HR systems, like your ATS or HRIS. Look for solutions offering strong personalisation features, compliance automation, intuitive user interfaces, and robust analytics capabilities. User-friendly platforms ensure quicker adoption and higher engagement from employees and HR teams alike.

Overcoming Implementation Challenges

Introducing new technology often meets with initial resistance. Clearly communicate the benefits and ease of use to stakeholders upfront. Provide training sessions for your HR teams to build confidence and familiarity with the platform. Start with pilot programmes involving smaller groups, gathering feedback, and adjusting before rolling out more broadly.

Key Metrics To Track In AI-Powered Onboarding

To ensure the success of your AI-powered onboarding, track clear, meaningful metrics such as:

Reduction in onboarding turnaround time (TAT)
Improvements in employee satisfaction and engagement scores
Decreases in early employee attrition rates
HR hours saved due to reduced administrative tasks
Enhanced compliance rates and fewer audit concerns

Regularly reviewing these metrics allows HR teams to demonstrate measurable ROI and continuously improve onboarding effectiveness.

Elevate Your Onboarding Experience With AuthBridge’s AI-Powered Solution

At AuthBridge, we understand that exceptional onboarding is at the heart of employee success. Our AI-powered onboarding solution is specifically designed to streamline processes, enhance candidate experiences, and empower HR teams to build genuine connections with new hires.

Our platform seamlessly integrates with your existing HR tech stack, automating critical tasks from document management and compliance checks to personalised training pathways and real-time analytics. By reducing administrative workload, improving compliance accuracy, and delivering meaningful insights, we enable HR professionals to focus more on strategic, high-value activities.

Organisations across diverse sectors trust AuthBridge’s innovative solutions to transform their onboarding journeys, creating consistent, engaging experiences that resonate with employees from day one.

Discover how AuthBridge can help your organisation unlock the full potential of AI-powered employee onboarding:

By Abhinandan, 1 dayJuly 22, 2025 ago

Background Checks

Top 7 Social Media Screening Platforms For Background Verification

Hiring the right candidate is one of the most crucial decisions a company can make. A wrong hire not only affects productivity but can also harm your company’s reputation and team morale. Traditional background verification and hiring methods, such as interviews and CV checks, are no longer sufficient in providing a full picture of a candidate. With nearly 82% of employers using social media to hire passive candidates, it becomes important for employers to dig deeper into a candidate’s personality, professional conduct, and potential red flags on social media.

Failing to conduct a social media screening, or sometimes known as a social media background check, could be costly. Candidates are increasingly shaping their brand online, and this brand is often a reflection of their behaviour, values, and integrity. Hiring decisions based on incomplete information could expose your company to unwanted risks, such as misconduct, cultural misfit, or potential legal liabilities. According to a report, 88% of U.S. hiring managers said that they would think of firing employees for content found in their workers’ social media posts.

The key to protecting your organisation lies in understanding the hidden information that social media screening can provide.

What Is Social Media Screening For Employment?

Social media screening for employment is the process of reviewing a candidate’s or employee’s publicly available online presence across various platforms, including LinkedIn, X (formerly Twitter), Instagram, and Facebook, among others, to assess their professionalism and alignment with the company’s values. It helps identify potential risks such as inappropriate behaviour, offensive language, or affiliations that could harm the organisation’s reputation. Common checks include analysing posts, comments, interactions, and privacy settings.

Benefits Of Social Media Screening:

Improved Hiring Accuracy: Provides a deeper understanding of candidates’ behavior and values.
Risk Mitigation: Identifies potential reputational or legal risks early on.
Cultural Fit: Ensures alignment with company values and workplace standards.
Brand Protection: Safeguards the company’s image from individuals with controversial online behavior.
Enhanced Decision Making: Offers an additional layer of insight for more informed recruitment and retention strategies.

The Need For Conducting Social Media Screening

With the job market getting fiercely competitive with each passing day, overlooking social media screening is no longer optional. Here’s why:

1. Protecting Your Company’s Reputation

Every hire reflects on your organisation. A candidate’s social media presence can reveal behaviour that, while possibly overlooked during an interview, may be damaging to your company’s image if brought to light later. Inappropriate comments, offensive language, or controversial views can negatively affect public perception, potentially leading to media backlash or loss of client trust. Screening candidates’ social media profiles can help avoid these costly PR issues. As per a study, 54% of employers have eliminated candidates based on their social media feeds.

2. Uncovering Hidden Red Flags

Social media is often a candid reflection of a person’s true character. During interviews, candidates may present themselves in the best light, but their online activity can reveal things that wouldn’t otherwise come to light. Whether it’s past instances of aggression, discriminatory behaviour, or unprofessional conduct, social media screening can help uncover red flags that are crucial for making an informed hiring decision.

3. Reducing Bias in Hiring Decisions

Traditional recruitment methods can sometimes lead to biased decisions based on personal impressions or unconscious biases. Social media screening allows employers to assess candidates based on more tangible evidence, their online interactions and professional conduct. By focusing on objective criteria found in public social media posts, hiring managers can make decisions that are more aligned with a candidate’s true qualifications and cultural fit.

In a diverse country like India, where biases based on gender, caste, and background are unfortunately still prevalent, social media screening can help mitigate these biases by focusing on behaviour and online presence rather than appearance or other personal factors.

4. Preventing Workplace Misconduct

Hiring employees who fit your company culture is critical for maintaining a positive work environment. Candidates may seem like a perfect fit in an interview, but their social media activity might tell a different story. From inappropriate humour to offensive content or even signs of a combative attitude, social media screening can alert you to behavioural issues before they enter your workplace. According to a report, 73% of hiring managers have admitted that they have rejected candidates due to negative findings on social media.

5. Staying Ahead of Potential Legal Issues

In today’s world, what employees post on their social media can have legal consequences for your company. For example, past posts that are discriminatory or inflammatory can expose your business to legal risks, particularly if they are made by an employee representing your brand. By conducting social media screening, you can ensure that new hires are in line with your organisation’s legal and ethical standards, avoiding costly legal battles down the line.

Top 7 Social Media Screening Platforms

To help you conduct effective social media screening, several platforms offer services that allow employers to dig deeper into a candidate’s online presence. Here are seven key platforms, in no particular order, to consider:

1. AuthBridge

Leading the charge in background verification for 2 decades, AuthBridge offers a robust social media screening service that provides a comprehensive view of a candidate’s online behaviour. Their AI-powered tools and a field force of over 1000 personnel, analysts review social media profiles to identify red flags, assess cultural fit, and ensure alignment with company values. AuthBridge’s seamless integration with your existing background verification processes makes it a go-to choice for businesses across India.

2. HireRight

HireRight is a global background screening provider that includes social media checks as part of its comprehensive services. Their social media screening process involves reviewing publicly accessible profiles, posts, and interactions across various platforms. HireRight combines AI technology with human expertise to deliver accurate and timely reports.

3. First Advantage

First Advantage offers a suite of background screening services, including social media screening. Their platform analyses candidates’ online activities to identify potential red flags such as inappropriate content or behaviour. First Advantage emphasises compliance with legal standards and provides customizable screening options to meet specific organisational needs.

4. Global Background Screening (GBS)

Global Background Screening provides comprehensive background checks, including social media screenings. Their services help employers assess candidates’ online presence to identify any potential risks or concerns. GBS provides detailed reports that help inform hiring decisions.

5. Ferretly

Ferretly specialises in AI-powered social media screening, focusing on uncovering risk signals in candidates’ online behaviour. Their platform scans public digital footprints to detect potential issues such as bias, aggression, or misalignment with company values. Ferretly’s services are designed to enhance workplace culture and reduce turnover.

6. Neotas

Neotas offers enhanced due diligence services, including social media background checks. Their platform combines reputational checks, adverse media analysis, and social media insights to help employers uncover hidden risks and red flags. Neotas is particularly useful for high-risk onboarding and executive vetting.

7. HiPeople

HiPeople provides AI-driven screening tools, including social media checks, to streamline the hiring process. Their platform analyses candidates’ online presence to assess cultural fit and identify potential concerns. HiPeople emphasises ethical AI applications and integrates seamlessly with applicant tracking systems.

Conclusion

By conducting thorough social media checks, companies can ensure that they are hiring candidates who not only have the right skills but also the right character and values. The risk of not doing so could be far greater than the time and resources spent on the screening process. Protect your business, your reputation, and your team by embracing social media screening as an essential part of your hiring strategy.

By Abhinandan, 1 weekJuly 15, 2025 ago

Blogs

Why Verify GST Returns & Bank Statements In Third-Party Onboarding?

Introduction

Onboarding third-party vendors, suppliers, or distributors is an important aspect of business operations, particularly in sectors such as e-commerce, manufacturing, and retail. As a business expands its supply chain or distribution network, ensuring that these third parties comply with all financial and regulatory requirements becomes a thing of extreme importance.

Verifying GST returns and bank statements during the onboarding process plays a key role in mitigating financial risks and ensuring business integrity. These documents not only help in verifying the third party’s legitimacy but also ensure compliance with national regulations.

Understanding GST Returns

What are GST Returns?

GST returns are filed by businesses to report their sales, purchases, tax collected, and tax paid to the government under the Goods and Services Tax (GST) Act in India. There are different types of GST returns, each serving a specific purpose:

GSTR-1: Reports all outward supplies (sales).
GSTR-3B: A summary return filed monthly or quarterly, reporting tax liability and paid taxes.
GSTR-9: An annual return consolidating all transactions during the year.
GSTR-2A/2B: A self-generated return reflecting purchases and input tax credits available.

Why Verifying GST Returns Is Crucial During Onboarding

Tax Compliance Check: Verifying a third party’s GST returns ensures that they are fulfilling their tax obligations.
Input Tax Credit (ITC) Verification: By examining the GST returns, businesses can verify whether a third party is eligible for input tax credits, which can have a direct impact on the cost structure, especially in B2B transactions.
Identifying Non-Compliance Risks: Non-compliant vendors or suppliers might have discrepancies in their GST filings. Verifying GST returns helps identify any potential tax evasion or fraud.

For example, a manufacturing unit may onboard a new supplier. Verifying the supplier’s GST returns ensures that the supplier is adhering to tax laws, which ultimately impacts the pricing and credit claims for the buyer. If the supplier is not compliant, the buyer could face penalties or loss of input tax credits.

What Are Bank Statements?

A bank statement is a detailed record of all financial transactions that have taken place in a company’s bank account during a given period. This document lists both incoming and outgoing payments, including transactions with clients, suppliers, and employees.

Key Components Of A Bank Statement:

Deposits (Receipts): Payments received from customers or other sources.
Withdrawals (Expenditures): Payments made to suppliers, employees, or for other business expenses.
Closing Balance: The final balance in the account at the end of the period.

Why Verifying Bank Statements Is A Must In Third-Party Onboarding:

Financial Health Assessment: By verifying bank statements, businesses can assess the financial stability of their vendors or suppliers. A supplier who regularly faces overdraft charges or delayed payments may indicate financial instability.
Tracking Transaction Accuracy: Verifying bank statements ensures that the payments made to vendors match the amounts invoiced. Discrepancies here may highlight potential fraud or operational inefficiencies.
Ensuring Authenticity: Third-party vendors or suppliers who cannot provide clean, consistent bank statements may indicate that their financial operations are not well-managed, posing a risk to business relationships.

For example, a logistics company onboarding a new distribution partner can verify the partner’s bank statements to ensure that the partner’s financial transactions are transparent and the payment history aligns with the company’s invoicing practices. Discrepancies here could be a red flag for potential payment issues or financial instability.

GST Returns vs Bank Statements: Key Differences And Similarities

Aspect	GST Returns	Bank Statements
Purpose	Verifies tax compliance and eligibility for input tax credits	Reflects the actual flow of cash, demonstrating financial health
Frequency	Monthly/Quarterly/Annually (depends on the type of return)	Typically monthly
Issued By	Government of India (GST portal)	Banks or financial institutions
Data Reflected	Sales, purchases, tax collected and paid	Deposits, withdrawals, bank charges, balances
Legal Requirement	Mandatory for businesses registered under GST	Not mandatory, but essential for business financial health
Key Insights	Tax liabilities, GST credits, tax paid	Cash flow, financial stability, and payment history

Why Verifying GST Returns & Bank Statements Is Important For Compliance

Compliance is at the heart of successful third-party onboarding, especially in India, where regulations are strict, and penalties for non-compliance can be very harsh.

Preventing Fraud and Evasion: Both GST returns and bank statements help identify discrepancies that could point to fraudulent activity, such as incorrect reporting of tax liabilities or irregular financial transactions.
Ensuring Transparency and Integrity: When businesses verify both GST returns and bank statements, they ensure the third-party vendor or supplier is operating within legal frameworks. This reduces the likelihood of engaging with entities involved in tax evasion or financial misconduct.
Minimising Risk in the Supply Chain: By conducting a thorough verification process, businesses can minimise risks in their supply chain, ensuring they are not unknowingly partnering with unreliable or non-compliant entities.

How Third-Party Onboarders Can Leverage GST And Bank Statement Verification

Third-party onboarding professionals in India can use these verification processes to ensure that vendors, suppliers, or distributors meet the required standards of financial and tax compliance.

Step 1: Collect GST Returns and Bank Statements:
Ensure that all third-party vendors provide these key documents, ensuring they are complete, accurate, and up-to-date.
Step 2: Cross-Check GST Returns for Compliance:
Verify the GST registration status, check for matching sales and purchases, and ensure the vendor has paid the required taxes.
Step 3: Examine Bank Statements for Financial Stability:
Look for consistent payments and receipts, and confirm there are no major discrepancies or signs of financial mismanagement.
Step 4: Conduct Risk Assessment:
Using these documents, perform a risk assessment to determine the financial and operational health of the third party.

Conclusion

In India, verifying GST returns and bank statements is not just about adhering to tax regulations. It is a key practice to ensure that the third-party vendors, suppliers, or distributors you onboard are financially stable, trustworthy, and compliant with the law. This process significantly reduces the risk of fraud, tax evasion, and financial instability that can lead to reputational damage or operational disruptions.

For businesses looking to onboard third parties in India, the importance of these documents cannot be overstated. They play a critical role in protecting the integrity of your supply chain and ensuring your compliance with India’s ever-evolving regulatory landscape.

By Abhinandan, 2 weeksJuly 10, 2025 ago

BFSI

The Impact Of AI In Bank Statement Analysis

The Importance Of Bank Statement Analysis

Have you wondered how important your Bank Statement can be? You can learn a lot about someone/a company by looking at their bank statement. It doesn’t just show how much they earn or what they spend, it quietly reveals patterns of trustworthiness, financial strain, lifestyle choices, and even integrity.

For lenders, insurers, gig platforms, and credit underwriting teams, this document has become one of the most valuable pieces of critical decision-making.

But here’s the problem. No two bank statements look the same. Some are downloaded as polished PDFs. Others arrive as scans, screenshots, or even photos taken in a hurry. They’re filled with acronyms, bank codes, fee entries, bounced transactions, and sometimes, clever manipulation. Reviewing these manually is tedious and inconsistent. And it breaks under pressure when you’re trying to process hundreds or thousands of applications a day.

This is where Artificial Intelligence (AI) has quietly made an impact like never before.

AI can read any format, in any layout, and turn it into clean, structured data. But more importantly, it makes sense of that data. It finds anomalies that a human might miss. It learns over time and spots signs of tampering, synthetic salaries, or income that doesn’t match the furnished information.

And it does all this in seconds.

If your business depends on knowing who to trust, whether you’re lending ₹10,000 or over ₹10 crore, then understanding how AI handles bank statement analysis is indispensable.

How AI Understands Bank Statements Like A Risk Analyst Would

A bank statement, when read correctly, is not just a ledger of deposits and withdrawals. It is a behavioural data set that shows financial discipline, income reliability, exposure to debt, and potential red flags. For decades, skilled underwriters have relied on their intuition to extract these insights. The challenge now is to do it at scale, without compromising judgment and accurate decision making.

Artificial Intelligence enables precisely that, by replicating how experienced analysts read statements.

The first layer of interpretation begins with data structuring. AI uses computer vision and contextual learning to convert unstructured statements into standardised tables, regardless of format or source. But beyond parsing, the important bit lies in identifying what the numbers mean.

AI models trained on financial behaviour can:

Identify whether an inflow is salary, a loan, or a one-time deposit.
Map EMI deductions to outstanding liabilities.
Quantify net monthly surplus or deficit.
Detect anomalies such as sudden spikes in income, altered balances, or round-tripped transactions.

It does this not by keyword detection, but by assessing transaction frequency, narrative context, metadata, and long-term balance trends. Income validation, bounce history, recurring obligations, and financial stress indicators can all be extracted within seconds, without requiring human intervention.

What makes this useful is not just accuracy, but consistency. Every profile is assessed using the same logic, removing subjectivity and reducing error rates. This standardisation becomes crucial for lenders, especially in unsecured credit, where traditional credit scores fall short.

The strength of AI is not that it reads faster, but that it reads comprehensively. It ensures that every entry is considered, every inconsistency is flagged, and every applicant is assessed based on actual financial behaviour.

Where AI-Based Bank Statement Analysis Delivers The Most Impact

AI in bank statement analysis solves core business problems that financial institutions have struggled with for years. These include delayed decisions, operational bottlenecks, poor visibility into risk, and exposure to manipulated data.

The impact is the highest in cases where accuracy, speed, and scale are extremely important.

1. Lending and Credit Risk Assessment

For lenders, particularly those dealing in unsecured or short-term credit, there is a non-negotiable need for high reliability of stated income and repayment behaviour. AI enables lenders to check not just credit scores, but also get access to more nuanced, real-time insights from transactional behaviour.

A few key benefits:

Income classification: AI identifies regular salary credits, freelance income, or inconsistent gig payments across banks and formats.
EMI tracking: Ongoing loan commitments, including informal borrowings, are mapped against net disposable income.
Bounce and penalty detection: AI highlights dishonoured cheques or insufficient balance incidents, often missed in manual reviews.
Cash flow profiling: Monthly surplus, deficit, and balance trends are charted to evaluate repayment capacity more reliably than stated income.

2. Fraud Detection and Document Forensics

Tampering with bank statements is a common problem, particularly in areas where PDF uploads are accepted without source verification. AI-led systems are trained to detect:

Inconsistent fonts, spacing, or layout shifts that point to edits
Metadata mismatches or file generation anomalies
Repeated transaction IDs or misaligned account balance flows

Not only does AI highlight document-level manipulation, it also detects synthetic behaviour patterns, like inflated one-time credits to fake a high income or backdated entries to mimic salary history. This layer of intelligence allows fraud teams to act earlier, with stronger audit trails and fewer false positives.

3. Gig Economy and Blue-Collar Underwriting

In segments like logistics, delivery, and home services, traditional documents like Form 16 or credit bureau scores don’t exist or are outdated. Bank statements become the only reliable source of verification.

AI systems trained on these patterns can:

Read salary-like credits from platforms such as Swiggy, Zomato, or Ola
Assess income regularity even in cash-heavy or high-churn environments
Create risk bands based on observed transactional hygiene, not just KYC data

This expands the pool of underwritable applicants and supports financial inclusion at scale, without compromising on risk visibility.

4. SME and Self-Employed Profiles

For small business owners or self-employed individuals, balance sheets are often unavailable or unaudited. Here, AI-analysed bank statements function as cash flow statements, providing insights into:

Revenue streams
Seasonal income fluctuations
Vendor payments
Tax payments and GST-related outflows

This is especially valuable for NBFCs and digital lenders operating in Tier 2 and 3 cities, where documentation is limited, and credit demand is high.

Advantages Of AI Bank Statement Analyser

In lending, risk management, and compliance, time and accuracy are everything. For decades, financial institutions have relied on manual processes to sift through bank statements, identify risks, and make key decisions. The problem, however, is that this method doesn’t scale, and it misses valuable data that could be used to make more informed, faster decisions.

This is where AI comes in handy.

Speed and Scalability Without Sacrificing Quality

As businesses scale, so do the demands on their underwriting teams. Processing bank statements manually can be time-consuming, often requiring multiple staff members to cross-check the same information. AI removes these bottlenecks. It can process thousands of bank statements at once, maintaining accuracy and consistency in every document.

This level of efficiency means faster decision-making, which is crucial when dealing with high volumes, such as during loan approvals, credit risk assessments, or compliance verifications. What might have taken hours with a manual team can now be achieved in minutes, without compromising on quality.

Improved Accuracy and Reduced Human Error

The complexity and variability of bank statements can make them prone to human error. Whether it’s an overlooked transaction, an incorrectly flagged anomaly, or an unreadable entry, these mistakes can lead to significant issues down the line.

AI in bank statement analysis mitigates these risks by being objectively consistent. It processes every statement using the same parameters, applying rigorous algorithms to detect inconsistencies, potential fraud, or unusual patterns that might otherwise be missed. For financial institutions, this reduces risk by increasing the accuracy of each analysis, which is particularly crucial when evaluating creditworthiness or assessing exposure.

Enhanced Risk Detection and Fraud Prevention

In today’s fast-moving digital landscape, fraud is evolving rapidly. Manipulated bank statements are one of the most common methods of fraud, especially when it comes to synthetic identities or artificially inflated incomes.

AI detects these discrepancies by analysing every aspect of the statement, from the metadata and formatting of the document to the transactional patterns. The ability to spot discrepancies, even subtle ones, ensures early detection of fraud before it escalates. This is invaluable in a landscape where preventing fraud before it happens is far more cost-effective than trying to recover losses afterwards.

Building Smarter, More Inclusive Credit Models

AI doesn’t just assess risk based on traditional financial indicators, such as credit scores or reported income. It also considers behavioural signals, such as spending patterns, cash flow cycles, and payment history, to build a more nuanced understanding of an individual’s or business’s financial health. This is particularly beneficial for underserved segments, such as gig workers or small businesses, who may not have access to traditional forms of credit reporting.

By incorporating these behavioural insights, AI enables businesses to make better, more informed lending decisions, even for individuals without a traditional credit history.

Get Faster, Smarter, and Accurate AI-powered Bank Statement Analysis With AuthBridge

The benefits of AI in bank statement analysis are undeniable. From improving decision-making speed to enhancing accuracy and detecting fraud, it’s clear that this technology is transforming how financial institutions handle large volumes of complex documents. However, the real challenge lies in implementing this technology effectively and ensuring it integrates seamlessly into your existing workflows.

At AuthBridge, we’ve developed a powerful AI-driven solution that takes the complexity out of bank statement analysis. Our tool parses data from the documents, providing financial institutions with deep insights and actionable data. Our solution enables smarter, faster decisions that drive business growth while reducing operational costs.

Key Features of AuthBridge’s Bank Statement Analyser:

High Accuracy & Precision: We ensure that every detail of a bank statement is captured and analysed correctly, eliminating human error and improving data integrity.
Customisable & Scalable: Whether you’re handling 10 statements or 10,000, our solution scales effortlessly, offering custom configurations to fit your unique business requirements.
Fraud Detection: Detects inconsistencies, metadata mismatches, and suspicious patterns that indicate potential fraud, all while improving operational efficiency.
Integration-Ready: Easily integrates with your existing systems to streamline operations, from loan approvals to compliance checks, without disrupting your current workflow.

Conclusion

AI has already begun revolutionising bank statement analysis. What once was a manual, slow, and error-prone process is now a fast, accurate, and automated decision-making tool that businesses and financial institutions can rely on. The next step is to integrate this technology into your operations, and AuthBridge’s Bank Statement Analyser is the ideal solution to help you do just that.

By Abhinandan, 2 weeksJuly 9, 2025 ago

BFSI

Key Fact Statement (KFS): A Definitive Guide

Introduction To Key Fact Statement (KFS)

A Key Fact Statement (KFS) is a concise, standardised document that outlines the essential terms and conditions associated with a financial product or service. Designed to enhance transparency and promote informed decision-making, the KFS is typically presented to customers before they commit to a contract or agreement. Its purpose is to ensure that individuals are fully aware of the costs, obligations, and key risks involved, without being overwhelmed by lengthy legal jargon or complex technical details.

In both the United Kingdom and India, the use of Key Fact Statements has become a regulatory requirement across several sectors, including banking, insurance, telecommunications, and consumer lending. For instance, the Financial Conduct Authority (FCA) in the UK mandates clear disclosure of fees, interest rates, and repayment schedules for credit agreements, while the Reserve Bank of India (RBI) requires all regulated entities to provide borrowers with a KFS before executing a loan agreement. This regulatory emphasis reflects a broader shift toward consumer protection, driven by increasing concerns over mis-selling, hidden charges, and asymmetric information in high-volume sectors.

The Key Fact Statement acts as a bridge between complex contractual information and everyday understanding. By providing all essential facts in a structured and summarised format, it empowers consumers to compare offerings across providers, evaluate terms objectively, and reduce the likelihood of disputes post-onboarding. Whether you’re signing up for a mobile data plan, health insurance policy, or personal loan, the KFS serves as the foundation for transparency, consent, and trust.

Why Key Fact Statements Matter

In an increasingly complex and digitally driven marketplace, the importance of a Key Fact Statement (KFS) cannot be overstated. As financial products become more sophisticated and contractual fine print grows denser, the KFS emerges as a crucial instrument in bridging the gap between providers and consumers. Its relevance extends far beyond regulatory compliance—it serves as a cornerstone of fair practice, informed consent, and consumer empowerment.

A Key Fact Statement ensures that critical information is not buried within pages of legal documentation, but rather presented clearly, upfront, and in a format that is easy to understand. In sectors like banking and telecommunications, where pricing structures may involve layered fees, fluctuating interest rates, or variable service clauses, this clarity is essential. It allows consumers to make decisions based on facts rather than assumptions, reducing the likelihood of buyer’s remorse or legal disputes later on.

From a regulatory standpoint, institutions such as the Reserve Bank of India (RBI) have recognised the role of KFS in fostering ethical business practices. The RBI’s directive mandates KFS for all personal loans, with a focus on disclosing the annual percentage rate (APR), tenure, EMIs, processing fees, and penalty charges in one single view.

For businesses, the benefits of using KFS go beyond compliance. It helps build trust, differentiate offerings, and reduce churn by setting clear expectations. When customers are well-informed from the outset, they are less likely to feel misled, which leads to better brand perception and fewer complaints.

In short, the Key Fact Statement is not just a document—it is a consumer safeguard and a strategic business tool, ensuring that transparency and trust remain at the forefront of customer engagement.

Key Industries Using Key Fact Statements

While the concept of the Key Fact Statement (KFS) originated within the financial services sector, its adoption has expanded significantly across industries where consumer trust, regulatory compliance, and product clarity are paramount. By offering a structured overview of essential terms and conditions, the KFS helps mitigate risk for both providers and end users—making it a valuable instrument in several high-impact domains.

Financial Services (Loans, Credit Cards, BNPL)

The most prominent use of Key Fact Statements can be seen in banking and lending. Regulatory bodies such as the FCA in the UK and the RBI in India mandate the provision of a KFS for products like personal loans, credit cards, and buy-now-pay-later (BNPL) schemes. These statements typically disclose the interest rate (APR), loan tenure, processing fees, repayment obligations, prepayment penalties, and total payable amount.

The adoption of KFS has become especially vital in the BNPL segment, where younger consumers may be drawn to easy credit without understanding the hidden costs. By enforcing transparency through Key Fact Statements, regulators aim to reduce defaults, curb overspending, and protect vulnerable borrowers.

Insurance (Health, Life, and General Insurance)

In the insurance industry, the Insurance Regulatory and Development Authority of India (IRDAI) has introduced policies to ensure that insurers present policyholders with simplified summaries of their plans. A Key Fact Statement in this context typically covers:

The sum insured
Premium amounts and frequency
Policy exclusions
Waiting periods
Claims process and turnaround times

Given the complexity of insurance contracts—especially in health and life insurance—KFS documents help demystify the product and reduce instances of claim rejections caused by misunderstanding or lack of information. For instance, in India, the IRDAI has mandated the use of a Customer Information Sheet (CIS)—functionally equivalent to a KFS—detailing all key features in one place.

Telecommunications (Mobile, Broadband, Internet Plans)

The Telecom Regulatory Authority of India (TRAI) and telecom regulators in the UK have pushed for Key Fact Statements to improve customer awareness around mobile and internet plans. In these statements, providers must include:

Plan validity and pricing
Data caps or limits
Network speed commitments
Roaming charges
Early termination or overage fees

This is particularly relevant in prepaid and post-paid mobile plans where promotional offers often mask the actual cost of usage. KFS ensures that customers are not caught off guard by auto-renewals, throttling of speeds, or hidden service charges.

Why Key Fact Statements Matter

From a regulatory standpoint, institutions such as the Financial Conduct Authority (FCA) in the UK and the Reserve Bank of India (RBI) have recognised the role of KFS in fostering ethical business practices. According to a 2023 FCA report, nearly 1 in 4 UK consumers admitted to signing up for a financial product they didn’t fully understand—an alarming figure that underscores the need for clearer disclosures. Similarly, the RBI’s directive mandates KFS for all personal loans, with a focus on disclosing the annual percentage rate (APR), tenure, EMIs, processing fees, and penalty charges in one single view.

Mandatory Components Of A Key Fact Statement

A Key Fact Statement (KFS) is only as effective as the clarity and completeness of the information it contains. To fulfil its purpose of promoting transparency and aiding consumer decision-making, certain core components must be consistently included, regardless of the industry. While regulators may prescribe sector-specific templates, the foundational structure of a KFS remains largely uniform—designed to convey critical contractual and financial details in an accessible, digestible format.

At its core, a well-structured KFS ensures that customers can compare products side-by-side without needing to decipher complex legal agreements. The table below outlines the essential elements that form the backbone of any regulatory-compliant KFS:

Component	Description
Interest Rate / Charges	Clearly states the applicable interest rate, typically in terms of APR (Annual Percentage Rate), along with processing fees, late payment penalties, and any other one-time or recurring charges.
Tenure & Repayment Terms	Indicates the duration of the contract (e.g., loan term or insurance validity) and outlines the repayment or renewal schedule, including options for part-payment or early closure.
Key Terms & Exclusions	Lists all major terms, conditions, and exclusions in simple language—especially relevant for insurance and telecom plans to avoid confusion or misinterpretation.
Total Payable Amount	Specifies the total cost to the consumer over the life of the contract, including principal, interest, fees, and taxes—crucial for financial products.
Prepayment / Cancellation Clause	Discloses whether early repayment or policy cancellation is allowed, and if so, the applicable penalties or procedural requirements.
Contact & Grievance Details	Provides a clear escalation matrix with customer support numbers, email addresses, and grievance redressal mechanisms, including turnaround time expectations.
Customer Declaration	A signed statement (physical or digital) acknowledging that the customer has read, understood, and agreed to the terms outlined in the KFS.

For example, in India, the Reserve Bank mandates that every loan KFS must prominently display the annualised percentage rate, processing fee, and net disbursed amount in a tabular format.

A well-drafted KFS not only safeguards the consumer but also protects the institution from legal and reputational fallout. It becomes a point of reference in case of disputes, offering documentary proof that due disclosure was made in advance.

As industries continue to evolve toward digital-first ecosystems, the future of KFS lies in automation—generating real-time, personalised Key Fact Statements dynamically across digital channels.

Key Fact Statement Example (Loan Product)

To fully understand the practical utility of a Key Fact Statement, it helps to examine a real-world example—particularly from the domain of personal loans, where transparency and repayment clarity are crucial. The example below illustrates how a well-crafted KFS lays out all the essential information a borrower needs to evaluate and compare loan offers with confidence.

Let us consider a fictional case where an individual applies for a personal loan from a licensed financial institution:

Key Fact Statement: Personal Loan

Item	Details
Loan Amount (Principal)	₹5,00,000
Loan Tenure	36 months (3 years)
Annual Interest Rate (APR)	14.00%
Equated Monthly Instalment (EMI)	₹17,084
Processing Fee	₹2,000 + 18% GST = ₹2,360
Prepayment Charges	2% of outstanding principal
Late Payment Penalty	₹500 per month + additional interest
Total Repayable Amount	₹6,14,990 (inclusive of all charges)
Disbursed Amount (Net Credit)	₹4,97,640
Customer Support Helpline	1800-123-456 (Mon–Sat, 9am to 6pm)
Grievance Redressal Officer	grievance@abcfintech.in
Declaration	“I hereby acknowledge that I have read and understood the above terms.”

This sample KFS allows a borrower to assess not only the headline loan amount and interest rate but also the total cost of borrowing, including deductions, fees, and repayment obligations. The inclusion of grievance mechanisms and mandatory declarations ensures the customer is both informed and empowered.

In a digital setting, such a KFS may be presented via mobile or web dashboards, with integrated e-signatures and instant verification—a trend increasingly adopted by fintech lenders and regulated banks alike.

How To Create A Compliant Key Fact Statement (Step-By-Step)

Creating a compliant and consumer-friendly Key Fact Statement (KFS) requires more than just assembling basic data—it involves translating complex contractual terms into accessible information, all while adhering to the relevant regulatory framework. Whether you’re a bank, insurer, telecom provider, or fintech platform, following a structured, step-by-step approach ensures that your KFS is both legally sound and customer-centric.

Step 1: Identify the Applicable Regulatory Guidelines

Begin by determining which industry regulator governs your product or service. In India, for example, RBI governs loans and digital lending, IRDAI oversees insurance, and TRAI regulates telecom services. In the UK, organisations must comply with standards set by entities such as the Financial Conduct Authority (FCA) and Ofcom. These bodies typically provide either a mandatory format or a set of minimum disclosure criteria for the KFS.

Step 2: Gather All Relevant Financial or Service Information

This includes, but is not limited to:

Charges and interest rates
Product tenure
Repayment or renewal terms
Penalties or exclusions
Grievance channels

It is important to source this information directly from your internal product documentation or policy teams, as consistency is crucial for both compliance and dispute resolution.

Step 3: Use Plain, Accessible Language

Avoid jargon, acronyms, or legalese wherever possible. For example, instead of stating “moratorium clause on EMIs post disbursement,” use “option to delay EMIs for the first three months.” The goal is to create a document that is understandable to someone with no prior exposure to financial or contractual terminology.

According to the UK’s Plain English Campaign, the average reading age of consumers is 9 to 12 years. Therefore, a well-written KFS should not require expert-level interpretation.

Step 4: Adopt a Standardised Format with Visual Consistency

Ensure that the structure of the KFS is consistent across all product lines. A tabular format with distinct sections for cost, duration, conditions, and contact details works best. In digital environments, responsive formatting should be used so the KFS renders well across devices.

Some organisations also choose to brand their KFS with logos, colours, or icons—but this should never come at the cost of clarity or neutrality.

Step 5: Implement a Sign-Off or Acknowledgement Mechanism

Include a mandatory declaration where the consumer acknowledges they have read and understood the information provided. In digital journeys, this can be done via checkboxes, OTP-based confirmations, or electronic signatures. This not only serves as proof of consent but also reduces legal exposure in the event of a dispute.

Step 6: Review and Validate for Compliance

Finally, have the KFS reviewed by your compliance or legal team before it goes live. This step is particularly crucial in regulated sectors, as non-compliance can result in penalties, reputational harm, or customer grievances. Some larger organisations even employ automated validation tools that check for missing fields or regulatory inconsistencies before publishing the document.

Future Of Key Fact Statements In India

The role of Key Fact Statements (KFS) in India is undergoing a transformative shift. No longer just a compliance formality, the KFS is fast emerging as a strategic instrument in the digitisation of customer onboarding, grievance redressal, and financial literacy. With regulators like the Reserve Bank of India (RBI) pushing for uniformity, transparency, and digital accessibility, the future of the KFS in India is both promising and evolving.

Regulatory Push for Digitisation and Uniform Standards

In recent years, the RBI has taken decisive steps to standardise KFS formats, particularly in the digital lending ecosystem. In its circular dated August 10, 2022, the RBI made it mandatory for all regulated entities (REs) and Lending Service Providers (LSPs) to provide a standardised Key Fact Statement to borrowers before loan execution. This directive applies not just to banks and NBFCs, but also to fintech platforms that operate under the umbrella of REs.

Further, in February 2024, the RBI updated its guidelines to include more stringent requirements for disclosing:

All-in-cost of the loan (including interest, processing fees, GST, insurance, etc.)
Net disbursed amount to the borrower
Repayment schedule and APR (Annual Percentage Rate)
Breakup of each fee component
Direct linkage to a digital grievance redressal system

These measures aim to curb mis-selling, hidden charges, and unauthorised deductions, especially prevalent in the fast-growing digital lending space.

Rise of Smart, API-Driven KFS

As fintech platforms grow in complexity and scale, traditional PDF-based KFS documents are giving way to dynamic, API-driven Key Fact Statements. These allow real-time generation and presentation of personalised KFS for each customer—complete with auto-filled data, multilingual support, and embedded links to terms, FAQs, or grievance portals. Such KFS documents can be integrated directly into mobile apps, WhatsApp journeys, or web-based dashboards.

Companies like AuthBridge are already facilitating automated KFS delivery as part of their onboarding and digital verification workflows. These smart KFS solutions are FCRA and RBI-compliant, digitally signed, and equipped with built-in tracking for audit purposes.

Greater Focus on Vernacular & Accessibility

With India’s digitally active population extending deep into Tier II, III, and rural markets, the need for vernacular Key Fact Statements is greater than ever. Many regulators, including IRDAI and TRAI, are encouraging institutions to provide KFS and related disclosures in regional languages, supported by visual aids, audio summaries, and simple iconography. This is essential to bridge the gap between financial inclusion and informed consent.

AuthBridge, in alignment with these evolving norms, offers KFS formats that can be customised by language, product, and region, ensuring inclusivity without compromising on compliance.

Towards Embedded Consent and Auditability

Another emerging trend is the digitally acknowledged KFS—wherein a borrower must actively consent to the document before a loan is processed, or a policy is issued. This digital trail ensures that the institution has irrefutable proof of customer understanding and acceptance. As consumer protection norms tighten, such embedded consent mechanisms will become critical in litigation scenarios and dispute handling.

By Siddharth, 2 weeksJuly 7, 2025 ago

BFSI

Importance Of Contact Point Verification (CPV) In Banking

Introduction To Contact Point Verification In Banking

Contact Point Verification (CPV) is a key step in banking operations, focused on confirming that the communication channels provided by customers. This includes checking for active and authentic mobile numbers, email addresses or postal addresses. By validating these contact points, banks make sure that important alerts such as transaction notifications, OTPs for Internet banking and statements reach the right recipient without delay or interception.

A strong CPV process strengthens security across multiple touchpoints. For Internet-banking log-ins and fund transfers, an OTP sent to a verified number or e-mail ensures that only the genuine customer can approve high-value transactions. In customer onboarding, instant confirmation of email addresses prevents mistyped or fraudulent entries from entering the system. Even routine communications, like sending monthly statements or promotional offers, benefit from CPV. Banks avoid the costs and reputational risks of bounced emails or messages sent to inactive numbers.

Moreover, CPV contributes to operational efficiency. Automated checks, such as carrier lookups to verify number status or SMTP pings to test e-mail server availability, can be completed in minutes. This significantly reduces manual follow-up. When automated channels fail, voice-call or letter-dispatch methods ensure no customer is left unverified. This multi-channel approach enhances the customer experience by minimising onboarding friction. It also reduces the resource burden on call centres and branch staff.

Core Methods And Best Practices For CPV In Banking

In banking, Contact Point Verification relies on a multi-channel strategy to ensure that customer communication details are both valid and in active use. Automated mechanisms, such as carrier lookups and SMTP handshakes, quickly filter out invalid entries. One-time passwords (OTPs) sent via SMS or e-mail provide a near-instant confirmation of possession. While interactive voice response (IVR) calls serve as a secondary digital protection. Where digital channels fail, a manual agent call or postal confirmation letter bridges the gap, ensuring that even customers in low-connectivity regions can complete verification.

A hallmark of an effective CPV programme is its fallback logic: if an SMS OTP isn’t delivered, the system should automatically trigger an IVR prompt or e-mail link without manual intervention. This continuity reduces customer effort and cuts down support overhead. Moreover, all verification attempts and outcomes should be logged in real time to create an audit trail capable of withstanding regulatory scrutiny and forensic review.

Banks aiming for excellence in CPV adopt several best practices:

Time-Bound Automated Checks: Carrier and SMTP checks are executed within seconds, flagging invalid entries before consuming OTP resources.
Dynamic Fallback Rules: The system should escalate only once per failed channel, e.g., one SMS attempt, one IVR attempt, then route persistent failures to a human agent for resolution.
Consent Management: Before dispatching any OTP or call, explicit customer consent must be captured and stored by data protection regulations.
Periodic Re-Verification: High-risk or dormant accounts should undergo CPV at defined intervals, typically every 12–24 months, to ensure contact information remains current.

Method	Check Performed	Data Captured
Carrier Lookup	Is the mobile number active and valid?	Live/deactivated status, network operator
SMTP Handshake	Does the e-mail server accept incoming connections?	Bounce responses, server latency
SMS OTP	Does the user receive and submit the code correctly?	OTP send time, validation success/failure
IVR Prompt	Does the automated call connect and confirm user?	Call logs, DTMF or voice confirmation result
Manual Agent Call	Can a human agent reach and verify the contact?	Agent notes, final disposition
Postal Letter Dispatch	Does physical mail reach the stated address?	Delivery confirmation or returned mail flag

Regulatory Framework And RBI Guidelines For CPV

The Reserve Bank of India embeds Contact Point Verification into its KYC and CDD norms across these key scenarios:

Periodic KYC Updation: When a customer updates only their postal address, the new address must be verified through positive confirmation within two months, by means such as an address-verification letter, contact point verification, deliverables, etc.
Sole Proprietorship Documentary Exception: If a sole proprietor cannot furnish two activity-proof documents, the bank may accept one, but only after it undertakes contact point verification … to establish the existence of such firm and satisfy itself that the business activity has been verified from the address of the proprietary concern.
Enhanced Due Diligence for Remote Onboarding: Before allowing operations in a non-face-to-face account, banks must confirm the customer’s current address via positive confirmation methods, with CPV listed alongside letters and other deliverables.

Practical Use Cases And Benefits Of CPV In Banking

Contact Point Verification delivers multiple advantages across a wide range of banking operations, enhancing security, efficiency and compliance.

1. Secure Onboarding and Account Activation

When a new customer applies for a savings or current account, whether in branch or via digital channels, CPV prevents fraudulent or erroneous enrolments. By confirming mobile numbers and e-mail addresses in real time, banks ensure that onboarding credentials (such as Internet-banking log-ins or debit-card PINs) reach bona fide applicants only. This not only reduces the incidence of “dead” or fraudulent accounts but also diminishes manual rework.

2. Safe Transaction Authorisations

High-value fund transfers and bill payments depend on one-time passwords delivered to verified channels. CPV underpins transaction security by ensuring that OTPs cannot be intercepted via stale or spoofed numbers.

3. Dormancy Reactivation and Periodic Re-Verification

Many customers fall into dormancy, typically after 12 – 24 months of inactivity, raising the risk of unauthorised reactivation. CPV applied at the point of dormancy reactivation (sending OTPs or verification calls) confirms that contact details remain under the customer’s control.

4. Regulatory Audit and Compliance Reporting

CPV generates a rich audit trail: every carrier-lookup response, OTP dispatch, IVR call log and agent-confirmation note is timestamped and stored. This comprehensive record helps banks demonstrate compliance with KYC Directions and Data Protection norms during inspections.

Conclusion

In a nutshell, Contact Point Verification is what keeps banking both safe and straightforward: by quickly checking that your phone number, email or address is yours, whether through a simple OTP, a quick automated call or a brief manual check, banks stop fraudsters in their tracks, avoid endless back-and-forth during sign-up, and stay on the right side of RBI rules. It’s a small step that makes a big difference, building customer trust and setting the stage for banking that’s as seamless as it is secure.

By Abhinandan, 3 weeksJuly 4, 2025 ago

Background Checks

How One Software Engineer Deceived Multiple Startups Simultaneously

Moonlighting fraud in the tech world has been gaining attention, but a new case has brought this issue to the forefront in a way no one expected. The tale of how one individual deceived multiple startups by secretly working at several companies simultaneously is a wake-up call for all businesses. This blog will walk you through the details of the scam, its widespread impact, and what companies can do to avoid falling victim to similar deceptive practices.

How A Talented Engineer Became a Serial Moonlighter

Soham Parekh, an Indian software engineer, had an impressive resume that made him a preferred candidate for several top-tier US-based startups. With a degree from the University of Mumbai and a master’s from Georgia Tech, he looked like the ideal hire. His skills in backend development, cloud services, and full-stack engineering were just what many fast-growing companies were looking for.

However, behind his perfect CV was a fraud waiting to be unearthed. Parekh secretly held multiple roles simultaneously, working at various companies concurrently. He convinced employers he was committed to each job while dividing his time and attention between multiple full-time roles. His charm during interviews made him a standout, but his split focus meant none of his employers were getting the full value of their hire.

The First Red Flag: An Unusual Termination

The first sign that something was not quite right came when Suhail Doshi, co-founder of Mixpanel, hired Parekh. Doshi was initially impressed by Parekh’s performance, but things quickly started to reveal themselves. After just one week at Playground AI, Doshi found that Parekh’s work ethic was lacking. Parekh was distracted, unreliable, and unable to fully commit to the tasks at hand. Doshi’s suspicions grew, and after further investigation, he realised Parekh had been moonlighting at other startups while working for him.

Within a week, Parekh was let go. But Doshi wasn’t done yet. After his own experience, he felt the responsibility to warn other tech entrepreneurs who might fall into the same trap.

How Did This Moonlighting Scam Get Exposed?

Suhail Doshi didn’t keep his suspicions to himself. He decided to go public, posting on a popular social media platform to warn others in the startup community. His posts quickly went viral, shedding light on the extent of the fraud.

In one of his posts, Doshi shared Parekh’s resume and called out the discrepancies he’d found. He went as far as to claim that 90% of Parekh’s resume was likely fake. He had tried to give Parekh a second chance, hoping the techie would change, but it was clear that the fraud continued unabated.

Doshi’s posts served as a call to action for other startup founders. His transparency led to a slew of discoveries from other businesses that had been similarly deceived.

The Massive Extent Of The Moonlighting Scam

As Doshi’s posts gained traction, more startup founders came forward to share their experiences with Soham Parekh. Nicolai Ouporov, CEO of Fleet AI, confirmed that Parekh had been juggling multiple jobs at once. He wrote, “He’s been doing this for years.”

Matthew Parkhurst, CEO of Antimetal, also shared his experience, revealing that he had hired Parekh in 2022 but quickly realised something was off. “Soham was our first engineering hire… We realized quickly that he was working at multiple companies and let him go.”

Justin Harvey, co-founder of AIVideo, explained how Parekh nearly secured a position at his company: “He crushed the interview. We were THIS close to hiring him.” But the revelations from Doshi’s posts led Harvey to reconsider, preventing the company from making a costly mistake.

Why Moonlighting Fraud Is More Dangerous Than It Seems

While some might argue that moonlighting is just an unfortunate consequence of the gig economy, Parekh’s actions went beyond mere moonlighting. He was actively deceiving his employers, manipulating the system for personal gain, and misleading multiple startups into believing he was working exclusively for them.

The problem isn’t with employees having side jobs, but with deceitful moonlighting, where individuals take on multiple full-time jobs without informing their employers. This situation is particularly dangerous for startups, where each hire is a vital part of the team’s success. When someone is working for several companies at once, the consequences can include:

Reduced productivity: An employee split between several roles can’t give their full attention to any single company.
Security risks: Sensitive information can be mishandled, especially if the employee has access to multiple company systems.
Trust issues: The lack of transparency breeds distrust, which can harm team dynamics and morale.

What Can Employers Learn From This Moonlighting Scam?

The case of Soham Parekh has brought moonlighting fraud into sharp focus, forcing companies to confront a growing risk in the hiring process. So, what should employers take away from this scandal?

First and foremost, due diligence in the hiring process is essential. Employers must verify not just resumes but also the employment history of potential hires. They must look for signs of potential deception, such as inconsistent timelines or overlapping job roles.

Additionally, it’s crucial to set clear policies around secondary employment and encourage transparency in the workplace. Employees should feel comfortable disclosing any outside work they might be involved in, especially if it affects their performance or commitment to the company.

How AuthBridge Can Help Prevent Similar Scams

AuthBridge offers a powerful solution to ensure that companies are hiring employees who are committed and trustworthy. By integrating background verification tools into the hiring process, businesses can significantly reduce the risk of hiring someone involved in moonlighting fraud.

Employment History Checks: AuthBridge thoroughly verifies an applicant’s employment history, ensuring that claims of previous employment are legitimate.
UAN Verification: Verifying the Universal Account Number or UAN details can highlight instances of dual employment, revealing whether an individual is secretly working for multiple employers.
Form 26AS Checks: This check helps employers cross-check an employee’s income tax details to verify employment claims and spot inconsistencies.
AI-Powered Anomaly Detection: AuthBridge uses AI to analyse employment patterns and flag any irregularities that might indicate deceptive practices like moonlighting.

Conclusion

The Soham Parekh scam highlights a serious threat in today’s job market. As remote work becomes more prevalent, it’s easier for individuals to hide dual employment, causing major risks to businesses. The tech industry, in particular, is vulnerable, as many startups rely on a small team of trusted individuals.

Employers must act now to protect themselves. By using tools like AuthBridge’s background verification services, businesses can ensure that they are hiring dedicated, trustworthy employees who are committed to their roles. Implementing strong verification processes will help prevent fraud and ensure that your company is not the next victim of a moonlighting scam.

By Abhinandan, 3 weeksJuly 3, 2025 ago

Employee Screening

Risk & Compliance

Financial Intelligence

Identity Verification

Utilities

Employment

Entity/Business Level

Professional

Banking & Payments

Fraud Detection

Background Verification

Due-Diligence

Resource Library

Featured Resource

What Is AI-Powered Automated Employee Onboarding?

Starting With The ATS

Pre-onboarding Efficiency

Real-Time Communication and Support

Intelligent Task Management

Predictive Analytics For Early Intervention

Features Of AI-Powered Employee Onboarding

Automated Document And Compliance Management

Personalised Learning Paths And Training Modules

AI-Powered Virtual Assistants (Chatbots)

Real-Time Engagement And Feedback Analytics

Predictive Analytics And Data-Driven Insights

Scalable And Flexible Onboarding Processes

Benefits of AI-Powered Employee Onboarding For HR And Employees

Improved New-Hire Engagement and Retention

Reduced HR Administrative Burden

Faster Time to Employee Productivity

Enhanced Compliance and Reduced Risk

Scalability Across Global and Remote Teams

The Human Element In AI-Powered Onboarding

Guide To Implementing AI-Powered Onboarding For HR Leaders

Assessing Your Organisation’s Onboarding Needs

Selecting The Right AI Onboarding Solution

Overcoming Implementation Challenges

Key Metrics To Track In AI-Powered Onboarding

Elevate Your Onboarding Experience With AuthBridge’s AI-Powered Solution

What Is Social Media Screening For Employment?

Benefits Of Social Media Screening:

The Need For Conducting Social Media Screening

1. Protecting Your Company’s Reputation

2. Uncovering Hidden Red Flags

3. Reducing Bias in Hiring Decisions

4. Preventing Workplace Misconduct

5. Staying Ahead of Potential Legal Issues

Top 7 Social Media Screening Platforms

1. AuthBridge

2. HireRight

3. First Advantage

4. Global Background Screening (GBS)

5. Ferretly

6. Neotas

7. HiPeople

Conclusion

Introduction

Understanding GST Returns

What are GST Returns?

Why Verifying GST Returns Is Crucial During Onboarding

What Are Bank Statements?

Key Components Of A Bank Statement:

Why Verifying Bank Statements Is A Must In Third-Party Onboarding:

GST Returns vs Bank Statements: Key Differences And Similarities

Why Verifying GST Returns & Bank Statements Is Important For Compliance

How Third-Party Onboarders Can Leverage GST And Bank Statement Verification

Conclusion

The Importance Of Bank Statement Analysis

How AI Understands Bank Statements Like A Risk Analyst Would

Where AI-Based Bank Statement Analysis Delivers The Most Impact

1. Lending and Credit Risk Assessment

2. Fraud Detection and Document Forensics

3. Gig Economy and Blue-Collar Underwriting

4. SME and Self-Employed Profiles

Advantages Of AI Bank Statement Analyser

Speed and Scalability Without Sacrificing Quality

Improved Accuracy and Reduced Human Error

Enhanced Risk Detection and Fraud Prevention