Rising regulatory challenges propel the necessity for robust entity verification

A recent study by Moody’s emphasizes the critical role of Entity Verification in risk management, highlighting how essential it is for businesses to authenticate the credentials of entities during onboarding or ongoing business relationships to circumvent regulatory penalties and protect their reputation.

The study by Moody’s reveals that the landscape of business risk is becoming more complicated, as evidenced by a substantial increase in the entities and individuals listed on sanctions watchlists—a 14% rise in the past 14 months alone. Additionally, the frequency of cyber-related risk events has almost doubled year over year, and incidents of human trafficking have surged by 22%.

These growing risks underscore the necessity for firms to diligently screen and report potential threats to comply with regulations across various jurisdictions. Failure to comply can result in severe financial penalties and reputational damage, a concern for 64% of the surveyed risk and compliance professionals who cite the complexity of regulatory compliance as a major challenge.