Case Studies 3 min

Expediting International Onboarding for Foreign Exchange Brokers

Identity Verification Strikes the Balance Between Security and Convenience 

With clients around the world, foreign exchange (forex) brokers must securely onboard customers in accordance with a patchwork of strict Anti-Money Laundering (AML) laws and Know Your Customer (KYC) processes. Forex fraud is a constant risk. The U.S. Commodity Futures Trading Commission has a standing advisory that offers tips and guidance for spotting forex fraud.

While forex brokers must comply with regulations safeguarding against fraud, they also know customers expect streamlined and convenient onboarding experiences. In the fast-paced world of forex, cumbersome account creation creates the risk of trader abandonment. 

But security also rates high with consumers, who are more willing to accept some friction during online onboarding as a sign that companies value safety. A 2022 study commissioned by Trulioo found that 58% of consumers are more tolerant of identity verification than they were two to three years previously, and 78% are more comfortable with the process taking longer or involving more steps.

As the rapidly expanding digital economy brings new entrants — often those with less-established identities — into the forex market, brokers will continue to face the challenge of striking the right balance between security and the optimal user experience.

Efficient Due Diligence in a Volatile Global Market

Ensuring new users are who they say they are and present acceptable levels of risk is a top priority for forex brokers and other financial services companies. But the risk varies among traders, depending on identity profile, transactions, location and other factors. 

Yet speed and convenience are crucial in a quickly fluctuating currency market. Forex is a massive, high-volume trading market, so brokers face the challenge of accurately verifying identities globally and in near real time.

Fast, Secure Onboarding Across Borders With Trulioo 

Trulioo orchestrates hundreds of identity services and independent data sources worldwide to verify and authenticate users, enabling forex brokers to create international onboarding that satisfies their risk requirements while minimizing friction. 

By dynamically corroborating the information collected down to the risk profile or transaction level, Trulioo can improve match rates and reduce false positives, creating a higher level of assurance throughout the customer life cycle.

For example, a broker may opt for basic due diligence with standard identity checks for low-risk users but add document verification or other identity proofing for people, accounts or transactions that cross a certain risk threshold. That risk-based approach to identity verification enables forex brokers to smoothly onboard traders and still meet stringent AML and KYC requirements, reducing the likelihood of fraud and other bad behavior. 

Consumers notice when companies take security seriously. The 2022 research from Trulioo found 74% of consumers are more likely to trust a brand or company that uses identity verification when people create an account or make a transaction. 

Dynamic identity verification and a risk-based approach help forex brokers build that trust, quickly adapt to changing business models and scale to meet increased demand at peak trading times. Trulioo constantly expands its network of traditional and nontraditional data sources and identity services, enabling forex brokers to confidently enter new markets and improve accessibility to the currency trading marketplace.

Industry Background

The foreign exchange market involves buying and selling foreign currencies. With an average $6.6 trillion traded daily, it’s the world’s largest financial market. Foreign exchange brokers — platforms that enable foreign exchange transactions — operate 24 hours a day and serve a global customer base. While the UK and U.S. dominate the market, online platforms have expanded accessibility to traders in emerging economies.