While we often speak about the many risks and crimes that Know Your Customer (KYC) protocols help to circumvent (the reactive approach), the cybersecurity industry can sometimes forget to highlight the specific ways KYC software and practices offer protection (the proactive approach).
With the number of digital users rapidly expanding globally, knowing how to accurately verify someone’s ID and assess their true risk profile is essential to ensuring compliance and upholding important safety standards set by your local jurisdiction.
2023 has shown that the exchange of digital assets and a more competitive than usual marketplace have driven technological advances further than ever before. Staying on top of evolving trends, while still remembering the core basics of Customer Due Diligence (CDD), are two of the best ways to keep your business as well as your clientele safe from evolving cybercrime, fraudsters, money laundering (AML), and many other types of financial and identity crimes.
Below, we’ll take a closer look at some of the fundamentals of spotting fraudulent users in your database. Read on to learn more
Focus on Specific Areas of KYC Documents
While KYC processes and verification documents are unfortunately unable to provide 100% security against fraud and criminal activity, they do play a valuable role in catching key details that may indicate a higher risk profile and/or uncover problematic associations that allow your organization to act accordingly. When reviewing documents like a passport or driver’s license, it’s important to closely review everything submitted and evaluate data points like:
Identification photos,
Full name,
Date of birth,
Expiry date,
Document number,
Address,
and more.
With personal identity documents being one of the most popular commodities on the black market, knowing how to spot inconsistent details is one of your best lines of defense, and having automated solutions in place—such as iComply’s modular suite of KYC programs—helps to remove the risk of human error or oversight.
Cross Reference Materials and Verify Photos
One of the most important parts of KYC is ensuring your verification process doesn’t exist in a vacuum. Using multiple points of reference, including more than one document, and being able to compare passport/ID photos with a live representation of an individual all help to reduce fraudulent users. The more databases you are able to (safely and legally) access to conduct your verification, the stronger your confidence can be with regard to the validity of the identities in your system.
iComplyKYC conducts CDD and EDD using some of the world’s most trusted record bases, giving you access to the information you need to move forward, while still respecting ethical guidelines pertaining to accessing private information.
Triple Check All Information and Little Details
Any information contained in the Machine Readable Zone (MRZ) should clearly match the standardized setup of the document in question. For example, passports should have issuing and expiration dates that match up, font types should align, and any other security details (e.g. reflective strips) should be consistent with all government-issued documents. If any detail seems questionable, the application and/or user should immediately be flagged and escalated for further review.
Manual vs Automated Review
While manual document review may be effective on a small scale, the reality is often inefficient when it comes to keeping up with onboarding, constant re-evaluation, and adjusting to shifting global regulations. Automated software solutions like iComplyKYC help you navigate complicated KYC processes with confidence and ease, allowing you to focus on your business operations while still remaining compliant. Our world-leading end-to-end suite of KYC + KYB software is able to integrate with existing frameworks in a matter of minutes, mitigating headaches and removing the frustration of downtime during adoption.
iComply is proud to partner with businesses across North America and Europe to ensure you have everything you need to stay compliant and ahead of the curve when it comes to circumventing criminal activity through your organization. Learn more about how you can stay ahead of evolving AML and fraud standards, and discover why iComply is your leading choice for software solutions by talking to our team today!
In today's digital world, streamlined and reliable identity verification is essential for compliance and the protection of vulnerable persons, as well as safe business practices. From validating users conducting financial transactions to ensuring that sensitive...
With the world of financial crime constantly shifting and evolving, navigating illicit activities has become increasingly complex. Two prominent crimes within the financial sector are money laundering and embezzling, and while both do pose significant risk to...
As recent state conflicts have reminded the global market, the realities of conducting international trade and business is not without its fair share of risk and necessary regulation to avoid further harm. Sanctions serve as a form of intervention and protection for...
As Q2 of 2023 ramps up, the compliance industry continues to face a fast-paced environment of global changes and challenges when implementing protective measures against fraud, money laundering (AML), and other forms of financial crime (FinCrime). 2022 brought no shortage of showcase incidences highlighting the importance of compliance measures; with an estimated 90% of FinCrime activities still going undetected, it’s more important than ever to stay on top of evolving practices and emergent data to build a safer global marketplace for all.
At iComply, we recognize how vital KYC and AML measures are when it comes to circumventing crime and ensuring your business is aligned with all relevant regulations. Below, we’ll take a closer look at some of the most prevalent trends and points of consideration emerging in 2023, as well as why partnering with a trusted software platform like iComplyKYC is one of the best ways to streamline your compliance. Read on to learn more.
Core Takeaways
Before we delve into some of the more specific factors to be aware of in 2023, it is worth noting that the compliance industry as a whole—as well as financial institutions subject to regulation—need to be aware of the following 3 major themes at the forefront of AML and KYC protocols:
Adapting to upcoming legislation
Embracing proactive strategies
Investing in continued education and training
While the uncertainty arising out of COVID-19 led to a brief slowdown in the addition of new regulations and difficulty in amassing concrete statistics with regard to AML and fraud, there is no denying that we have seen a marked increase in fraudulent activity, specifically in cybercrimes. Ransomware, targeted phishing campaigns, evolving digital scams, and other crimes committed through “cyber-enabled” means have risen to the top of Interpol’s risk profile for fraudulent activity. Making sure your organization is aware of and implementing the new recommended standards resulting from these activities is crucial.
In addition to a significant increase in cybercrime, 2023 AML and fraud prevention focal points include:
Addressing New Geopolitical Risks
The ongoing conflict between Ukraine and Russia has highlighted the importance of monitoring sanction lists and maintaining Know Your Customer (KYC) and Enhanced Due Diligence (EDD) protocols that are able to adapt quickly to changing circumstances. International sanctions can lead to an increase in the risk of money laundering, with criminals becoming ever more creative with their methods of circumventing regulations and restrictions; this means financial institutions and digital asset management firms must be hyper-vigilant when it comes to spotting fraudulent or criminal users and dealing with them swiftly and effectively.
Monitoring Digital Assets
As major scandals like the sudden collapse of FTX in late 2022 have reminded us, the growth of digital asset markets like cryptocurrency exchanges has presented unique challenges when it comes to monitoring and accountability. With 2023 ushering in the implementation of regulations like the Financial Action Task Force’s Travel Rule (Recommendation 16), and with the EU poised to approve an upcoming Markets in Crypto-Assets (MiCA) Regulation, businesses and institutions need to be ready to pivot accordingly—especially as more stringent guidelines are being designed to safeguard against digital fraud and other forms of cybercrime that go undetected.
An Increase in “Challenger” Banks and Alternative Payment Companies
The number of alternative payment companies and “challenger” (aka “Neo” / “digital”) banks across the globe have increased significantly in the last few years, and international regulators have grown concerned with ensuring they are subject to the same (if not higher) level of compliance standards. Decentralized banking systems present a high risk for fraudulent activities without the proper measures in place, and such institutions should anticipate the arrival of more legal safeguards that help keep criminals at bay in the coming months and years.
Facing the Challenges of Digital Identities and the Metaverse
COVID-19 accelerated the shift to a more prevalent online global community, with users worldwide adopting digital avatars through venues like Meta and utilizing other services that enable an online persona. While the metaverse remains in its fledging stages, it presents a very real threat and a high potential for money laundering, human trafficking, terrorist and adjacent activities, and other financial crimes as it continues to develop. With these risks already beginning to surface and a precedent already being set due to fraudulent activities on existing platforms, we can likely expect the international regulatory guidelines to implement protective measures and thoroughly analyze any evolving concerns as they make themselves known.
Lay the Foundation for Safety Through Compliance With iComply
At iComply, we’re proud to help financial institutions and companies facing ever-complex compliance guidelines streamline their operations and build a strong foundation of safety. Our modular suite of KYC + KYB software makes it simple for business leaders to stay informed and compliant with the latest AML legislation, and our modular platform can be set up within minutes, alleviating headaches, tedious manual work, and downtime woes.
Learn how you can stay ahead of evolving AML and fraud standards, and discover why iComply is your leading choice for software solutions by talking to our team today.
In today's digital world, streamlined and reliable identity verification is essential for compliance and the protection of vulnerable persons, as well as safe business practices. From validating users conducting financial transactions to ensuring that sensitive...
With the world of financial crime constantly shifting and evolving, navigating illicit activities has become increasingly complex. Two prominent crimes within the financial sector are money laundering and embezzling, and while both do pose significant risk to...
As recent state conflicts have reminded the global market, the realities of conducting international trade and business is not without its fair share of risk and necessary regulation to avoid further harm. Sanctions serve as a form of intervention and protection for...
With the first months of 2023 already showing uncertainty in both financial and digital markets (re: Silicon Valley Bank and Credit Suisse), business leaders are looking for ways to stay on top of evolving trends and patterns of risks to mitigate the harm caused by money laundering (AML), fraud, and unintentional funding of criminal/terrorist activities (CFT).
As more users adopt digital identities and integrate virtual payment methods, platforms, and practices in their daily lives, global regulators are carefully monitoring trends and actively looking to implement standards that help to circumvent the risks associated with criminal corruption.
Below, we’ll take a closer look at some of the anticipated and notable trends expected in 2023 in the digital universe as online and virtual avenues continue to expand.
Full Speed Ahead
As mentioned above, there are no signs that the creation and usage of digital identities will slow down (quite the opposite, in fact). Digital identity verification has become a pressing issue for regulators as user “personas” become more prevalent in daily matters such as government verification, banking, healthcare, the workforce, and education.
With the identity verification market expected to be worth in excess of US$38.5 Billion by 2033 (source), it should not be a surprise to those in industries adjacent to or directly utilizing ID verification that it is highly likely global regulars and lawmakers will introduce new guidelines that aim to establish a universal understanding and standard of compliance for countries to follow.
The speed with which digital identities are being implemented in innovative ways not only opens the doors for groundbreaking societal and technological advancements but also opens the door to a world of unknown vulnerabilities that place citizens and organizations at risk. Compliance standards and KYC protocols (more on that below), continue to grow in importance as a result, making it essential for businesses and institutions to be ready to pivot as needed.
Did you know: iComply’s unique, modular suite of KYC programs makes it easy to stay compliant with fincrime mandates across the globe and can integrate into your existing frame in minutes?
Data Privacy and Security Concerns
Identity fraud has become one of the most prevalent forms of criminal activity in the digital sphere, causing significant harm to the individuals directly targeted, as well as funding illicit activities with stolen funds and assets. Protection against such crimes is crucial for the privacy and security of your most sensitive client data. In 2023, we expect to see an even more competitive security technologies industry as legislators and manufacturers seek to keep private data safely where it belongs, and out of the hands of nefarious users.
Increased Risk for Fraud
With more users adapting to digital lifestyles at such a rapid pace, inevitable gaps in our current security frameworks could lead to an increased risk for fraud. Ransomware, geo-targeted phishing, and cloud security breaches are expected to increase in 2023, with online banking and electronic transfers being particularly vulnerable. There is also considerable talk—with a growing number of AI advancements entering the spotlight—of concerns that machine learning (ML) could be used to manipulate user likenesses, generate new identity documents that might be harder to debunk upfront and other such issues that come with recent technological advancements. Integrated biometrics and a focus on refining Enhanced Due Diligence (EDD) will be essential to combat these risks.
Digital Asset and Cryptocurrency Exchange Regulation
Cryptocurrency and digital asset exchanges have been under close monitoring over the past several years, and 2023 is poised to implement several watershed regulations to help combat the risks and challenges presented by decentralized banking. In addition to the travel rule, the Markets in Crypto Assets (MiCA) regulation (not anticipated until 2024) puts additional safeguards in place to tie transactions to known persons and give institutions the ability to accurately assess and react to risk in real-time. The Travel Rule and MiCA are most likely the start of a long line of subsequent crypto and digital asset regulations that will continue to evolve—especially as global task forces keep an eye on new issues that come to light over time and as information technology enables new methods to counteract criminal intent proactively.
Stricter Compliance Enforcement
With such prevalent risks arising out of the rapid pace of technological advances and digital user adoption, the time has come for businesses and institutions across the globe to wholly embrace the fact that KYC and AML protocols are far from optional. Failure to comply with existing and future standards carries the threat of hefty fines and can place your client base in significant peril. To avoid the heavy repercussions that come with non-compliance, it is essential to routinely review your processes and protocols and to ensure that you are using the best software available to serve the unique needs of your business.
Stay Ahead of KYC Risks with iComply
At iComply, we know that the costs of non-compliance can be devastating. To help you mitigate risk and stay on top of current legislation, we offer a unique, end-to-end suite of KYC + KYB software that utilizes a modular platform that can be integrated into your workflow seamlessly with minimal downtime.
Learn how you can stay ahead of evolving AML and fraud standards, and discover why iComply is your leading choice for software solutions by talking to our team today!
In today's digital world, streamlined and reliable identity verification is essential for compliance and the protection of vulnerable persons, as well as safe business practices. From validating users conducting financial transactions to ensuring that sensitive...
With the world of financial crime constantly shifting and evolving, navigating illicit activities has become increasingly complex. Two prominent crimes within the financial sector are money laundering and embezzling, and while both do pose significant risk to...
As recent state conflicts have reminded the global market, the realities of conducting international trade and business is not without its fair share of risk and necessary regulation to avoid further harm. Sanctions serve as a form of intervention and protection for...
Organizations must have properly vetted security and identification processes in place to protect their business and clients, particularly to lay a solid foundation for future growth and success.
Know Your Customer (KYC) protocols have become a crucial part of the digital-age customer identification process to ensure regulatory compliance across a variety of standards—from the prevention of financial crimes, reducing instances of money laundering (AML) and counter-terrorism funding (CTF), to the protection of customer data, and more. Know Your Customer due diligence not only ensures you know exactly who you’re dealing with but also establishes safeguards to prevent accidental dealings with high-risk individuals or businesses.
At iComply, we know how crucial it is for organizations to have access to clear, transparent, up-to-date information about their partners, potential employees, and third-party entities. We’re proud to partner with companies within the finance, banking, and back-office services industries to offer an innovative, modular suite of KYC products that makes staying compliant with regulatory standards accessible, effective, and hassle-free.
Below, we’ll explore the importance of KYC in today’s evolving global financial market, as well as the benefits of choosing a vetted regulatory compliance partner like iComply. Read on to learn more!
What is KYC?
Know Your Customer (referred to as KYC) isn’t a necessarily new concept, but modern technologies have significantly enhanced the ways we can acquire information about unknown entities—such as businesses, customers, clients, and prospective employees—as well as the scope of information that is readily available during the due diligence process.
Life moves quickly in today’s digital age—your organization should be equipped with the right tools and assets to properly comply with all related regulatory standards, as well as the best tools available to manage risk assessment for the benefit of all parties involved.
At their core, KYC procedures and technologies are designed to equip you with the knowledge you need to move forward safely, giving your compliance team and clients peace of mind.
Why Does KYC Matter?
Knowledge is power, and operating with a clear understanding of all involved risks where your existing and prospective clients are concerned is an invaluable resource that saves you time and money, and helps you avoid numerous issues in the long run.
In short, if your organization deals with sensitive information—including financial details and personal account information—identity verification is a non-negotiable for data security and privacy compliance, as well as proper risk mitigation practices.
When it comes to preventing fraud and money laundering, and protecting your clients/assets, KYC technology is a vital asset that stands to benefit your business growth by providing valuable insights into and validation of a natural person (NP) or legal entity’s (LE) background by:
establishing a valid customer identity;
evaluating and vetting a customer/prospect’s activities and associations (for alignment concerns); and
assessing a multitude of risks including background details, risk of money laundering, risk of sanctions and judicial orders, previous fraudulent activities, and more.
Building a Foundation of Trust and Transparency
Whether you’re looking to onboard new team members, partner with reputable clients, or simply ensure you have the best compliance practices possible, KYC technology makes it easy to streamline your due diligence processes and reduce your risk, all while saving time and avoiding costly human errors. iComply is pleased to offer superior KYC and due diligence protection through our end-to-end, modular suite of identity verification tools and procedures found in iComplyKYC.
Designed with the highest levels of data quality and security in mind, iComplyKYC includes multiple layers of identity verification and real-time risk assessment tools to make sure your team always has access to the relevant information you need when it matters most.
Through the use of edge computing, the iComplyKYC platform is able to process sensitive user data before it leaves the KYC subject’s device, circumventing concerns of breaches or hacking, and enabling compliance with local data privacy and security regulations including (but not limited to) GDPR, CCPA, PPIA, and more.
At iComply, we believe in providing our banking, finance, and back-office services clients with access to robust technology tools and exceptional data quality, building trust through transparency and enabling better organizational alignment. iComplyKYC allows you to focus on the ins and outs of growing your business while reducing the cost of running KYC protocols by up to 80%, expediting your onboarding and screening, and gaining valuable in-the-moment insights about potential known risks for clients in as little as 17 minutes.
As a modular platform that can be set up in minutes and configured to match workflows with the unique regulations of your jurisdiction, iComplyKYC. Book a demo with our team today to learn more about iComplyKYC and how our platform delivers a truly end-to-end experience for your team and your end-users—all while saving you time and money.
Is your customer due diligence process set up for success?
Ensuring the safety of digital commerce and virtual asset management have become two of the most important points of conversation when it comes to global securities, specifically when it comes to anti-fraud, money-laundering (AML), counter-terrorism financing (CFT), and other such risks that continue to evolve alongside innovative technology. Customer due diligence and Know Your Customer (KYC) protocols are your first line of defense when it comes to protecting your operations, as well as your current clients and partners, against the dangers associated with unknown persons or entities.
At iComply, we understand the value and unique challenges associated with streamlining due diligence back-office processes. We are proud to offer a comprehensive, customizable, modular suite of KYC products that makes staying compliant with all regulatory standards seamless, simple, and hassle-free. Using leading technology like edge computing and advanced facial recognition and identity verification algorithms that allow for real-time results, iComplyKYC is your choice for cost-effective customer due diligence solutions you can trust.
Below, we’ll explore the importance of due diligence in today’s market, as well as the benefits of partnering with iComply. Read on to learn more!
Exploring Modern Due Diligence
Customer Due Diligence (CDD) is hardly a new practice, but as technology and markets continue to advance, the need for more complex, refined, and truly secure methods of identity verification has become paramount. Where manually recording details were once a valid way of staying on top of clients, transactions, and prospective employees, today’s framework is much faster moving and demanding, which presents higher risks than ever to business owners. In order to stay compliant with all due-diligence regulations, as well as to have the best safeguards in place against fraud, CFT, and AML purposes, partnering with a vetted digital compliance software provider is essential. Using highly-refined software like iComplyKYC makes it easy to handle core KYC protocols including:
establishing a valid customer identity;
evaluating and vetting an individual’s or entity’s activities and associations for alignment concerns (e.g. do they have known ties to terrorist or illicit organizations?); and
assessing and establishing a robust risk profile vetted against a multitude of details including background, political exposure, illicit or fraudulent activities, sanctions and judicial orders, and more.
What About EDD?
Enhanced Due Diligence (EDD) is an essential part of your fraud protection plan and is particularly vital for businesses or entities that frequently deal with high-value or high-risk transactions, PEPs, shell corporations, etc.
While standard due diligence will help with basic levels of identity verification, EDD provides a much more in-depth picture that allows you to move forward confidently and keep a vigilant watch over your existing and prospective customers.
Using iComply’s modular suite of KYC programming makes it easy to conduct both CDD and EDD checks quickly and efficiently, with monitoring algorithms alerting you to any sudden changes, important risk events, and need-to-know updates within a matter of minutes.
Why Choose iComplyKYC
At iComply, we believe that safety and security go hand in hand, and having access to quality information you can trust shouldn’t be a hassle. Our world-leading KYC platform is designed to make it easy to stay compliant with a wide variety of international regulations, to properly conduct both CDD and EDD, and streamline your data security protocols in the process.
Through the use of advanced algorithms integrated into each of our products, iComply operates with the highest standards of safety in mind. Our suite of KYC software utilizes edge computing, a highly innovative technology that brings the data processing directly to the user data before it leaves a KYC subject’s device, ensuring your team is equipped to adequately adhere to global data privacy, data security, and data sovereignty regulations including (but not limited to) GDPR, CCPA, PPIA regulations, and more.
iComplyKYC allows you to stay on top of evolving customer relationships and interactions and can help to reduce the cost of running KYC protocols by up to 80%. With integration and setup taking a matter of minutes regardless of your jurisdiction, iComply has everything you need to stay up to date and compliant with comprehensive CDD mandates and best practices.
Book a demo with our team today to learn more about iComplyKYC and how our platform can be used for your specific needs and applications.
Sanctions Update: Russia, Ukraine, and Global Uncertainty
The Update: What Happened?
Uncertain relations between Ukraine and Russia continue to affect many countries engaging in trade including Canada, the United States, the European Union, China, Iran, and Russia. Effective DATE, sanctions have been imposed and will continue by the largest countries doing trade with Russia; most significantly, the United States.
The Background: SWIFT Access Sanction – Russia’s Main Banking System
On February 26th, a call to action was imposed by the European Commission, France, Germany, Italy, the UK and the US to remove specific banks from the SWIFT (system that facilitates financial transactions and money transfers for banks located around the world) messaging platform. The agreement was imposed to break down Russia’s financial system, a method to further hamper the invasion in Ukraine. Additionally, any other banks will be affected as a German government source reported.
The Solution: How iComply Can Help
iComply Investor Services Inc. (“iComply”) is a global compliance software provider that helps compliance teams reduce the cost and complexity of KYC and AML operations while providing a seamless user experience to their KYC subjects. Compliance teams can configure and monitor KYC portals to securely gather, validate, and encrypt client data and documentation before it leaves their device
Our iComplyKYC solution enables access to the most up-to-date client data available and gain a more comprehensive view of risk related to each entity. It also uses AI and deep data analysis to identify new risks and sanctions within 17 minutes, enables management to visualize the volumes and bottlenecks in KYC and AML operations, and it reduces the operational cost of AML risk screening, record keeping, and reporting.
How can iComplyKYC screening help you enhance your sanctions compliance?
Our solution’s capabilities onboard natural persons, beneficial ownership, and legal entities data, saving your organization time and valuable resources. By using iComply’s platform, you can easily scan sanctioned banks listed by regulatory authorities.
Why is this important to my business/organization?
iComply is working with its clients to ensure they have their bases covered from an AML/KYC compliance perspective.
Improve screening accuracy while minimizing false positives
Stay on top of ever-evolving financial crime activity
Ensures GDPR compliance so your organization does not risk being imposed with hefty financial penalties from regulators
Do all your compliance checks and due diligence for you rather than using your own human resources or having to contract with multiple vendors
