Identifying customers in the digital era
Digital identity poses an array of challenges for the consumer and the merchant. The push to perform Know Your Customer (KYC) checks online (or 100 point check as it’s known in Australia) has dramatically increased, with AML/CTF obligated merchants seeking to acquire customers remotely, and in most cases seeking to release the tether to bricks and mortar entirely.
Austrac defines KYC under the AML/CTF legislation as “documentation which sets out a business’s
approach to ensure that it can effectively identify, verify and monitor its customers and the financial transactions in which they engage, relative to the risks of money laundering and terrorism financing”1.
Austrac also allows electronic verification, where “information” and/or “data” may be used in lieu of or together with “documents”.
Until now, there have only been three commercially feasible and legally compliant means to perform a KYC check, with two of the three requiring manual processes. The most common means has included face to face checks performed at the service providers offices (eg. a bank), with the second means being the use of a certified or notarised document posted to a ‘back office’ for manual processing (manual) and the final approach being electronic searches of regulated historic databases including credit files or electoral rolls, in the few jurisdictions that make them available electronically. A consequence of the growth of the internet is that historic electronic searches of regulated databases are struggling to stay secure, as a result of data breaches, social engineering or even self disclosure to social media of what was once a persons ‘private’ personal data.
Historic electronic searches work by taking a person’s name, date of birth and address and comparing that information to a government regulated database register, for example an electoral role. The issue with this process is that a lot of the databases are out dated causing a decrease in match rates. Unsuccessful matches then have to perform one of the manual KYC options, which heavily increase the chance of customer abandonment. Furthermore, merchants are unable to on-board customers in many jurisdictions, such as Cyprus, Malta, Gibraltar and Isle of Man who don’t have government regulated databases to use.
With more than 480 million leaked records last year2 exposing sensitive information, these historic electronic database searches have become defenceless against online fraudsters. The security breaches mean that impersonation is becoming problematic, and these historic database searches are less and less effective.
Together with the increase in Card Not Present (CNP) fraud and chargebacks, industry needs solutions that converge payment with identity to safeguard consumers from these growing impersonation threats.
iSignthis’ ‘paydentity’ solution delivers payments with an automated digital KYC.
iSignthis Ltd is the global leader in dynamic, digital AML/CFT KYC identity proofing. Our Paydentity solution incorporates real time electronic verification to converge electronic payments with remote KYC identification.
This delivers automated customer on-boarding and payments simultaneously. In addition, iSignthis’ unique patented solutions protect online customers whilst assisting merchants with CNP chargeback reversal, whilst providing operators with 100% confidence.
What sets iSignthis apart from other legally compliant KYC providers is our global reach, allowing us to reach 3.5Bn financially included persons, located in over 200 countries. With our fast and flexible on-boarding process that takes place post check out, we ensure high conversion rates whilst avoiding customer abandonment. Our truly unique patented process generates an up to date, live KYC data with no manual processes, allowing an automated online KYC workflow in 3-5 minutes. We are also able to provide real time analytics, as well as sanction, PEP and fraud screening. iSignthis meet and/or exceed regulatory compliance with our Digital KYC solution whilst also offering solutions in Card Not Present (CNP) fraud protection and Strong Customer Authentication.
If you are interested to receive more information about iSignthis please get in touch: [email protected].
1 http://www.austrac.gov.au/elearning/pdf/intro_amlctf_know_your_customer.pdf
2 http://www.itgovernance.co.uk/blog/list-of-data-breaches-and-cyber-attacks-in-2015-over-275-million-leaked-records/
