UK-money-laudering-news-image

UK’s Regulatory Agencies not Coming Slow Against Money Laundering

HM Revenue & Customs carried out an extensive investigation on the UK’s real-estate agencies to discover several breaches in the country’s anti-money laundering regulations

A list by the agency has been disclosed that includes the name of Landmark Sales & Lettings Limited in Reading which has failed to carry out due diligence protocols and timings of customer verification. Due to these breaches, the company was fined £5,250 as a penalty. Another agency in Wimbledon in London, Robert Holmes, was fined £6,591  for failing to have proper policies, procedures, controls, and due diligence. Before that, a money transfer business MR Global was also fined £23m

Deputy director at HMRC’s fraud investigation, Nick Sharp, said, “Money laundering is not a victimless crime. Criminals use laundered cash to fund serious organized crime, from drug importation to child sexual exploitation, human trafficking, and even terrorism. We’re here to help businesses protect themselves from those who would prey on their services. That includes taking action against the minority who fail to meet their legal obligations under the regulations as this record fine clearly shows.”

The HMRC’s list only made the names of four companies and two agents public. Guild Property Professionals say that this is a warning that the industry must strengthen its anti-money laundering strategies and no matter what the size of the business is, the firms must know every single customer they deal with in order to avoid any financial damage or reputational damage. 

The firms must ensure their policies even if they are using electronic means of compliance. They still have to have a business risk assessment and train their teams with risk management. Guild Property Professionals also says that the firms still need to have a process for ongoing customer due diligence – and for every single seller or buyer they must be able to demonstrate they have completed a risk assessment; completed verification checks, checked on PEP and Financial Sanctions status – all before a business relationship commences”

Philline Bank

Philippine Banks Struggle to Comply with AML Regulations

Philippian banks and financial institutions are struggling with compliances regarding the anti-money laundering regulations and mandatory credits to agriculture reforms. The Central Bank of Philippine, Bangko Sentral ng Pilipinas (BSP) reports that banking groups face difficulties complying with the Republic Act 10000. 

Commercial Banks, Domestic Banks, and Foreign Banks, as well as thrift banks, have all declared these laws to be the most challenging to meet. According to the law, there should be a compulsion in credit allocation in Presidential Decree 171 due to which 15% of banks’ total funds that can be loaned are to be put aside for the agriculture sector. The agrarian reform beneficiaries should be allocated by 10%. 

The banks that have failed to comply with these regulations have faced penalties as well. Around P10.3 billion worth of fine has been imposed on the banks that did not comply with the regulations. The BSP said, “Nonetheless, penalties have been collected from banks which have failed to fully comply with the mandatory agri-agra credit allocation.”

The BSP also said that banks are also required to comply with regulations regarding credit risk management, anti-money laundering, operational risk management, and risk management information technology. The banks have declared this to be the most challenging area for them in regards to compliance laid out by The Central Banks’ regulatory framework.

Technology risk also remained as one of the risks common to banks due to the increasing support on technology-enabled solutions. Likewise, financial market risk transpired as one of the risks common to thrift as well as rural and cooperative banks,” said The Central Bank.

austria

Austria- The Growing Hub of Cryptocurrency Approves 18 Operating License

Financial Supervisory Authority like FMA of Austria received requests from forty digital asset providers for the license for regulatory registration to operate their crypto wallets. Out of which, 18 firms have been approved for the regulatory registration. 

Under the country’s new AML (Anti-Money Laundering) regulations, every crypto firm must acquire a license to operate. However, the derivatives regarding crypto-assets do not come under these regulations, but they must comply with ESMA’s restriction.

Until last year, the crypto service providers were only operating in the transitory regulations laid out by the AML Act. This act provides a set of rules for crypto-related business. Those hoping to provide crypto-related services must acquire authorization from the FMA.

This rule does not only apply to exchanges regarding crypto-to-crypto and fiat-to-fiat but also applies to digital wallet providers. The law states, “exchange one or more virtual currencies against one another, transfer virtual currencies or provide financial services for the issuance and selling of virtual currencies.”

The applicants of the license must prove to Austrian Financial regulators that they have the capability to run the business. Those firms that fail to comply with the financial regulations set out by the FMA will be given legal notice and a warning of penalties. FMA can impose a fine of €200,000 on businesses related to crypto that have not registered with the country’s regulators. The regulators said, “The FMA pursues a zero-tolerance policy in relation to money laundering and terrorist financing. In relation to the risks associated with virtual currencies, another loophole was closed last year with the introduction of the requirement for companies active in this area to register.”

FMA has also made it clear that most of the digital asset providers that applied for the license operate electronic exchange platforms and wallets. 

newsimages

BitGo settles with US Treasury; Sanctions Violations will Cost $98,830

The U.S. Treasury has settled with BitGo over costs that it helped users in authorised divisions to transact utilising its crypto wallet services between 2015 and 2019.

BitGo, which provides crypto wallet services in Cuba, Iran, Syria, Sudan and Crimea, failed to comply with Know Your Customer (KYC) standards, according to the US Treasury’s OFAC department in a statement on December 30.  

“BitGo declined to execute due discretion or care for its penalties compliance obligations when it failed to deter individuals allegedly located in authorised jurisdictions to open accounts and transfer virtual currencies through its platform as a consequence of a failure to implement appropriate, risk-based sanctions compliance controls.”

The Treasury formulated that there were 183 “possible violations” of its diverse sanctions applications, adding up to just above $9,000 in transactions. They maintain the rank of “apparent” as the allegations are based on the internet protocol addresses from which users obtained BitGo hot wallets.

In alleviating circumstances, the Treasury stated that:

“BitGo covers all records, including “hot wallet” records, against OFAC’s Specifically Indicated Nationals and Blocked Persons List, including blocked cryptocurrency wallet addresses identified by Office Foreign Asset Control.”

The agreement will cost BitGo $98,830. Given the hawkishness of OFAC’s policies, the arrangement is approximately lenient, even though the actual amount transacted was less than 10 per cent of the penalty. The civil fine had the matter gone to court, would have been between $183,000 and $53 million.

But today’s performance is completely essential for other crypto organizations. The statement makes apparent that Office of Foreign Asset Control will be examining more closely at crypto servicers:

“This agreement underlines that businesses indulged in providing virtual currency services such as all monetary service providers should understand the penalties risks linked with providing digital currency services and should take steps vital to reduce those risks.”

newsimage

E-krona – Rising Cashless Sweden Sights Virtual Currency

Less than 10% of all transactions are done with cash in Sweden, according to an analysis by its central bank.  

Sweden’s corporate sector will initiate examining the feasibility of having the country transfer to a virtual currency, marking another move into the unrevealed world’s most cashless community. 

Per Bolund, monetary exchanges minister said that a survey will be initiated on Friday and is hoped to be done by the end of November in 2022. Previous chairwomen of the parliament’s finance committee, Kinberg Batra, will conduct the investigation. 

Sweden is among the leading nations in the world to propose virtual money. Its central bank is already controlling a pilot scheme with Accenture Plc to propose an automatic krona based on the identical blockchain technology that supports virtual currencies like Bitcoin. 

Governor Stefan Ingves announced in October that any settlement on whether to originate an e-krona must be held at the constitutional level or not. 

As stated by the government, Bolund declared that 

“It’s vital that the digitised currencies market operates securely, and that it’s accessible to everyone. Relying on how a virtual currency is formed and which technologies are used, it can have severe effects for the complete monetary system,” Bolund said. 

The Riksbank examined in October that Sweden’s currency usage dropped to its lowest extent ever, as the COVID-19 situation accelerated the change away from treasury notes and cash. Less than ten per cent of all transactions are made with currency in Sweden, as stated by the bank’s survey.

brexit

Brexit to Change Sanction and Money Laundering Regulations in 2021

In 2016, the United Kingdom decided to part ways with the European Union (EU). After its preparation for a future without being a part of the EU, companies operating in the United Kingdom are concerned about sanctions. December 31, 2020 is the last day for the United Kingdom to decide if it’s a deal or no-deal brexit. The UK was in a transition period which is also about to end with 2021 just a few days away.  The decision is not yet clear, raising millions of concerns every day. 

The particular concern of all organisations is sanctions and KYC/AML regulations that will greatly impact them. Parting ways with the EU will not only change the UK’s identity but it will also reshape the future of regulations. December 3, 2020 was the last date to enforce the sixth anti-money laundering directive (6AMLD) by the European Union, but what will the UK do after deciding an independent future? Being no longer a part of the EU means the country needs its own rules and regulations. For the same reason, the Sanctions and Money Laundering Act 2018 will be enforced in the country. 

Sounds great, but how will companies manage cross-border trade with the EU states? There are numerous questions that lack answers. However, we have managed to gather information that might suffice for your needs. Read this blog to know the impact of Brexit on KYC/AML regulations in 2021. 

Brexit Impact on KYC/AML Compliance

The EU announced 6AMLD to be imposed latest by June 2021. Given the rise in criminal activities due to the pandemic, the directive was imposed in December 2020. Currently, the UK has to follow the directive, but this will end as soon as the transition period ends. What next? In 2021, the Sanctions and Money Laundering Act of 2018 will be enforced. The Act also states the majority of the points that EU’s 5AMLD mentions. 

Following the end of the UK’s transition period, it will be referred to as a third country. Due to the fifth and sixth AML directive, there are high standards for mitigating potential risk involved in transactions and other business relationships. Enhanced customer due diligence checks are mandatory for dealing with third countries. So, businesses in the UK have to undergo EDD checks to deal with the EU members. However, the procedures are likely to become more cumbersome in the future. 

No Deal Brexit and Money Laundering Laws  

No-deal Brexit means the United Kingdom and European Union are not on the same page for the agreement. This is not good news because stepping out of the EU makes the UK a third country and there is no going back. 6AMLD is not a major concern for the country because the 2018 Act already complies with the majority of laws mentioned in the sixth AML directive. For certain money laundering offences, regulatory authorities in the UK have announced 14 years of imprisonment, which is more than what 6AMLD imposes. 

infographic

Highlights of the Sanctions Act 2018

Since the Sanctions and Money Laundering Act of 2018 will be enforced in the United Kingdom, here are some of the main points of the Act that might interest you. 

  • The UK will continue to implement UN sanctions to meet foreign policy objectives and national security. 
  • Ensure updated anti-money laundering and counter-terrorist financing measures.
  • Assist enhancements in the UK’s domestic security and comply with the international standards. 

Role of Companies in Complying with New Laws

Brexit is not only a way of choosing separate ways for the UK, but it will have a serious impact on businesses too. The corporate sector is bound to suffer from the consequences. The plethora of changing regulations is the worst change of all. Businesses have to reconsider their KYC/AML compliances. Adopting the 6AMLD is an easier choice for businesses in the UK.

Since businesses are confused about which regulations to follow and which one to pass, fraudsters are working day and night to find a loophole in this situation and execute their malicious plans. To reduce the uncertainty, new Sanctions List and OSFI Consolidated Lists should be used for screening from January 1, 2021. Companies can figure out better ways to comply with these regulations and ensure robustness of the KYC/AML solutions

How Can Digital KYC/AML Solutions Help? 

Businesses operating in the EU and UK have to face a lot of problems in their Know Your Customer (KYC) and Anti-Money Laundering (AML) systems. Due to differences in rules and regulations after Brexit, the UK has to follow the Sanction Act 2018 while EU states will continue to follow the 6AMLD. Both the laws have different sets of rules and regulations that might make it challenging for businesses to perform seamless customer onboarding checks. Fortunately, digital AML/KYC solutions have been satisfying business needs for a while now. No matter which laws a state has enforced, digital AML screening and e-KYC ensure that your business complies with the regulations. 

Brexit will be a game-changer for the EU states and the UK. Before things go out of hand, it is better that digital KYC and AML screening solutions are utilised. 

Read more about KYC: A Comprehensive Guide to KYC and AML Compliance in the UK

It All Narrows Down To…

The United Kingdom’s decision to part ways with the EU has greatly impacted different sectors of the country. All the companies are concerned about the uncertainty brought by changing regulations in the country. Financial criminals are figuring more sophisticated ways for their malicious intentions and loopholes in the regulatory system will bring ease for criminals. However, the corporate world can employ robust KYC and AML systems backed by AI models. No matter what sanctions list or regulations the country follows in 2021, digital KYC/AML checks can assist businesses in complying with laws. 

Talk to our experts and know more about digital KYC/AML solutions. 

covid-vaccine-news-image

FBI Warns About the Emerging Fraud Related to COVID-19 Vaccine

The Office of Inspector General, U.S Department of Health and Human Services, FBI, and Centers for Medicare & Medicaid Services is concerned about the surge of crimes and fraud with regard to COVID-19 vaccines. They are warning the public and relevant entities to now be cautious more than ever. 

A number of complaints have been received by the FBI, HHS-OIG, and CMS about the fraudsters using COVID-19 vaccines to devise various schemes to defraud people. Fraudsters have been able to acquire personal information from people along with their money. These agencies are tirelessly working with law enforcement authorities to prevent all sorts of frauds. 

The types of fraud that can occur are unsolicited emails claiming to be some official medical office or insurance company and will gather personal information for “vaccine registration”. Fraudsters can distribute fake vaccines to various hospitals as well as pharmacies while claiming this vaccine is approved by FDA. They can offer to sell vaccines through shipment/delivery and will claim payment of the deposit fee. They can pretend to be government officials gathering personal data of the people for vaccines.

The fraudsters can also take money to put people on the waiting lists for the COVID-19 vaccine. The world is already in desperate need of a cure for such a lethal disease and criminals are exploiting their fears. 

In order to fight these cybercrimes, the FBI has laid out some guidelines for citizens. They have warned about the rise in identity theft and have requested people to not give out their personal information to anyone at all including phishing emails. The citizens and companies are asked to use two-factor authentication, biometric authentication, or hardware tokens whenever possible. End-users and business organizations are made aware of the malware emails. The use of the FDA’s website is recommended for any vaccine-related updates. 

Study Reveals

Study Reveals Alabama to be the Center for Identity Theft and Fraud

According to the latest study, Alabama has become the state with one of the highest rates of identity theft and fraud. Alabama has now ranked in the top 20 states with fraudulent activities.

The study revealed that around 11,762 data breaches have occurred from 2005 to 2020, affecting several popular companies resulting in compromising the personal information of many Americans. The total compromised data record estimates up to 1.6 billion.

This year, the COVID-19 pandemic has affected several business sectors. The study states that due to the pandemic, identity theft and other scams have increased in regard to federal stimulus payments issued.

It has also been noted that some of the citizens of the USA are more vulnerable than others and they are expected to become the victim of identity theft more than the others.

In order to discover the risk rate of fraud across America, all the states and the District of Columbia were examined and compared through 14 key metrics. Some of the metrics examined were, ‘Data Disposal Laws by State’, ‘Persons Arrested for Fraud per Capita’, ‘Average Loss Amount Due to Online Identity Theft’, and ‘Identity-Theft Complaints per Capita’.

The state of Florida has been declared the number one state to be the most vulnerable state. It has the highest rate of fraudulent activities, especially identity theft. The least vulnerable state was Wyoming. 

industries leaders

5 Industry Leaders Shared Their Insights on the Future of Biometrics

Modern technology has brought several conveniences to life. From the ease of working at home to streamlining organisational benefits, the benefits of technology are hard to count. In the 1800s, the first biometric system for identification was introduced. Today, it is one of the best ways of verifying the identities of people. Government agencies are using it for maintaining records of all the residents, whereas businesses are using it as an employee attendance mechanism and security protocol. With time, biometric authentication has emerged as a powerful tool for security and fraud prevention as Artificial Intelligence has enhanced its efficacy. 

According to reports from MarketWatch, the biometric software and identification market will reach a value of USD 62,850 million by the end of 2026 which is currently USD 30,510 million (in 2020). The CAGR (Compound Average Growth Rate) is expected to be 12.8 percent between 2021 and 2026. Biometric authentication is not restricted to fingerprints only. It entails a lot more than that. We contacted some experts to know their thoughts on the future of biometrics. . Few of the responses have been added in this blog that might interest you.

Biometric Authentication

Types of Biometric Authentication

As mentioned earlier, there are various types of biometric verification that can be used for different purposes. Here are some of the types that are commonly used in different sectors along with a few benefits. 

Palm Recognition 

Palm recognition verifies the geometry of the hand of an individual. This is one of the fastest ways of biometric authentication and ideal for businesses that have tons of customers stopping by every day. Touchless kiosks at the airport are a classic example of palm recognition. Just like fingerprints, arrangement of veins in palms is different in every person. Verification through palm at the airports is a great way of dealing with identity thieves and human traffickers. It also improves passenger authentication procedures by verifying passengers without any assistance from airport security staff. 

Face Verification 

This type of biometric verification verifies the face of individuals using artificial intelligence models. Liveness detection, 3D mapping, depth analysis, and skin texture analysis are some of the techniques used for face recognition. During identity verification, the end-user provides government-issued ID documents and a selfie for verification. Face in the selfie is checked with 3D depth mapping and liveness detection techniques to ensure the presence of an actual human being on the other side of the screen. Also it is matched with the image on the document to authenticate the identity of the end-user.  

Fingerprint Verification

The traditional fingerprint verification is still used in different regions of the world. Globally, this type of biometric authentication is used by 57 per cent of the companies. You can now easily find a fingerprint scanner in smartphones. Businesses consider it as a robust measure for verification and ideal for detecting live presence of the person. Although the COVID-19 pandemic has changed the game and people are reluctant to use these machines for biometric verification. This shift in demand has contributed to the growth of other types of biometric technologies, especially face recognition. 

rule of companies

Industry Leaders’ Insights About Biometric Authentication

From journalists to C-suite individuals from different sectors, everybody trusts biometric authentication for verification. We received varying perceptions of professionals of different sectors. A few responses that might help you peep into the future of biometrics are included in this blog. 

Added Security to Monitor Employee Activity 

Financial Journalist of LetMeBank, Emily Deaton said,

“As a journalist, in my opinion, biometric authentication helps a business by providing added security. A number of firms are putting biometric verification to add an added layer of security to both digital and physical records. For example, someone may be asked to use a thumbprint scanner prior to logging in to a computer giving them passage to sensitive medical or financial records. Facial recognition systems may monitor where employees go and relate this to badge access records. These systems may recognize when person A is in the bathroom but their badge is used to enter a server room. Or it may notice when somebody has left the building but their badge has been utilized to open a storeroom or laptop in the building.”

Undoubtedly, biometric authentication adds an extra layer of security and you can keep an eye on the employees. It can help you control the number of internal incidents. Moreover, confidential information should not be accessible for anyone who enters the company. With the help of face or fingerprint verification, you can ensure security of the information. 

Read more: Banking on Biometrics: The Future of Customer Authentication

Fraud Prevention in the Gaming Sector

We also received a response from the gaming sector and Catherine from ASAA88, an online gaming platform, says,

“Well, utilising biometric authentication can help prevent fraud in the online gaming business. Biometric verification like fingerprint recognition helps identify fraudsters easily. Also, it helps protect the audience against scams that involve duplicate ads to obtain fees. We are looking forward to cost-effective biometric authentication technologies like face recognition so that we can secure the privacy of our audience and save them from scams and frauds in a better way.” 

Frauds are increasing and this pandemic has fanned the flame. There has been a significant rise in criminal activities and the gaming sector is the target for identity theft and other frauds. Apart from identity fraud, online gaming is one of the best places to layer illegally earned money. Biometric authentication is already helping this sector, but in the future, this measure can help in identifying criminals within seconds and secure other players of the platform. 

Biometric Verification for Secure Digital Payments

The CEO of VSS Monitoring, Dusan Stanar, believes that biometric authentication can be used in many other areas. It’s not just about making digital payment convenient, but it is also about easing other procedures like employee verification in companies. Let’s take a look at what Dusan has to say. 

“As the CEO of a company, in my opinion, the best way biometric authentication helps a business is by providing speed up payment processing. The pure simplicity along with speed describes why a growing number of people across the world are paying for lunch with a thumbprint. Similar technology can be used to let employees pay for items in a company store. You are simply following the same pattern set for digital payments frequently used by customers. This is apart from the initial trials trying to substitute pin numbers with facial scans.”

Thoughts of Victor Fredung, CEO of Shufti Pro

Shufti Pro is providing state of the art face verification and biometric authentication services. Victor Fredung, the CEO of Shufti Pro, shared his thoughts on the future of biometric authentication and said, 

“Biometric authentication is one of the ideal ways of knowing your customers during the onboarding process. With the help of face verification, it gets a lot easier to combat spoof attacks and deep fakes. As far as the future is concerned, the market is booming and with the rise in fraudulent attempts to exploit businesses, it is not wrong to say that biometric authentication will be the foundation of fraud prevention.” 

Summing it Up

Biometric authentication is one of the ideal ways of dealing with fraudsters. It gives organisations an edge over criminals, because different types of biometrics make fraud detection and prevention easier. With the booming market, the future of biometric authentication is full of more automation and robustness for businesses. Since fraudster attempts are becoming more sophisticated, this technology will experience more advancements to ensure efficacy of the identity verification procedure. Different types of biometrics will be used for identification with an increased use of this technology for other purposes as well. 

Want to know about Shufti Pro’s biometric authentication? Get in touch with our experts.

On premises

On-Premises vs Cloud Services – Two Sides of the Same Coin

With the advent of technology, industries are streamlining all their processes and ensuring higher levels of productivity every day. On the contrary, fraudsters are also benefiting from technology and developing better strategies for executing their evil plans. No matter how hard businesses try, there is always a loophole for criminals to fulfill their malicious intentions. Nevertheless, there is one way of dealing with problems – identity verification. AI-powered Know Your Customer verification is an all-in-one solution for your problems. With the help of KYC, you can verify every individual during the onboarding process and ensure that none of the fraudsters make their way through the company. Moreover, you get many options within the KYC verification like face verification, document verification, and address verification to make the process as robust as possible.

Although businesses are employing KYC checks, criminal activities are continuously increasing. Identity theft, data breach, money laundering, and terrorist financing are some of the fraudulent activities that are on the rise. Unfortunately, the majority of these crimes have been reported due to lacking customer verification procedures in companies. 

How can you enhance the security of your business? There are two ways of increasing security of your enterprise; cloud service and on-premises service. Let’s take a deeper dive into both of these services.

Read more: On-Premises Identity Verification – A Solution to Prevent Data Breaches

Benefits of On-Premises Service

On-premises service has several benefits for all the businesses. Cost efficiency, better security, and enhanced customer experience are few of the most important ones. Take a look at all of these. 

Cost-Effective

Unlike other solutions, this service offers cost-efficiency because you only have to invest in the software once. There are no additional costs and maintenance is also not an issue for the experts. You are already investing a fortune on customer onboarding and identity verification. Maintaining records will cost you a little more than your expectations. On-premises identity verification solution can save you from spending extra bucks on maintenance.  

Enhanced Security

The idea is to keep data secure and an on-premises service allows you to add layers of security to keep your customers’ data secure. All you have to do is opt for an on-premises identity verification solution and the tech team will install the software in your server. The rest is all on you. You get complete control over the data and its security. 

Improved Customer Experience

Since you have control of all the customers’ data, you can access it anytime, anywhere. Your employees can collaborate easily. Ultimately, you can cater to the queries of customers immediately without waiting for data access. Providing your customers a better experience will not be a problem at all.

OnPremises

What is Cloud Service?

Cloud service refers to the use of remote servers for real-time customer onboarding. Generally, cloud IDV service uses committed servers for storing customer verification data. These servers are secured through layers of encryption and firewalls. Shufti Pro adheres to GDPR data protection standards for data protection. 

Benefits of Cloud Service

Cloud service has already taken over the world with its tremendous benefits. From increased collaboration to data protection, there are so many advantages of using cloud-based identity verification solutions. Take a look at some of them in detail. 

Greater Communication 

Collaborative environment works best for organisations in the digital world. Cloud service ensures a high level of collaboration due to shared networking. This will provide greater communication opportunities to all your employees. 

Regular Backup

With cloud storage, your identity verification data is not only available for effective KYC compliance, but you have open access to your data on our servers. This will help you maintain extensive records of every customer that interacts with you. Edit download or backup verification data and proofs with interactive back office. Try now. 

Better Storage 

Storing data gets easier when you use cloud services. The data of verifying every individual’s identity demands extra storage. With cloud based IDV solutions , you get plenty of storage where verification data of every customer is updated. 

Industries that Need On-Premises Identity Verification Services

Almost every sector has become the target of fraudsters and every company needs a solution to tackle them. With the help of on-premises service, different sectors can experience full control over their customer data. According to reports from Statista, following three sectors have been the target of fraudsters and need on-premises service to stay secure in the future. 

Healthcare Sector 

As of the 2020 reports from Statista, the healthcare sector has lost approximately USD 7.13 million due to data breaches. Stolen patient records are used to execute billion dollar medical frauds, such as false health insurance claims, over the counter medicine scams, illegal purchase of controlled medicines, etc. are increasing every day. With the help of on-premises service, healthcare facilities can keep the record exposed to a few employees. This means fraudsters and any external entities cannot access it, which will ultimately reduce the risk of breaches and false insurance claims.  

Read more about the healthcare sector: Know Your Patient – A 360° view of patient identification in healthcare

Finance Industry 

Reports from Security Magazine indicate that hacking and malware are the primary cause of data breaches in financial institutions and the ratio increased to 74.5 per cent this year. According to reports from Statista, there will be a 43 per cent increase in identity fraud over the next 12 months. Hence, the finance industry needs a robust solution to onboard trustworthy customers and to achieve customer trust.. Fortunately, an on-premises service is there to help. 

Some countries have stringent KYC and AML laws which don’t allow sharing customer data with third-parties, even for verification purposes. 

Government Agencies

Government agencies hold a lot of data for insurance claims, pension funds, employment funds, etc. The information can be used for identity fraud if accessible. On the other hand, many countries have stringent rules for not sharing confidential information with anyone. Hence, an on-premises service is ideal for government agencies. 

Summing It Up

Advanced technology is not only helping businesses in making all processes more efficient but it is also assisting fraudsters in achieving their goals. The finance, healthcare, and government agencies are the primary targets of fadusters and there is a need for a solution that can prevent identity frauds. All businesses have two ways of customer verification; cloud storages and on-premises service. Each of these solutions has its benefits, but the on-premises service adds an extra layer of security. 

Shufti Pro’s on-premises service is a one-time installation that provides you multiple layers of security along with maintenance options to your tech team. Furthermore, you get complete control of your customers’ data. 

Learn more about the on-premises service from our experts.

KYC

Crime on the Rise, Mutual Fund Investments Need KYC

Know Your Customer (KYC) is to be implemented on all financial market-related investments. In order to make any investments, the mutual funds need to make sure of the KYC regulations in regards to investors.

L&T mutual funds have lost 49.83 lacs to fraudsters while SBI mutual funds have lost 10.96 lacs to fraudsters.  

This standard process must be implemented on all mutual fund investments across fund houses. The records of KYC are managed by KYC Registration Agencies, these agencies are registered by the Securities and Exchange Board of India. The KYC process for a mutual fund is allowed to be carried out online or at any KYC Registration Agency (KRA) office. 

In order to check if the KYC regulation procedure has been completed before, one can go to the fund house website or KRA website and enter PAN details. KYC regulation status appears once the PAN details are entered. The status includes whether it’s complete or not, or any modifications are required or not. 

It is highly recommended to keep the records like mobile number, bank statement, address, etc. updated in the KYC records details. If any changes are required, the KYC details change form must be submitted with a copy of all the important documents. 

Method of video KYC has now been allowed as well. The mutual fund in investment can now comply with KYC regulatory demands through the method of video-based identification interviews. If the investor chooses video KYC, the investor is required to upload scanned images as identity proof, address, and signatures. However, if they choose to do the KYC process offline, they must fill a KYC form and submit proof of identity with the address. In case of eKYC, the maximum amount per annum per mutual fund is limited to INR 50,000 

face verification

Face Verification – Trends and Benefits for the Corporate World in 2021

Face verification technology has gained popularity over the past few years. A biometric authentication measure that is helping many sectors across the globe in different ways. Some sectors use it as an attendance marking system, whereas some countries use it for making digital banking convenient. However, there is one big benefit of face verification that every corner of the world enjoys i.e. identity verification. 

Face recognition technology came into existence during the 1960s. Ever since it has been used for many different purposes like employee management. During the last few years, face recognition became a face verification measure that is now considered as a robust mechanism for identifying fake identities and preventing spoof attacks. Biometric face verification is now backed by artificial intelligence that gives it a competitive edge over all other verification measures. Due to its robustness, the market size has increased and analysts are predicting a significant rise in the next few years. According to a report from Statista, the face recognition market size was USD 3.9 billion in 2019 which will go upto USD 7 billion by the end of 2024. On the other hand, there is another report from PRNewswire that estimated that the global facial recognition market has a projected value of USD 10.9 billion by the end of 2025 with a registered CAGR of 17.6 per cent between 2020 and 2025. Predicting the massive increase in this market, 2021 is expecting some astonishing trends and the benefits of face verification have to be explored too. Keep reading to find out. 

Face verification now deploys a number of AI algorithms that have enhanced the efficacy of the software. Your business needs this verification to prevent a variety of frauds. Some of the common frauds that you can prevent include spoof attacks, deep fakes, fake identities, and identity theft. 

Face Verification Trends in 2021 

2020 brought many challenges for all the businesses due to the coronavirus pandemic. The majority of sectors are concerned about the post-COVID-19 scenarios of their enterprises. One thing is certain that fraudulent activities will increase. AI-powered face verification will definitely be an ideal solution for businesses in 2021. Let’s dive deeper into the 2021 trends in the face verification market. 

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Face Recognition at Airports

Recently, Brazil announced that an enhanced face verification technology will be used at the airports that could identify passengers with their face masks. Currently, 18 airports in the US are using face verification systems, according to a report from Reservations. Face recognition and verification at airports have become common because criminals use forged identities to escape. Next year, this trend will gain more fame for not only preventing fraud but ensuring that all passengers have the right documents. Also, face recognition kiosks will be the new trend in 2021 that will allow airport authorities to verify passengers before giving them boarding passes. 

Secure Customer Onboarding at Hotels 

Hotel management will be using this technology for interacting with guests. This will help them identify minors who are using fake documents for their activities. Moreover, face verification will allow the hotel staff to identify criminals and report to the relevant departments on time. Amid other sectors, the hotel industry will be making the customer onboarding process secure as well. 

Banks will Fight Criminal Activities with Face Verification

The banking sector is the primary target of all criminals for their illegal gains. Money laundering activities have increased and reports from UNODC and Europol state that two to five per cent of the global GDP is consumed in money laundering. The staggering numbers are encouraging the banking sector to employ face verification. This will help them to identify criminals with fake identity documents or people who have been highlighted in different sanction lists. 

Chargeback Reduction in E-Commerce Platforms 

A report from Statista estimated that 49 per cent of the people agree that face verification must be employed by retailers to catch shoplifters. The retail sector also faces many issues, especially chargebacks and there are no competent solutions to solve them. With the help of face verification during transactions, businesses can anticipate fraudulent activities. Amazon is already using this technology for transactions, and many other eCommerce businesses will also use it in 2021. There will be a significant reduction in chargebacks and other financial crimes.

Learn more about chargebacks: What are chargeback frauds and what do they mean for businesses?

Benefits of Face Verification 

The growing face verification market has numerous benefits for different sectors, including retail, eCommerce, finance, insurance, and travel sector. Let’s take a look at some of the most important advantages of this technology.

Face Verification

KYC/AML Compliance 

The FATF has enforced some laws on every sector to perform Know Your Customer (KYC) and Anti-Money Laundering (AML) checks during customer onboarding. The idea is to prevent fraudsters from entering businesses and causing troubles. With the help of face verification, you can identify spoof attacks and deep fakes in seconds; therefore, your KYC verification system becomes robust. It gets convenient to comply with the regulations. 

Fraud Detection and Prevention 

Face verification cross-checks the individual’s photo with the image on the government-issued identity document submitted to the business. In case of forgery, the verification is declined and you can anticipate fraud before any damage. Ultimately, you can take necessary measures to prevent fraud in the future.

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Secure Customer Onboarding 

All businesses want to make their platform credible and securing the onboarding process is one way of achieving this goal. Employing face verification checks make sure every individual is verified and fraudsters are filtered before they can cause any trouble, the entire onboarding process becomes secure and your customers will feel secure too. 

Key Takeaways 

The face verification market is booming and the years ahead are expecting a rapid growth as well. Different reports have estimated that the market will grow up to USD 7 billion by the end of 2025 with a CAGR of 17.6 per cent. The trends for 2021 include a rapid shift of the identity verification market toward face verification. With the assistance of artificial intelligence, the technology has become more efficient in fighting fraud. It can surely help companies in complying with the KYC/AML laws from the regulatory authorities. 

Shufti Pro’s face verification is supported by artificial intelligence that can help your business develop a secure customer onboarding process. Our face verification solution results in 98.67 per cent accuracy and requires only 15 to 60 seconds for completing the process. 

Learn more about the real-time face verification service from our experts.

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US Regulators Worried about the Rise in Synthetic Identity Fraud

Synthetic identity fraud, a financial crime in the USA, is on the rise. This has concerned the United State’s regulatory bodies as banks are struggling to fight the frauds and find new ways to tackle the new theft techniques that can steal the data of individuals.  

There have been different estimations regarding the range of fraud but almost all show that the issue is growing. A report by Auriemma Group analyzed an information firm about the payments and loaning industry. It discovered that the USA lenders have faced the loss of $6 billion through synthetic identity fraud. Whereas, a consultancy called McKinsey has estimated that the frauds related to financial sectors account for ten to fifteen percent of the charge offs. 

This growth in fraud has become a part of the United State’s government’s Paycheck Protection Program. People have been making synthetic identities to get loans from the program made to support those who have been most affected by the economic fragility due to pandemics. 

Jim Cunha, a senior vice president of Federal Reverse Bank stated in a case study: “Synthetic identity fraud is not a problem that anyone organization or industry can tackle independently, given its far-reaching effects on the U.S. financial system.”

Bank regulators in the USA are concerned about synthetic identity theft and they have been working with different technology firms that can help them provide a more reliable identity verification solution.

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Pension Fund Fraud and the Role of Employee Identity Verification

Old age is the scariest phase of life for everyone and organisations find it a big challenge to cater to the needs of their old employees. They cannot be retained as permanent employees after 60, but there is a gratifying reward for the employees after retirement – the pension fund. People spend years to save money for their old age and spend it peacefully, and companies fully support their employees, but is it just rainbows and unicorns for firms? With good comes bad! Pension funds are also a way of illegal activities and fraudsters are coming up with different ways of stealing pension funds from organisations.

If your company supports the retired employees, make sure you take all possible measures to keep the funds safe and readily available for them. As weird as it sounds, criminals do not leave any way of gaining financial benefits and your firm’s pension funds are not at all safe without any security measures taken. The details about pension fund fraud, how to identify them, and how to prevent them have been discussed in this blog. Keep reading to find out.

Conflicts between employer and employee result in the first type of pension fund fraud. The claim mentions that the employer is not providing the pension benefits or denying that there were any retirement benefits at all. 

In the second scenario, some fraudulent activities, usually identity theft, result in loss of funds and these attempts are common now. 

Read more about identity theft: 5 types of identity theft fraud and How businesses can prevent it?

Some Examples of Pension Fund Frauds

Pension-related fraud is increasing and The Times reported that investors lose £4 billion every year. The numbers are unknown in the year 2020. Let’s see how the COVID-19 pandemic will end up for the retired people. Take a look at some examples of pension fund fraud that your company might encounter. 

Employees’ Fraudulent Activities for Pension Fund

Conflicts often end up in serious issues for all the employees in an organisation. Beware of the following activities in your company to avoid any pension-related fraud.

  • One of the employees representing false numbers for paying the retiree. 
  • Misrepresenting the information regarding retiree’s transferable pension rights and benefits.
  • False information about employee’s contribution to the retirement fund. Sometimes, retirees also communicate false information to get extra benefits. On the other hand, rivalry results in representing lower amounts so that the retiree gets the least pension funds.   
  • Tax-related issues can be associated to create problems in the release of pension funds. 

These are some issues that can be audited so that none of your retired employees feel distressed or face challenges for spending their lives peacefully. 

External Fraudulent Activities for Pension Funds

Amid the employees’ activities for messing up with the pension funds, fraudsters fight till the last breath. Here are some examples of fraudsters’ attempts to mess with pension funds. 

  • When a fraudster claims to be one of the family members and carries out a loan scheme from the retiree’s pension. 
  • Caretakers also claim pension loans on behalf of the person which is another scam alert for the company. 

Online theft of pension funds is now the new normal for fraudsters. Keep your employees funds secure at all costs with digital identity verification. You can prevent fraudsters from gaining illegal access to your business.

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How to Spot a Pension Fraud?

According to The Guardian, pension scams have cost £1 million to every victim and statistics for 2020 are still unknown. God knows where this will end up for the businesses. Nevertheless, there is always good news for businesses and you can spot pension fund fraud in no time with these tips in mind.

If your business gets a random application claiming pension funds, be sure to cross-check if the employee is near retirement or not. 

Received an application for loan from a pension fund? Beware! It might be a scam. Fraudsters often appear as family members and claim loans from a person’s pension fund. It is ideal to create a policy that would not permit any loans without verifying consent of the employee. 

How can Businesses Avoid Pension Scams?

Internal audits can help in identifying pension fund fraud if any employee is involved, but what to do about any fraudsters’ attempts? Moreover, claiming the funds after a fraudulent activity requires a lawsuit and the process never ends in some cases. Businesses can avoid pension scams if there are any identity verification measures for providing pension funds. This will not only help you cater to the needs of retirees efficiently, but it will also help your company in keeping the evil eyes away. 

Identity verification is one way out of the rising problem. Your business needs a robust solution that can not only help you in onboarding legitimate employees for the company, but you can also authenticate the retirees before releasing their funds. 

Identity verification in today’s digital world has also taken the virtual road. Verifying employees is helping different industries in remotely onboarding legitimate candidates and preventing fraud. Your company can secure pension funds with this process too. Resolving issues with the release of funds wouldn’t be a problem and fraudsters can be prevented from causing any issues for your retiring employees. 

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It All Boils Down To…

Retirement brings a lot of peace if the aftermath is not disappointing for the people. However, fraudsters make the simple retirement process inconvenient for the old employees. It is not only stressful for the workers to end their working phase, but there is a lot on their plates that is under consideration. Planning out the perfect life ahead can be convenient if they get the benefits on time without any external force messing up the process. Criminals are now targeting retirees to fulfil their malicious intent and stealing pension funds is the best way for them. Conflicts between employees result in a rivalry that never ends up well for anyone. The organisation becomes the biggest victim of all these issues. Hence, companies should consider employee verification to prevent fraud. 

Eager to know more about employee verification? Get in touch with us today.

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Research for Implications of CBDC on the Rise in Australia

As of the November 2 announcement of the Reserve Bank of Australia, the country has partnered with the Commonwealth Bank, National Australian Bank, a financial services company, and a software company for exploring the possible implications of the novel ‘digital currencies.’

The country is using Ethereum-based distribution ledger technology and now, the target is researching the wholesale use of central banks digital currency. According to RBAs Assistant Governor, Michele Bullock, the idea is to research the development of proof-of-concept for issuing a tokenised form of digital currency. The bank specified that the participants of the wholesale market as potential users of CBDC for tokenised syndicated loans on a DLT platform.

The Governor also added that the bank is pleased to partner with leaders of the industry for exploring the role of wholesale CBDC in the Australian payment system. The head of payments policy of the Reserve Bank of Australia stated on October 14 that research will continue despite the differences from financial institutions regarding CBDC policies.

The RBAs statement also mentioned that the project will be completed by the end of the year and a report will be issued in 2021.

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Shufti Pro Introduces AI-Based OCR for Better Customer Verification

Verifying customers is the goal of our clients and we believe in providing the best solutions. The current pandemic has badly affected businesses and individuals in terms of finance, security, and getting the right customers onboard. Due to this reason, many industries are shifting toward artificial intelligence-based optical character recognition, the global market of which is expected to reach $70 million by 2030.


Considering the rising number of scams and illegal activities, Shufti Pro has enhanced its optical character recognition technology. Supported with artificial intelligence algorithms, OCR for businesses can extract data in seconds, process it into machine-readable language, and fill the required fields accurately.

The advanced OCR technology operates with machine learning and natural language processing (NPL) that ensures the highest level of verification for all our clients. Unlike the usual optical character recognition, the engine can extract text in more than 150 languages. Furthermore, the software can also detect any document type, writing and font style provided.

For effective verification, there is a dire need for robust verification solutions and Shufti Pro’s automated OCR ensures stringent authentication. Any document type, any format, any context, and OCR can detect it. The best part is, the entire process does not consume time and experts do not have to spend hours on data extraction and processing. With the assistance of OCR’s preprocessing and post-processing, comprehending text and authenticating its legitimacy is not a problem.

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