Impact of Canada’s Evolving AML Regimes on Your Business

Impact of Canada’s Evolving AML Regimes on Your Business

Canada’s AML regulations changed a lot in 2019. More rigid AML regulations are imposed on all types of businesses to reduce money laundering and terrorist financing in Canada. These new regulations will enhance the due diligence practices of companies as digital customer onboarding is allowed to the businesses. 

The government of Canada amended the regulations of Proceeds of Crime Money Laundering and Terrorist Financing Act (PCMLTFA). FINTRAC (Financial Transactions and Report Analysis Center) will be implementing the new AML regulations

FINTRAC is an independent federal body in Canada that is responsible for collecting and analyzing the information to detect and prevent money laundering and terrorist financing in Canada. 

The new Regulations are designed to align the Anti Money Laundering (AML) and terrorist financing regulations with the international regulations of FATF (Financial Action Task Force). 

The amendments were introduced in June 2019 after the analysis of the 2016 report by FATF. The report stated that Canada has been the hub of money laundering, real estate, and other industries that are used to launder money to and from Canada. 

Not only that the Mauren Maloney’s report on moany laundering in Canada also highlighted that money laundering is not limited to a few states of Canada. The report estimated that a total of $46.7 billion were laundered through Canada’s economy last year. While British Columbia was responsible for roughly $7.4 billion. 

Based on such shocking facts, Canadian regulatory bodies are keen to control money laundering in Canada, as it is expected that these revelations might be the tip of an iceberg. The latest amendments are designed to bridge the loopholes in digital financial operations and to regulate the unregulated domestic and international entities. 

Key initiatives proposed by the new regulations are as follows:

Digital KYC is possible

Reporting Entities (REs) will be allowed to accept photocopies or scanned copies of identity documents for performing due diligence. In the past, physical documents were required for identity verification of the customers. Customers were required to visit brick and mortar outlets of banks and other financial institutions to register. 

Now that scanned copies of documents are also considered legal, businesses can utilize digital customer onboarding software to onboard clients fastly. Clients can be verified online within a few minutes. It will reduce the hassle of manual customer verification software. This new amendment will improve the customer value of banks and will prevent risk as online identity verification & AML software provide high precision in results. 

Regulation of Money Services Businesses (MSBs)

Money Services Businesses that provided online services are the loophole, exploited by money launderers and terrorist financiers. The latest amendments have addressed this security concern. 

Domestic as well as foreign MSBs will have to follow the same due diligence, recording and reporting regulations. The new regulations will enable FINTRAC to levy administrative monetary penalties on foreign MSBs and will lead to cancellation of their FINTRAC registration if not paid. 

Also, financial institutions within Canada will not be allowed to do business with unregistered MSBs. So, it will tighten the reigns on money launderers and will help financial regulatory authorities to improve the credibility of Canada among other states.

The international MSB’s dealing in Canada will need to run Identity verification on their clients to fulfill the regulations otherwise FINTRAC holds the right to charge financial penalties. 

Virtual Currency Businesses

Virtual currency businesses will be added to PCMLTFA regulations. Virtual currency exchanges and value transfer services would be regulated as MSBs. They will be liable for AML, reporting and record-keeping regulations as well. Also, the virtual currency businesses will have to report any transaction above $10,000. 

Prepaid Access Products will be added to the REs (Reporting Entities) that offer bank accounts. The Prepaid access products providers will have to verify the identity of clients, keep records and report suspicious transactions. All the rules that apply to REs that offer bank accounts will be applied to prepaid access products. 

AML Reporting standards

Previously the financial sector was obliged to report suspicious transactions within 30 days. Now FINTRAC aims at aligning its regulations with international regulations of FATF, reporting must be practiced within 3 days of a suspicious transaction. 

What businesses need to do about these amendments?

With changes in PCMLTFA regulations, businesses will have to change their AML compliance practices aswell. Digital KYC and AML solutions will help them in complete compliance as international MSBs working in Canada will also be required to perform AML on their clients. 

Internet-based businesses especially the virtual currency businesses will have to follow the international due diligence, recording and reporting regulations. All these regulations will not only impact the AML compliance practices of businesses and financial institutions but will enhance their risk cover against money launderers and terrorist financiers. 

Digital KYC and AML software are feasible solutions to keep up with new AML regulations. It provides high precision results within a minute. And runs continuous checks on high-risk clients, reducing the compliance hassle of banks and businesses.

Identity theft

Identity Theft – One Fraud Multiple Facets

Identity theft is a global crime. All types of identities, including the financial, medical and business identities of common people and business executives are stolen and exploited to defraud businesses and institutions. 

As per the Federal Trade Commission’s (FTC) 2019 report, 1.4 million identity theft fraud reports were processed. A total of $1.48 billion were lost in those frauds. The most common frauds that surfaced were imposter scams, credit card fraud and debt collection through stolen identity scams.  

Symantec’s internet security threat report stated that account takeover fraud rose by 79% and new account fraud rose by 13% in 2018 as compared to 2017. 

These fraud reports are raising unease among the business circles and they are very keen to find an ultimate solution to eliminate these frauds. One of the most common counter fraud techniques employed by businesses globally is real-time identity verification of the stakeholders of an entity. It provides a risk cover while enhancing the compliance and customer onboarding procedures of the company. 

A 2018 survey of identity-theft-related crimes in the UK based banks revealed that banks are using enhanced due diligence tools (online identity verification, and AML compliance tools) to mitigate the risk of identity fraud with them.

Industries targeted by identity thieves 

Contrary to the common notion, all types of businesses are targeted by identity thieves. Whether it is a financial institution or a non-profit organization, all industries are the targets of identity-theft-related fraud. 

Every business has a unique business model, but fraudsters do find a way to invade the protocols using a stolen identity. The following discussion will provide an insight into how a stolen or fake identity can take different facets to defraud several businesses. 

Financial industry

Key motive behind fraud is monetary gain. So, fraudsters commonly target financial institutions. And most common frauds conducted with a stolen identity are credit card fraud, account takeover fraud, money laundering, mortgage fraud, and wire transfer fraud, etc. 

Insurance institutions, mortgage houses, banks, stock exchanges, investment companies, etc. are the common victims of these frauds. 

A 2018 survey of Insurance Information Institute(III) of the USA revealed in its 2018 survey that 3 million identities were stolen in the USA alone and more than 50% of those identities were used to defraud businesses. 


Fintech is growing at a rapid pace. Fintech startups raised more than $16.4 billion in VC/PE investments. The growth potential of fintech is huge, so is the risk involved in this industry. Technological solutions used to transform the traditional financial processes have left some loopholes for cybercriminals. 

Common frauds in fintech using stolen identities are money laundering, payment frauds, illegal funds transfer, etc. 

Online payment solutions, cryptocurrency exchanges, online mortgage, and rental service providers, etc are common victims of these frauds. 

One instance of fraud in fintech using the fake identity is when inmates in Florida county jail laundered $8000 through bitcoin. The inmates bought fake identities and credit card credentials through the dark web and used them to buy bitcoins. Once the bitcoin was purchased they converted it into fiat and transferred it into mysterious accounts outside the jail. The jail authorities found about this crime when they investigated a certain pattern of fund transfer, from the accounts of inmates. 

If the cryptocurrency exchange would have conducted identity verification before selling the bitcoin, the fraud could have been traced at the very first stage, because the criminals were using stolen identities and credit card credentials to make transactions. 


The healthcare industry is considered a pure industry, free of any fraud. Contrary to the common belief, cybercriminals are posing a threat towards the healthcare sector as well. They target patients, hospitals and other healthcare institutions, equally.

Common fraud in the healthcare sector are getting free medical services and buying prescription drugs using a patient’s identity. These frauds affect the credibility of the healthcare institutions and their doctors. 

1.3 million child identities are stolen every year and these identities are often used to defraud the hospitals. For example, a teenager in the USA was not allowed to donate blood on the basis that she was treated for HIV in the past. When investigated it was found that the identity of that girl was used to defraud a hospital in some other state to get an HIV treatment. The hospital did not verify it’s patient’s identity and gave a clean chit to a person with HIV. 

In another instance, the woman’s identity was used to get free treatment and her medical credentials were manipulated. When the real patient went for heart surgery, doctors cross-checked her medical credentials and found that the data was manipulated. In case the medical credentials would not have been checked the woman might have lost her life. Because the major credentials of her height and age were changed, that is used by doctors to decide medication dose for a patient. 

Such frauds are often conducted with the intention to get free services or prescription drugs but it can affect the credibility of a hospital.  

Education sector

Education is no more limited to brick and mortar schools and universities. Educational institutions are onboarding students online and are providing online courses. Other than the institutions, many online platforms are offering free as well as paid courses and material to the students. 

Commonly the stolen identities are used to imitate a credible students to get free education services. Also, online educational institutions are defrauded to get access to free study material for selling it to other websites.

In case a website is exploited to get a copy of content protected with copyrights, that website will be deemed responsible for the loss of the original owner of the content (books, research papers, etc). Because only a few credible sites are allowed to give access to the books and notes that have copyrights. 

The website loses its credibility if the identity of a student enrolled in an online course is used by an identity thief to attend online courses. Educational institutions and online educational platforms also need to perform due diligence on their participants to mitigate the risk of serving an identity thief. 

Travel/hospitality industry

The travel and hospitality industry caters to a wide range of clientele, so their risk is high. The common frauds that occur in the travel and hospitality industry are, imitating a guest to get free services or travel free of cost. Also, the criminals at large use stolen identities to use the hotel as their hideout. 

The travel industry is exploited by criminals for human trafficking, drug and money laundering. For instance, human traffickers use fake identities to fool the airport authorities to deliver underage children to other states for child labor. 

The above-discussed industries are just a few examples of the risk that stolen identities pose towards several industries. Other common victims that have been highlighted in the news are the e-commerce industry, real estate industry, government institutions, etc. 

How Identity verification is the savior of multiple industries?

Frauds related to identity theft are the risk for several industries. One stolen identity can be used in multiple ways to defraud businesses. Real-time identity verification can identify an individual within a minute.

Identity verification is a feasible and cost-effective solution to mitigate the risk that identity thieves pose towards a business. 

Real-time identity verification not only provide businesses with a risk cover but also helps them in seamless KYC and AML compliance and improves their customer trust. Customers feel more comfortable and secure with companies that run due diligence on their clients without any long delays. Also, it increases the credibility of an organization and prevents any penalties due to non-compliance.


“Brexit” Greasing the Wheel of Money Laundering

Brexit is in the global news for many years. The reason is that several countries have their stake in it. But the UK will be the one exposed to a huge threat of money laundering. As its regulations regarding Anti Money Laundering are in the pipeline, the businesses in the UK are exposed to money launderers hidden behind shell companies. The predictions infer that UK-based businesses are in dire need of effective AML solutions to mitigate the risk coming from global criminals especially from Russian and Italian mafia.   

The UK’s defense against money launderers will be weak as it will be isolated from its neighboring countries. It will have to develop its own regulations, generate new connections and agreements with other states for regional wellness. This whole process will take time and the money launderers will leverage on it. Currently, the UK is part of Europol, which is mainly involved in Anti Money Laundering efforts. But the overall defense of the UK against money launderers will become weak after leaving the European Union (EU).  

Nicola Gratteri a public prosecutor in Calabria predicted that Brexit might aid the Italian mafia in pooling in their illegal money to the UK. Shell companies will be the safe haven of criminals to legitimize their cash proceeds from drug dealing, human trafficking, etc. 

UK-based businesses and financial institutions are mainly exposed to this risk. The new regulations might transform their AML compliance practices. An increase in shell companies will increase the risk in both B2B and B2C relations. 

These predictions are not only based on speculation, but also on the analysis of past incidents. The Guardian revealed a few years back that $20 billion were moved out of Russia during a 4 year period from 2010. Due to cold relationships with Russia, the UK authorities were unable to trace the real culprits behind the huge money laundering incident. 

A few years back, Organized Crime and Corruption Reporting Project (OCCRP) collected the data of thousands of bank transactions from secret sources and revealed shocking facts about money laundering. It shared the data of 20,000 bank transactions with the news and other agencies. The data showed that 1920 transactions took place in the UK and UK registered firms and banks were used in those transactions. 

Who is exposed to the risk?

Brexit has attracted international investors to invest in the UK, as well as criminals. The UK banks and B2B companies are exposed to a huge risk of money launderers hidden behind shell companies. 


Banks need to pay heed towards their AML protocols. The screening of UBOs (Ultimate Beneficiary owners) is crucial. They need to watch over their individual consumers as well. Because money launderers use layman on the front end to hide their original identity. For example, a 2012 report on an organized criminal group “Ndrangheta” revealed that a Brazillian woman living in the UK was also involved in facilitating money laundering for the Italian mafia. 

The banks in the UK need to keep an eye on the transaction of their individual clients as well. Do not ignore any unusual transactions of the old clients as well. 


Businesses are also exposed to risk. The risk comes to the businesses from several sources, clients and merchants are the most vulnerable corners. Merchants might be money launderers or terrorist financiers. The fake merchants manipulate the business proceeds and integrate the black money within. Once those money launderers are caught, their connection with a legitimate business will tarnish the credibility of that business. 

On the other hand, the clients are also a huge risk, businesses are bound to exercise Anti Money Laundering compliance on their clients. Due to huge risk, the regulatory authorities will keenly scrutinize the businesses and the chances of huge penalties are high. 

Running online identity verification on the merchants and clients will help legitimate businesses to prevent the risk of serving money launderers. Also, it will help to build trustworthy relationships with clients and merchants in the environment of uncertainty. 

To wrap up, once the UK leaves the EU the risk for the businesses and financial institutions will increase. They will have to tighten their KYC and AML practices to prevent monetary and credibility loss. 

Fintech Trends - Unlocking the Unmapped Potential

Fintech Trends – Unlocking the Unmapped Potential

Fintech, a blend of two words Finance and Technology, represents the collision of two worlds that how technology is revolutionizing the finance world. This industry has significantly evolved over the past few years. According to The Fintech Ecosystems report, it has reached to a new height in 2018 hitting the market value of $32.6 billion.

The investors are already in the race of reaching to the top by overcoming the gap between technology, incumbents, and ever-growing customer expectations and demands. They are continuously launching new products and services to diversify technology scores, eventually earning tremendous investments. Several studies and researches are being conducted to analyze the upcoming potentials associated with financial technology and how it would reshape the landscape. 

4 Segments of Fintech

Finance and technology are firmly gripping each other to come up with a strong market presence. The aggregate investment figures reported in 2018, encompasse different patterns of developments. The financial technology industry covers a range of industry models operating in different niches, segmented into four distinct variants. 

  • As new Entrants

Financial technology start-ups look forward to adopting the latest technologies and approaches to enter financial services. Such firms target a particular niche or product with an intent to develop an economic model similar to banks’.

  • As Incumbent Financial Institutions

These institutes significantly invest in technology to improve their performance, user experience, and meeting hostile threats. Moreover, the aim of these institutions is to capture competitive partnership and investment opportunities.

  • As Ecosystems

Financial Technology as ecosystems systemized by developed and large-scale companies offer financial services not just to enhance the existing platforms but also to monetize current user data and relationships. For example, “AliPay” supports Alibaba’s e-commerce platform. Leveraging robust user-engagement, such financial technology organizations offer relatively less customer acquisition cost as compared to other firms.

  • As Infrastructure Providers

These institutes offer/sell services to other financial institutions for digitizing their technology stacks and risk management and improving customer experience. 

Challenges for Fintech Variants

The future holds something big for these financial technology variants and of course, the hurdles are going to be there to reach their ultimate goals. For example, currently analyzing the market, the success of the infrastructure providers depends on the product and technical capabilities. Whereas, customer-oriented startups firmly focus on customer acquisition costs.

For Incumbents, the most challenging part is related to organizational skills and practice just like investing in technology. Convincing an employee, comfortable with traditional methods, to shift to digital can be agonizingly slow. The established technology businesses trying to enter the financial technology ecosystem may face regulatory challenges (KYC and AML compliance etc.). Unlike the advertising industries, the financial industries are quite timorous in adopting the “move fast and break things” approach. which makes them conscious about developing such integrated financial services.

Global Financial Technology Trends

Cloud-Based Solution to Settle the Fintech Market

Cloud computing is now helping financial institutions like banks to digitize their operations and become more accessible to customers, eventually reducing overhead costs. The main advantage is that it eliminates the need for specific and dedicated hardware and software and other resources required to maintain it, overcoming investment costs. As per the study, the cloud-based solutions are all set to lay foundations for how banks and other financial institutes are going to manage, conduct and grow their business in the future.

The organizations are now integrating and using cloud-based SaaS (software as a service) applications to enhance and innovate their non-core business processes e.g HR, CRM and accounting. Moreover, the cloud has paved its way into areas like KYC verification and AML screening for security analytics. In fact, according to digital trends 2018 report, the fast-paced financial institutions are three times more likely to invest in cloud-based solutions and technology. To say, cloud solutions are going to settle the financial technology market offering greater flexibility and efficiency won’t be an understatement.

Artificial Intelligence to Address Complex Issues

The buzz surrounding AI-powered applications and services in Financial Technology is intense. Traditional financial institutions are leveraging this advanced technology to enhance their operations. Approximately 20% of the organizations have already started utilizing AI, and more than 40% are looking forward to implementing it in the near future. Furthermore, up to 25% of the banking activities and operations are expected to be performed by AI-powered machines. One example of such a leading player is JPMorgan Chase. It is utilizing the COIN- Contract Intelligence machine learning program to automate the legal documentation reviews and reducing the human-effort and cost. 

Similarly, other institutions are also using AI-based identity verification and KYC services to speed up the onboarding process and eliminating frauds. AI is certainly a great influence on the customer’s experience and potentially reducing the cost of certain operations. Financial technology industries will see more usage of advanced machine learning and modeling techniques in upcoming years to deal with more complex business processes.

Investors are becoming more Selective

With the financial technology boom gaining ground, investors are becoming cautious and selective. Though there is no impact on overall funding, however, the investments in early-stage startups have significantly decreased by more than half between 2014 and 2017. The technology investors are looking for more reliable, later-stage financial technology institutes that can promise substantial scale and profits. This will give a tough time to startups and companies with no defined path for monetization, to meet with the rising funding demands.

Some institutions are no doubt, successful in raising sums but still, they are facing hurdles in monetizing their products. The reason is customer adoption of innovative business models takes time. For instance, blockchain start-ups are attracting customers and venture capital because of new payment infrastructure. However, because of being in prototype mode and leap to revenue-generation, the incumbents are cautious about blockchain startups. 

User Experience is not enough

The explosion of technology has pushed banks and financial institutes toward digitization. Looking back to the days of traditional banking, financial Technology captured the market by building a decent mobile application with great user experience (UX). But now it isn’t easy anymore since most organizations have transformed their user experience. Now every bank is offering a fully remote, mobile functionality with a classy design to win over customers. 

Customers now want more reasons to switch to new financial technology offers rather than great user experience.

The partnership between Global Banks and Fintech expected to grow

As technology is rapidly advancing, the thin line between financial technology and financial institutions is blurring due to their increasing partnerships. The increasing trend of financial technology has raised an unknown fear in global financial institutions. They could lose a significant market share to financial technology innovators. To cope up with competitive pressure, global banks are looking for ways to invest in financial technology companies. In fact, with direct collaboration, the partnership between global banks and fintech is expected to grow in the upcoming years.

GDPR Phishing Scams - A Novel Trap to Scoop up Information

GDPR Phishing Scams – A Novel Trap to Scoop up Information

General Data Protection Regulation (GDPR), an EU regulation comes into force on 25 May 2018 and aims to provide users with more control over their online data. 

It is ironic that the aim of GDPR is violated by the scammers in an unexpected way i.e. GDPR phishing scams. 

What are GDPR phishing scams?

To comply with the GDPR requirements, organizations send emails to customers to ask permission to use or retain their data. If customers give their consent, organizations keep those customers on the mailing lists. It was streamlined before the cybercriminal opportunists emerged. They take advantage of the deluge of GDPR emails and arrive in the inboxes of naive customers. Flood of messages is sent from the websites where customers have registered themselves previously and are supposed to resend a consent via email. From there web scraped emails, the personal details are stolen and used in malevolent activities. Criminals trick consumers through such phishing emails and grab credit card details, passwords, and personal information. 

EU GDPR regulation is applicable to all EU residents. They are supposed to strictly follow the GDPR requirements, therefore the emails are sent by the companies far and wide. Scammers use these emails to fool the customers. A large number of phishing scams have surfaced in the past few months. The regulation whose purpose is to secure the data of online users has turned turtle and became the trick to violate privacy. 

Apple Phishing Scam

Phishers impersonate reputable companies and familiar brands because there are higher chances that the recipients will respond to the emails from such email addresses or they would definitely have registered at such websites. Apple is one of those famous brands. 

The attackers sent GDPR phishing emails to users and asked to log in to a fake Apple site. These emails appear as if they belong to a legitimate Apple website and fool the victims by saying, ‘due to unusual circumstances, their account has been limited and need to update the credit card credentials’. At the end of the email, a link is given and when a click stroke is done, it is redirected to a website that seems a real website but is actually a phishing attack. Once the user enters the account credentials, the Apple account is taken over by the attacker where they find all the possible personal and financial information of the user. At the time victims report against the website, the fake website was offline which gets hard to track. 

Airbnb Phishing Scam

The GDPR email phishing scams are predominantly targeting the email addresses of well-known companies. Airbnb has also been subjected to these attacks. After the GDPR compliance requirements, Airbnb started sending legitimate emails to its customers to comply with the policies. Fraudsters took advantage of these emails and send phishing emails to Airbnb users. It seems that email is from a customer support office of Airbnb but these are actually the fraudulent messages whose aim is to steal the customer data for illegal purposes. These sophisticated emails had different URLs, grammar mistakes, spelling mistakes, threatening language and request to update the credentials. After such phishing incidents, Airbnb asked its customer community to verify these emails if they look suspicious.

These two main scams have come onto the surface which explicitly delineates the email malware which is fooling the customers of trusted brands. More such cases can also appear in the future that can directly or indirectly affect the lives of people and organizational reputations. Therefore, such brazen attempts and ransomware attacks should be curbed by logging into the official websites to verify request emails.


How FinTech can Leverage on FINMA Blockchain Initiative?

Swiss Financial Markets Supervisory Authority (FINMA) has taken a revolutionary step in the history of Blockchain payment and cryptocurrency(FinTech). The regulatory authority has issued a “banking and securities dealers” certificate to two organizations purely dealing in virtual assets.

The license has been provided to two virtual currency banks SEBA Crypto AG and Sygnum AG. These banks deal in cryptocurrency trading, issuance, exchange, and management. Both these institutions deal purely in virtual assets.

The regulatory authority is very confident regarding its decision. Anti Money laundering protocols that apply on fiat currency transfers are applied to the cryptocurrency transfer, that will be legalized under the certificates issued. 

Cryptocurrencies are the hub of money laundering and terrorist financing. It is the reason why global banks are not dealing with cryptocurrencies and regulatory authorities have not shown complete interest in this niche of financial sector. 

Due to this risk attached to cryptocurrency and its trading, FATF issued its new set of rules for blockchain and virtual assets in June 2019. As per the regulations, the existing AML rules also apply to the virtual currency exchange, transfer and to the wallet providers of virtual assets. Unregulated bodies are exempted from these regulations. 

FINMA has moved one step ahead and legalized cryptocurrency trading and transfer. It took stringent measures to prevent exploitation of this advancement by money launderers and terrorists. 

Anti Money laundering regulations on blockchain payments

FINMA imposed rigorous regulations on blockchain and virtual assets trading, transfer, and exchange (fiat-to-virtual currency, virtual-to fiat currency, or virtual-to-virtual currency). Below is a brief insight into AML and KYC regulations for cryptocurrency institutions as per FINMA Guidance

AML compliance must be practiced on payments on Blockchain

The AML compliance regulations on fiat currency exchanges and traditional banks are also imposed on blockchain. The regulations include identity proofing of clients, in-depth screening of ultimate beneficiaries, risk-based approach in business relationships and timely reporting to Money Laundering Reporting Office Switzerland (MROS) in case of any suspicions regarding a client or a transaction request from a client. 

Complete Identity proofing of client at the time of fund transfer

Complete information of the sender and receiver must be communicated to the financial intermediary (bank, cryptocurrency exchange, wealth management companies, and stock exchanges, etc.) with the transfer request. This will help the receiving bank to run in-depth identity proofing on the people involved. In case of suspicion, the bank will cancel the fund transfer. 

This will add two-fold security to the whole fund transfer process.

Technical provisions

The information transfer among the financial intermediaries can be done through suitable means, other than blockchain, since  there is no developed system for information transfer like SWIFT – the one used in interbank fiat transfer. The banks can use a feasible and safe mode of information transfer. 

Fund transfer among onboard clients and third-parties

The institutions regulated by FINMA are allowed to send or receive funds to and from the external wallets of their own clients on whom complete identity verification process is performed. 

In case the fund transfer involves a third party (clients of some other institution) wallet,  complete information about the sender and ultimate beneficiaries must be shared among the financial intermediaries involved. The transfer will be verified after in-depth identity proofing of the third party involved. 

No exception for unregulated wallets

The unregulated institutions dealing in fiat are exempted from some AML and KYC regulations. FINMA has not given this exemption to cryptocurrency institutions to fortify this new venture against money laundering and terrorist financing. 

Complete AML and KYC regulations will be practiced on cryptocurrency transfer, exchange, and trade even when dealing with unregulated institutions. 

How Blockchain Payment Solutions can Leverage on these rigid Regulations

This new venture of FINMA in the cryptocurrency and blockchain has a lot of growth potential. It might become the cornerstone of the history of FinTech. Blockchain payment solutions, cryptocurrency facilitators and exchanges, and FinTech can leverage on these strict compliance protocols. 

AML compliance is practiced by most of the traditional financial intermediaries and it is their competitive advantage over FinTech solutions. FinTech and blockchain payment companies need to identify this huge opportunity to rise as a credible and compliant industry. It will not only improve their future growth but will also help them sustain their growth. Also, compliance will help them achieve market value and customer trust. 

The ideal solution for new FINMA AML Compliance

The registered cryptocurrency exchanges in Switzerland will have to run complete identity verification on their clients while onboarding them or before validating their fund transfer request. 

Real-time identity verification will help them exercise seamless compliance and customer onboarding. When embarking on such growth ventures compliance is the primary focus, as it ensures growth opportunities. To fully utilize this opportunity, real-time identity verification and AML compliance software are paramount for sustainable success.

How ID Verification Helps in Fighting Digital Scams?

ID VERIFICATION: Digital scams are common phenomena and it affects all types of businesses in every corner of the world. Research states that 76% of businesses reported being the victim of a digital scam in 2017. Most common scams are, fake identities, data breaches, credit card fraud and account takeover fraud, and as per IBM, the estimated cost of a data breach is $3.86 million. 

Online businesses have been the victims of various types of fraud which cause financial and non-financial damage. The financial losses include loss of profit, penalties and extra expenses incurred for fraud management. Non-financial loss includes the loss of credit rating, customer value, and competitive edge of the company.

Fraudsters are always in search of advanced methods to defraud businesses. The regulatory compliances have been amended in response to these multi-facet frauds happening globally. KYC and AML compliance is an integral part of the businesses these days. Digital KYC backed by AI-based solutions is the ultimate digital risk prevention used by online businesses worldwide.

How online businesses are defrauded?

Credit Card Frauds

Online businesses are exposed to credit card fraud just because they accept online card payments. It could happen in different ways, most common are card-not-present(CNP), friendly fraud, lost and stolen card and counterfeit card fraud.  

According to a survey of Insurance Information Institute (III), more than 40% of the stolen identities in 2018 in the USA were used to commit credit card fraud. These frauds caused the loss of millions of dollars to businesses. 

Account Takeover Fraud

The account credentials of a genuine customer are stolen to carry out illegal transactions. This fraud happens often in the financial and fintech sector where money launderers and fraudsters steal account credentials of a client to transfer funds to suspicious accounts. At times account takeover is conducted for monetary gain but most of the time it is conducted with the intention to transfer funds anonymously to terrorists and criminals. 

Such frauds cause a financial loss in two major forms. Firstly, the business bears loss when it makes a refund to a customer whose account was used illegally. Secondly, major loss occurs in the form of penalties and loss of credibility that occur due to non-compliance of businesses with KYC and AML regimes. 

So, to prevent monetary loss online businesses are introducing digital KYC and AML screening solutions into their systems.

Fake Identities

According to the Insurance Information Institute (III), 3 million identities were stolen in the USA in 2018 and most of these were used to defraud businesses. Stolen identities are sold on the dark web to commit frauds and crimes, targeting businesses, government organizations, and even non-profit organizations.

Fake identity fraud is committed using fake or stolen ID cards and other identity documents. 

Common frauds and crimes committed with fake identities are account opening for illegal funds transfer, buying age-restricted goods, money laundering, terrorist financing, etc. 

Often the fake identities of merchants are used to conduct business with credible entities. Shell companies’ owners hide behind stolen identities to conduct business. Later financial proceeds are manipulated to incorporate black money within the legal proceeds of the businesses. Digital ID Verification and AML compliance solutions mitigate fraud and loss of revenue.

Data Breaches

Data is a vital asset for any company. Businesses make profits by selling confidential data of their customers to third parties. That is why data protection regulations like GDPR (General Data Protection Regulations) and CCPA (California Consumer Privacy Act) were introduced to protect the privacy of individuals. 

Data breaches are a common fraud with businesses causing losses of worth millions of dollars. In the digital era, online businesses have big data that they utilize for revenue generation and improving online customer experience. Hackers steal the credentials of an employee and use them for gaining illegal access to confidential data. Data breaches target business from many angles and use several channels. 

System hacking 

Collaboration software are used in companies for communication among teams. Such software are also used for data transfer which is often confidential and could harm the company if a competitor or a hacker gets access to that data. 

B2B relations

The businesses are selling the confidential data of their customers to make huge profits, and such data is shared and used under the strict scrutiny of regional regimes and in-house protocols. Scammers are aware of the importance of data and they often exploit the loopholes in the business models of the businesses and steals the confidential data. 

Recent Equifax data breach is a befitting example here. Equifax had the data of many individuals and business entities, which has been compromised in the database. Now the compromised data will harm the businesses that were in a B2B relation with Equifax. 

Huge damage could happen due to these data breaches. Frauds and losses entailing them could be prevented if online businesses and organizations of all types use digital identity verification tools before allowing access to databases. Biometric authentication, ID verification are feasible solutions for preventing data breaches. 

How ID verification is the Savior that you need?

ID verification is very crucial for online businesses to prevent fraud and losses These solutions screen each and every client that tries to penetrate your online portal, a website or an app, etc. 

Below is an infographic that describes how identity verification will not only prevent fraud but will be a source of value and profit generation. 


Digital identity verification has more than just fraud prevention for online businesses. It helps businesses in building strong and trustworthy relations with their clients and merchants. On the other hand regulatory compliance is made easy and seamless and helps in value generation for the company. 

How Digital identity verification works?

Digital identity verification is a seamless process that verifies the identity of individuals within 30 to 60 seconds. Shufti Pro’s unrivaled identity proofing solution gathers information from an ID card or other identity documents in real-time and matches it with the information entered by the end-user.

Also to add up to the security, end-users ID verification is conducted and matched with the image on an ID card. On the other hand, documents are scanned for default format and forged information. 

The detailed screening of documents and information provided by the end-users eliminates fraud at the very first stage. 

Below is a graphical representation of Shufti Pro’s ID verification process.

id verification process

To wrap up, online businesses have huge growth potential so is their exposure towards cybercrimes. Digital identity verification is the ultimate fraud prevention solution for online businesses to reduce their fraud losses and to improve profits.

KYC and AML compliance is inevitable. Shufti Pro helps you to do it efficiently by providing customized solutions that suit your cost and compliance needs. Every business is a separate entity, its compliance and security needs are unique as well. Therefore plan your customized identity verification solution with Shufti Pro today to stay one step ahead of fraudsters and your competitors. 

Facial Recognition: A Technology for Online Businesses to Prevent Fraud

Facial Recognition: A Technology for Online Businesses to Prevent Fraud

Today, biometric technology has traditionally established itself and has become an integral part of the security sector. Facial recognition among all biometrics is an active expansion at an industrial level. It is estimated that facial recognition technology will be generating a revenue of $9.6 billion by the end of 2020 along with the CAGR i.e. Compound Annual Growth Rate of 21.3%. In the IT industry, facial recognition technology is estimated to grow with a CAGR of 3.3% by 2020. With the increasing demand for AI-based technologies, facial recognition is more specifically contributing to security assistance and solutions.

The ability to visualize and recognize facial features is an imperative aspect of life. With the facial recognition technology, we can not only identify the faces we know but also can authenticate the ones we have never seen before to be aware of the possible perils. This technology is a complicated process that uses the knowledge that compares a number of faces to each other. Facebook, a social networking platform is using this technology to label people in the photographs, smartphones have an advance system of unlocking i.e. face unlock, banking and financial institutions are employing it to verify their onboarding customers in order to proceed them with the transaction, face recognition cameras are installed in the streets which police is using for mass surveillance to detect the criminals. Not only this, a large number of other industries are taking leverage of this intriguing technology. 

Facial Recognition: Future of Biometrics

Among all the common biometrics which include fingerprint scanning, iris, and retina scanning, hand geometry and patterns, facial recognition is a ground-breaking discovery that is leaving no stone unturned. It is covering a large number of industries with its innovative use-cases that were not even thought before. The lucrative opportunities of this technology admire the business owners to integrate it within their system to streamline them and robust the onboarding process. Not only businesses but consumers are also availing a better user experience as they now do not need to manually enter a huge set of information to prove their identity.

Online Industries Taking Advantage of Facial Scanning

Facial recognition technology is infancy innovation as compared to other biometric authentication mechanisms. The reason is the potentiality level of this technology that is providing incredible safety across a broad range of global verticals. Online businesses are taking leverage of this technology to bring in transparency into their systems and avoid the possible list of fraud.

Traditional Institutions

The traditional institutions which include banks, financial institutions, insurance, and investment companies need to ensure KYC and AML compliance at their end. Face recognition technology can facilitate the online portals and traditional systems to identify and verify their customers to fulfill Customer Due Diligence (CDD) requirements. Also, to vet the onboarding identities, IPO drives can streamline their online processes and can use this technology for investor verification. 

Financial institutions are the main target of online fraudsters where they exploit vulnerabilities in the system and perform malicious activities using fake identities. Face verification can help authenticate the user using supporting documents and evidence that are enough to verify a particular identity. Also, this will help eliminate the engagement of PEPs into the financial sectors. 

Digital Businesses

The global regulatory authorities are imposing strict regulations for digital businesses to tighten their KYC and AML compliances within the business. For this, all businesses are obliged to comply with the local regulators to fulfill diligence duties by scrutinizing the traders, freelancers, end-users, customers, etc. through digital identity verification. Online forex brokers, financial stock traders, digital banking, FinTech, and the freelance marketplace can utilize facial recognition technology for user verification. Facial scanning is a real-time solution for the online identities for identification and verification of facial features in seconds. This facilitates not only the digital businesses but online customers while providing them a streamlined user experience.


The online marketplace has a high risk of online fraud and payment scams. The online marketplace includes online stores and brands that sell goods online and have different payment methods. Scammers find out and the loopholes and try to fraud the system in one way or the other. 

Online payment facilitators can utilize embedded digital facial biometric technology to combat payment fraud. When the customer proceeds to payment or cart items, through online face verification, the identity will be verified in real-time against the picture on id card or any similar supported document. This will help reduce the likelihood of a fraudulent transaction.

Another use-case of facial recognition technology in e-commerce is the age verification of the under-age community to refrain them buy age-restricted online goods. This can be done by examining the facial features through innovative technology and providing the status of accepted or rejected. In this way, a business can prevent itself from the risk of heavy fines and reputational damage.

Travel and Hospitality

The inclination of the travel industry to online identity verification is rising rapidly. Air and sea travel companies are using digital ways to verify customers while providing them streamline customer onboarding experience. Not only this, for online hotel bookings and accommodation, online face verification can help in verifying the customers easily.

This is a supreme solution for both consumers and businesses that help them cater to large traffic of passengers easily. In the travel industry, there are high chances of fake identities and identity theft cases, to prevent a business from such scammers, face verification can help reduce the risks of identity fraud by authenticating the identity particulars while online bookings and confirmations.

Health and Medicare

In the healthcare industry, hospitals, and medical insurance companies, identity verification holds crucial importance. The threats of false insurance claims and false identities should be catered digitally to avoid fraudulent identities from ruining the online systems and stealing the identities of patients. 

Healthcare professionals tend to spend energy and time to manage the patient’s records, access them and retrieve them, facial recognition has covered it efficiently. That valuable time can be spent to deal with emergency situations. Keeping sensitive data of patients is a crucial task that can be done through biometric face verification. Hospitals can identify the patients through facial recognition and can verify against the picture on the hospital supported documents. In this way, no fake identities can fraud and avail hospital services. 


Social networking and gaming industries can introduce transparency into their system using facial recognition technology. Age sensitive gaming and social media platforms can verify the age of the user by verifying the facial patterns and features of each onboarding customer. No under-age community could be able to enter into the network which is age-restricted and the identity will be authenticated at the time of registration.

Recruitment Companies

For the online verification of employ with past experience and education credentials, facial recognition technology can be used. A user can upload a live picture that can be then verified against the provided documents to authenticate the true identity. Also, for remote hiring, employ can be easily authenticated. This is highly beneficial for companies that lack the electronic signature capability and find traditional email not enough for recruitment purposes.

In the education sector, schools and colleges can adopt facial recognition technology to keep track of the records of their students. This would be easy to manage, process and retrieve the student data i.e. health record, academic record, personal identity, etc. in an efficient manner.

New Rules by the UK Gambling Commission and Their Impact

New Rules by the UK Gambling Commission and Their Impact

The UK Gambling Commission announced new gambling rules earlier this year to make gambling safer and fairer. Since online operators are required to follow these new rules, it has sparked an interesting debate since gambling platforms are to verify the age and identity of customers before they can gamble.

The gambling business is growing at a staggering pace. According to the Gambling Commission, 

“Statistics show that industry profits (1) from the sector have grown 10% to 4.7bn in the last year, and public participation has increased from 15.5% in 2014 to 18.3% in 2017. It is estimated that nine million people across Britain gamble online.”  

Safety for Children

Previously, the customers did not have to verify their age at the time of gambling. They could verify within 72 hours, making it possible for underage participants to enter a game. The operator, however, was not allowed to release the winning unless the person verified their age. And if found underage, they would be denied the winnings.

Under the new rules, the player cannot enter the tournament unless they verify their age. They can’t even deposit funds in their account or use free bets or even play with someone else’s money unless they prove their age.

The rules are much stricter now as it applies to free-to-play games as well. Technically these games do not constitute gambling since there is no real prize money involved, however, legally the underage participants still cannot participate.

Fairer Gambling Environment

There have been incidents where gambling platforms have asked for additional ID information when a winner tries to withdraw. Almost 15% of the complaints were about incidents where people were unfairly prevented from claiming their winnings. 

Under the new rules, all the required information such as name, address, and date of birth, is collected before the customer funds his account. Remote licensees are required to verify these things at the very beginning. If there is a need, they should promptly ask for additional information. 

They are also required to inform the participants about the identity documents and other information they might be required and take any necessary steps to maintain that information. These changes will help prevent fraud or criminal activities. Now the operators won’t be able to come up with excuses of asking for additional information while withdrawing funds.

In general, when the operators have such information, they can prevent harm and detect any illegal activity. 

Another impact of the new rules is that the person will be identified if they have been self-excluded. Verification by operators will mean that unless the customer verifies their details or provides the required info, they won’t be allowed to gamble. The operator can check these details against their own database as well as the one that Gamstop is holding.

How are these changes helping the population?

First, children and minors will be protected from the harmful impact of gambling. Second, people will also be shielded from fraud and other gambling-related crimes. And third, upon withdrawing their winnings the customers will receive those without unnecessary delays.   

Britain is the largest regulated gambling market in the world. It is imperative that it should be held up to the highest standards of regulations. The new rules were proposed after an official review of online gambling. 

In a nutshell, the changes intend to achieve the following;

  • Protect children and ban operators from providing free-to-play games unless the customers’ age is verified
  • The new process should increase the speed and accuracy of age verification
  • Improving the effectiveness of age verification processes
  • Operators can limit the spending of players based on their affordability
  • Ensure that unacceptable marketing and promotions are minimized as much as possible
  • Handling disputes and complaints swiftly and efficaciously
  • Helping customers with better interaction who might be experiencing (or on the verge of facing) gambling-related problems.

Of course, the reviews and improvements will not stop. We can expect more changes and going forward. For example, the gambling commission will likely suggest improvements in gambling-related products.   

Other suggested improvements for the future, mentioned in the UK’s gambling commission website are;

  • Reviewing requirements on the protection of customer funds. This also entails evaluating the current protection measures and checking dormant accounts
  • Examining the limits of gambling credit
  • Analyzing changes to make sure that consumers can easily withdraw funds

Why the Need for Changes in Rules?

Simply put, the old rules had loopholes that were not in the customers’ best interests. For instance, three companies (Daub Alderney, Casumo and Videoslots) were fined a total of £14m for failing to implement effective measures that prevented money laundering and protected customers from gambling-related harm.  

As an extreme example, the gambling license of CZ Holdings was revoked after their license review. The company is now banned from providing gambling services in Britain. 

The crackdown is not unjust since the old form of rules was simply being followed in letter but not in spirit. Neil McArthur, the Commission CEO, is taking a strict stance on the rules. He mentioned that it is not enough to simply put policies in place, the participants need to understand the rules and should take responsibility for following and implementing them.

The following is a snippet of the changes in the rules, and compares them with the old ones;

Change Previous New
Age Verification Online operators have been allowed 72 hrs to carry out age verification checks, which gives a slot to underage participants to gamble   Operators are obligated to verify the age of participants before they can deposit money in their account
Identity Verification Gambling operators were not required to check for KYC (know your customer) before depositing money in the account, only after the participants have gambled Operators are obligated to verify the name, address and date of birth of the player before they allow them to gamble
Eligible Games Not mandatory Underage participants are not allowed to play free gambling games (even though no money is involved)

When KYC is in check, it gives the operators more leverage to protect participants from harm. These checks also protect the participants from manipulative operators who try to put hurdles when withdrawing. Since the ID and related info is already submitted, it means that the operators cannot demand it when someone wins the bet.

Under the new rules, the shady online operators who demand unnecessary identity checks only when the customer tries to withdraw winnings cannot exploit the system. Just because of the new rules 15% of complaints regarding this particular issue can now be resolved. 

What this means is that the operators need to check someone’s age before they gamble and not after. This deterrence prevents children and underage individuals from gambling online, and hence, inhibits gambling-related harm.

The UK Gambling Commission has not prescribed exactly how the procedure should be carried out. But then this discretion should not give them freehand, as they have to comply and implement the rules to the best of their abilities.    

A Short Intro to the UK Gambling Laws

The new legislation aims to protect children and illegal gambling. It also assists gamblers to make safer bets and protects them from gambling-related fraud. Moreover, it protects children and people under self-exclusion options to help them overcome gambling addiction.

According to the definition of Gambling Act of 2005, it is “betting, gaming or participating in a lottery.”

Then there are six main types of gambling;

  1. Arcade: Adult and family games 
  2. Casinos: Both online and live casinos
  3. Lotteries: This includes tombolas, sweepstakes, and raffles.
  4. Betting: Online or bookmakers
  5. Bingo: Online and bingo halls
  6. Gaming machines: Examples include betting and fruit machines.

With the exception of arcades all gambling portals are regulated. Arcades are partially regulated. AGCs (gaming for adults) and FECs (gaming open to families) require gambling licenses from the Gambling Commission. UFECs (arcades that are open to families but do not serve alcohol) only require a local permit.

The latest risk rating by the UK Gambling Commission is as follows;

Gambling Sector Current Overall Risk Rating
Remote (casinos, bingo, and betting) High
Lotteries (remote and non-remote) Low
Gaming machines, technical gambling software (remote and nonremote)  Medium
Casinos (nonremote) High
Bingo (nonremote) Medium
Betting (nonremote) On-course Low
Betting (nonremote) Off-course High
Family entertainment centers Low
Arcades (nonremote) Medium

This classification helps in understanding the new rules and their needs. It also helps to see the areas where the Commission is focused on. 

In this risk-based supervision and risk management, digital identity services will be promoted. The entity responsible for risk management is the Gambling Commission among others. The due date is set for October 2019. Also, enhancing overseas capabilities on an ongoing basis is on their agenda. 

Her Majesty’s Treasury (HMT) will be working with the New Digital Identity Unit along with private and public partners to promote digital identity services.    

What is the minimum age to legally gamble in the UK?

One needs to be at least 18 years old to legally gamble, be it online or live. Gambling operators, sportsbooks and online casinos are legally required to confirm that the participant is at least 18 years old. They usually confirm the age through ID and other supporting documents, if the need be.

An exception here is that 16-year-olds can participate in lotteries, football pools, and scratch cards. 

What will happen if an operator does not verify the age? 

The UK takes gambling violations very seriously. The players will not be given their winnings if they get caught. It means that the players must take it seriously that when they read “you must be 18 years old to access this website.”

Here is a short table that compares the legal age for gambling in different countries. 

Country Legal Age for Gambling
Germany 18 or 21 depending on the state
Greece 21
France 18
United States 21

The Rules regarding Lottery are a little Different

The UK’s National Lottery follows stricter rules. The lottery has been running since 1993 and includes different games like Lotto and Thunderball. Gamblers in the UK can participate in pan-European and EuroMillions lottery, which include nine different countries.      

Please note that 28% of the lottery prize goes to “Good Causes,” and this has raised over £40 billion to date. 12% of the prize pool goes to the state and 15% covers the cost of running the lottery and selling tickets. 

According to the Uk Gambling Commission Act 2005, the list of offenses is quite long. Here we share a small part of the major gambling-related offenses.

Offense Fine
Gambling by an underage individual £1000
Employing an underage person to provide gambling facilities 51 weeks in prison and/or £5,000 fine
Cheating, attempting to cheat, or assisting 

someone to cheat at gambling

51 weeks in prison and/or £5,000 fine
Operating gambling facility without 

A licence or permit

51 weeks in prison and/or £5,000 fine
Violating advertising regulations 51 weeks in prison and/or £5,000 fine
Offering a machine without a licence or permit 51 weeks in prison and/or £5,000 fine

Let’s review the new rules by UK Gambling Commission to license conditions and codes of practice (LCCP) and their implications. These have risen the standards for alternative dispute resolution (ADR). More importantly, these have boosted the obligations regarding how licensees interact with those customers that might be at the risk of gambling-related harm. 

The latest changes will be applied later this year and the next year.

Changes to Alternative Resolution Providers (ADR)

The new rules make it an obligation for gambling businesses to only use those ADR providers that meet the additional standards along with the ADR regulations. Customer service, governance, and decision making fall under these additional standards. This makes the role of an ADR provider clearer. It also reassures the customers that the provider is objective (independent of gambling operations).   

The gambling operators are also required to interact with customers that might be vulnerable to being harmed. This has strengthened the requirements to interact with the customers.   

Note that these rules will come into effect on 31 October 2019.

The commission aims to make operators more responsible and encourages them to cooperate under voluntary arrangements for research funding. The funds will go to the  National Strategy to Reduce Gambling Harms in Britain. This aims to support greater transparency of the funds that the gambling businesses contribute over time.

These rules regarding operators and their contribution to research, prevention, and treatment of gambling fraud/harm will come into effect on 1 January 2020.

The Easiest Way for Gambling Operators to Comply with the UK Gambling Commission New Rules

At Shufti Pro, we excel at real-time age and identity verification. Our mission is to follow and assist in implementing KYC and AML (anti-money laundering) regulatory compliance. Read our blog post for details on how we provide age verification for online gambling platforms.

We normally perform age verification immediately after completing the online identity verification. 

Identity verification is a multistep process where the end-user (gambling player in this case) is assessed for authenticity. This also helps establish the fact that they are who they claim to be. Once this is done, we can move on to age verification. For this, we normally require a government-issued ID document. Usually, driving license, ID card or a passport is used to verify age.   

With optical character recognition (OCR) we readily extract information from documents. This works so well for operators since they can perform age verification as part of the identity verification. 

Merchant identity proofing: building trustworthy B2B relations

Merchant Identity Proofing: Building Strong B2B Relations

Identity Proofing: The success of e-commerce has been very remarkable. It is expected that global e-commerce sales will reach $632 billion by 2020. There was a time when only a few huge names were present on online platforms securing a huge customer base. The evolution of global markets and the integration of the customers and markets from around the globe have raised the competition in the market. When a consumer or a business search online for its need there are plenty of solutions provided by plenty of businesses from every corner of the world. The times are long gone when only a few market makers were present online and were considered trustworthy. Nowadays the businesses are building global B2B relations. The world has evolved into a global village and it has generated numerous opportunities for legitimate businesses and fake merchants. The businesses are keen on acquiring global merchants while controlling their costs and increasing their revenues.
Often the merchants oversee the threat of acquiring fake merchants due to the low prices and fake promises made by those fake merchants. It is a common belief that the businesses only need to perform KYC and AML screening on their customers and only the customers are posing threat towards the businesses operating online. The scenario is quite different the businesses are also exposed to a global merchant base. The merchants from every part of the world are pitching in a very attractive way for their businesses and many of them are fake. Many are using stolen merchant identities to build credibility and many are using marketing techniques to trap businesses into their fake merchant portfolio. It is necessary for businesses to know their partners and their merchants.
The merchant of a business is not only providing services or goods it becomes a part of the organization. And the organizational credibility is most likely to be affected if the business builds B2B relation with fake merchants, whose aim behind the business relation is monetary gain, money laundering or even worse, i.e. terrorist financing.

How fake merchant fraud can affect your business?

Fake merchant fraud works in two ways. Either the criminal steals the business identity proofing of a merchant or builds a fake identity using the stolen credentials of a person. The fake merchants pose huge threats to the businesses. The fake merchant fraud could cause revenue loss, loss of credibility, unhappy customers and regulatory penalties.

Fake merchant and hidden beneficiaries:

The money launderers and criminals build fake businesses and use the platforms to wash their laundered money. These businesses perform normal business operations and build B2B relations with other businesses. Do not fall prey to their trap of attractive and promising marketing techniques.
The businesses around the world are bound by corporate social responsibilities. Raising charity for orphans and giving shelter to the needy are still very worthy acts that add a lot to the value of the company and enhance the company profile. But imagine how much of bad fame a business would get if it is found to have B2B relations with a business owned by terrorist financer or a money launderer. Running an in-depth identity verification and AML screening on a merchant can eliminate such a huge setback. Performing AML screening on a merchant takes a few seconds while building a market value and credibility takes years, hence it is vital for businesses to exercise due diligence on their merchants as well as customers to build a strong and trustworthy relationship with all the stakeholders.

Data breaches by your vendors:

Often the fake merchants build a relationship with some business and extract the confidential data of the customers. Once the data have been extracted it is used to commit an array of frauds and crimes.
The most common frauds that are performed using the stolen confidential data are excessive chargebacks, illegal funds transfer and use of customer’s stolen identity for making purchases and much more. These frauds are committed using the data attained from the platform of a legitimate business and the ultimate loss is born by the business whose platform has been used for conducting the frauds. Once the data has been stolen it is sold on the black web and is further used for crimes like money laundering, human trafficking, drug trafficking, and terrorist financing.
The criminals are carving more enhanced and advanced ways of crimes using the loopholes in the e-commerce sector, hence it is necessary to perform complete identity proofing and AML verification of the merchants of an organization. In online relations, where orders are placed and proceeds are confirmed online, the risk of acquiring a fake merchant is high, hence this risk can be completely eliminated by performing in-depth identity verification of the merchant.

Perks of performing identity verification of merchants:

Identity verification of the merchants is necessary because it not only help the businesses to identify their merchants and prevent fraud but it brings many more advantages for the business.

  • Identity proofing of the merchant helps the business in the prevention of loss that the fraud may bring in. In case the merchant of business has used the confidential customer data for illegal purposes the ultimate loss comes to the business. The loss is not only monetary but also the business loses its reputation among the customers and in the industry. The loss of customer value means the loss of revenue. Such loss can be prevented with the help of AML screening and identity verification of the prospective merchants.
  • Often the businesses have unique requirements for choosing a vendor. The businesses often do not want to connect with merchants from some specific regions of the world, hence the geolocation and identity verification service of Shufti Pro helps the businesses to identify their merchant’s location and his true nationality by screening the ID proof that the merchant may provide. The OCR feature of Shufti Pro’s document verification solution screens all the information on the ID document provided and also provides the proof if the document is original or fake. Hence the businesses can easily scrutinize the prospective clients making it easier for them to select a trustworthy and credible merchant based on their specific needs and requirements.
  • The identity proofing of the vendors and merchants of the business will add another star to the portfolio of the company as it will be a form of regulatory compliance. Although the regulations are rigid only for performing due diligence on customers, the organizations found in connection with the terrorist organizations and PEPs (Politically Exposed People) comes under the strict scrutiny radar of the regulatory authorities.

Hence the businesses should consider the identity proofing of the vendor as an investment that will reap longterm gains for the organizations. Businesses of all types and all sizes are exposed to the risk of cybercrime and fake vendors, hence it is necessary to think in new dimensions. Shufti Pro’s AML and KYC verification solution is the advanced solution which helps the businesses to stay one step ahead of criminals and fake merchants.

Identity Proofing: Secure Your Business From Third-Party Data Breaches

Identity Proofing – Prevention from Data Breaches

World economic forum states that Cyberattack is mapped as one of the top threats to global stability. A cyberattack occurs every 39 seconds. Research states that the global economy can lose $445 billion a year due to cybercrimes. The stolen data is used to defraud the businesses for financial gain which ultimately turns into the financial and value loss of the business. According to a survey of Insurance Information Institue, out of 3 million stolen identities in America, more than 50% of those stolen identities were used for online financial credit card fraud with banks and online businesses.
Such an alarming increase in cybercrime magnitude and methods have made the businesses to invest in global identity proofing and document verification solutions. A survey reports that 63 percent of companies have implemented a biometric system or plan to onboard a customer.

Huge data breaches raising KYC concerns of businesses:

Huge data breaches have occurred raising a question on the cybersecurity of the so-called top-notch organizations dealing with confidential data of millions of people and businesses. For instance, the recent data breach of Equifax has caused losses of worth millions of dollars to the credit rating agency and also the other businesses. The huge data breach compromised 143 million records which contained the records of not only individuals but businesses also. According to a recent settlement with the regulatory authorities, Equifax is liable to pay a settlement of 245 million and also free credit rating to the victims of this data breach. Some other huge data breaches that affected the businesses in the past are the data breaches of Target, TJX and facebook. Those data breaches not only influenced the individuals but the businesses as well.

How a third-party data breach may become your liability?

Once an incident of data breach occurs it leaves an impact on several entities. The most common targets of the third-party data breaches are the businesses that do not have strong identity verification solutions integrated into their systems. The need for a strong identity verification solution cannot be overlooked by the businesses willing to prevail in the market for a longer period of time.

Risk of identity thieves:

After stealing the legitimate data of individuals from some third party server the fraudsters move towards the next step and buys goods and services from online businesses using the stolen identities. The business delivers the goods and services charging from the illegally accessed account. Once the victim realizes about the misuse of his identity proofing he gets a refund due to consumer protection laws and the business is the ultimate loss bearer. Other than illegal purchases there is an array of crimes initiated with a mere stolen identity, most common are, terrorist financing, money laundering, human trafficking, drug dealing, etc.
The phenomenon of stolen identities could affect businesses of all kinds in many ways and can influence many industries simultaneously, let it be a financial institution, online business, hospital or non-profit organization identity theft has caused huge losses.

Increase in fraudulent transactions

Once the individuals have access to the personal credentials of the individual he uses it often for financial fraud. Mostly the banks and financial institutions are defrauded through illegal transactions to an from the account of their legitimate client. According to a survey, online fraudsters managed to steal £1.2 billion from UK-based banks even in the presence of strict regulations regarding KYC (Know Your Customer) and AML (Anti Money Laundering). Also, the banks lost 123 million to internet banking fraud.
The fraudulent transaction fraud does not target the banks only. It targets all types of financial and fintech businesses. For example, a business facilitating online money transfer is defrauded by sending or receiving money using the stolen credentials. Other than that cryptocurrencies have been a very common victim of identity thieves and terrorists, the security loopholes make it easy for the criminals to hide their identity and money transfer trail.

Your business identity might be misused

The major data breach that hit Equifax in 2017 compromised the data of many individuals and businesses. The identity of a business, either big or small is a very valuable asset. Once that asset has been compromised it can start a range of losses for the business, including financial loss, loss of customer value, loss of competitive edge and the loss of competitive edge. Hence the misuse of a business’s identity could bring that business to its knees. The criminals could crack huge deals using the stolen credibility of a business. The identity thief might sell low-quality goods to the other business or client using the stolen business identity, ultimately this crime cycle will end with the loss of company value of the victim company.
The stolen business identity could be used for even more grave acts like money laundering or terrorist financing.

Getting a job with stolen identity:

The stolen credentials in a data breach are sold for as low as 10 to 15 dollars in the black web. Using these stolen identities the criminals get jobs at companies with the motive of hiding their true identity or to perform even bigger crimes like data breach while being an employee of the company. In case a business performs an efficient identity proofing on his employees before onboarding the new people, the risk of loss due to identity thieves is less than 1%.

How identity proofing helps in risk mitigation

Identity proofing helps the businesses to screen the true identities of the customers and employees before on-boarding them. The integration of AI-based global identity proofing systems adds layer after layer of security to the company profile. Hence the fake identities are highlighted before any damage could be done. Below is how timely investment in identity proofing solutions reduces the risk of loss due to third party data breaches:

  • ID verification screens all types of IDs and other identity documents for originality, expiry dates, forged data, MRZ code, hologram, reflected colors and photoshop.
  • Facial verification adds another security layer by checking the facial image in real-time for liveliness, 3D depth perception, and micro expression. Hence making it impossible for any fake person to as a person whose identity he has stolen.
  • Two-factor identity proofing makes the identification process even easier flexible for clients and businesses.

All the above-mentioned solutions help the businesses in keeping the identity thieves at bay while making it difficult for the fraudsters to stolen identities to cause any loss to the business. The data breaches no matter how old, have the tendency to cause loss to all types of businesses. Businesses need to integrate an Identity Proofing solution into their systems so that the data breach of some third party like Equifax, google or facebook might not become your liability in the form of identity theft-related frauds.

AML Screening in the light of Compliance Regimes Around the Globe

AML Screening in the light of Compliance Regimes Around the Globe

AML compliance is inevitable for all types of businesses around the globe. The regulatory compliance face has been changing rapidly. According to a PWC (2018) survey, 2% to 5% (approximately $1-2 trillion) of global GDP is lost to money laundering. The authorities are becoming ever more vigilant in controlling and mitigating financial risk posing to the businesses and the economies of the countries as well. The regulations are not only targeting the money launderers but are also regulating their facilitators that assist hem knowingly or unknowingly in their acts. AML (Anti Money Laundering) practices have been carved for businesses around the world and all the regions require the businesses to perform due diligence on their customers in one way or the other. AML compliance is not as difficult for the organizations to follow as it may seem to be. An investment of a few thousand (dollars or pounds or yuan, etc) waives off the loss of millions in penalties. Here is where shufti pro enters the picture. The globally integrated system is designed to perform top-notch identity verification screening on the prospective customers of the business.

Which businesses are liable for AML compliance?

Most of the businesses are liable for AML compliance but in a broad spectrum, the businesses involved in any kind of financial services directly or indirectly are liable for AML compliance. Below is the list of the businesses that are liable to integrate a compact AML compliance solution into their organizations according to the global AML regimes:

  1. Banks and all their subsidiaries
  2. Brokerage houses
  3. Insurance companies
  4. Forex exchanges
  5. Auditors
  6. Casinos and online gaming sites
  7. Non-banks mortgage lenders
  8. Dealers in gold, diamond, and other precious metals
  9. Real-estate agents
  10. Money transmitters
  11. Cryptocurrency facilitators
  12. Fintech businesses and many others.

AML Regimes Around The Globe


The Chinese economy has become one of the most strong economies, all due to their strong laws and effective enforcement of those laws. AML compliance laws in China majorly comprise the enforcement of KYC (Know Your Customer) through identity verification protocols.

  • The liable businesses mentioned above are required to verify their identity proof and other documents.
  • Regular identity checks must be performed in case there is any change in the beneficiaries or other identity-related protocols.
  • The businesses must report any cash transaction over the minimum transaction threshold or if the customers do not provide identity proof.
  • Maintaining a complete AML compliance department is necessary.

The United Kingdom:

The UK has recently taken a progressive approach towards the financial regulations post-Brexit. Currently, the MLR-2017 (Money Laundering and Terrorist Financing and Transfer of Funds (Information on the Payer) regulations 2017) is prevailing in the UK. The liable businesses are provided a complete list of AML compliance checklist which addresses mainly the following things:

  • Identity verification of the customers before extending the services to them
  • Maintaining and regularly updating the identity verification and AML compliance records
  • Training the employees
  • Take enhanced due diligence in case of PEPs (politically Exposed People)
  • Performing due diligence on the online customers and overseas customers by checking them with the international sanctions lists, terrorist lists and the lists of high-risk countries
  • Proper reporting and monitoring of internal AML compliance practices of the company

The United States of America:

The Bank Secrecy Act (BSA) is currently thriving in the USA and is amended several times. The regulations are quite detailed and cover almost every side of the money laundering risk of the financial institutions and other institutions involved in financial services. Below are the key AML compliance regulations in the USA under the BSA.

  • Performing customer due diligence is a must for all businesses
  • Banks, mutual funds and other financial institutions must go one step ahead in performing customer due diligence and perform proper customer identity verification screening on their prospective clients.
  • Record keeping and maintaining a proper AML compliance program within the organization is necessary for all concerned businesses.
  • Businesses are required to register for financial information sharing to be used only for identification purposes.


In Canada, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) is implementing the AML compliances and FINTRAC is responsible for enforcement and compliance of this act. The key features of the prevailing AML Screening act in Canada are as follows:

  • Identity verification is necessary for all the businesses addressed in PCMLTFA
  • Banks are required to perform identity verification on their customers, or the companies before opening their accounts
  • The individuals must be identified through in-person or non-face-to-face programs (such as facial verification and online identity verification)
  • Banks must perform complete identity verification on the beneficiaries and legal signatories of the company before opening their account.
  • International electronic funds must be reported if more than CAD$10,000 (banks and Casinos are equally liable for this clause)
  • In case of non-compliance, the businesses are entitled to a fine of CAD$100,000 to CAD$ 500,000.

A summary of the key features of AML regulations around the globe:
Below is a summary of the key features of the AML regulations prevailing in different regions of the world:

  • The businesses are required to perform identity verification on their customers before entering into business with them
  • Customers should be screened for international sanction lists, terrorist lists, high-risk countries and PEPs (Politically exposed people)
  • The AML compliance practices must be performed regularly on all the customers
  • A proper record must be maintained for the AML practices
  • Any transaction above the “minimum cash transaction threshold” must be reported to the concerned authorities
  • Proper training of employees and an integrated AML compliance program
  • Fines in case of non-compliance

Shufti Pro is the ultimate AML compliance solution:

AML compliance is made easy with the Shufti Pro AML Screening solution. It has all the features required for a compact AML Screening solution that many businesses need today. Below are the key features of the Shufti Pro AML compliance solution that makes it a worthy and value-generating investment for businesses:

  • Identifies the people’s identities within a minute, hence reduces the friction in customer onboarding.
  • It provides global coverage, identifies the IDs of the people from any region of the world
  • Perform complete AML screening on your customers based on sanctions lists, PEPs, terrorist lists, and lists of high-risk companies.
  • Provides the proof of identity verification and AML screening of every individual
  • The Shufti Pro database is updated regularly hence reduces the risk of wrong verification.

To conclude, the financial and fintech businesses are on the verge of losing millions due to non-compliance with AML regulations. No matter which region of the world the business is prevailing the businesses dealing in financial services is bound to follow AML Screening protocols of different frequencies. Last but not least, regulatory compliances have never betrayed a business, the investments in such compliances generate company value and provide cover against fraud and identity thieves.

California Consumer Privacy Act - How it will impact Your Online Business?

Impact of California Consumer Privacy Act on Online Businesses

California consumer privacy act has been revolutionizing consumer data regulations. The act was passed in June 2018, introducing reforms that would cause a major change to the privacy policies and data usage policies of the tech companies. The Act has made it mandatory for the tech companies to disclose their data collection motive, the nature of the data collected and also the third parties to whom it has been sold for ad generation. It will have a global impact on the tech industry using the consumers’ data. The act was much anticipated as it will improve the online experience of users and will reduce the frauds that happen due to data breaches. Such losses of data cause major harm to the business in possession of that data. The compliance to the California Consumer Privacy Act will add value to the company profile, increase its credibility and also increase the customer value of the company. Because the consumers are very keen to exercise control over their data. According to a survey, 90% of Americans want to exercise control over the information collected from them.
The data that the consumers leave willingly or unwillingly at the internet is not some useless data trail that would remain in the cloud, but the search trail and other information that the users provide willingly is used by the businesses to generate high revenues. Appearing in mobile search and results can increase brand awareness by 46%. Facebook, LinkedIn, youtube, Reddit, etc are considered the most fruitful platforms for selling the products. According to a survey, 93% of businesses in a B2B arrangement consider Linkedin as a most valuable platform for their business while 95% of B2C businesses consider Facebook as the most valuable platform, in terms of generating revenues and creating brand awareness among the consumers.
These businesses do not generate revenue by just posting their products for sale, they use the user data available with tech businesses like facebook, google, etc. to analyze and predict the consumer buying behavior hence making sales offers based on the buying behavior of a user.

Highlights of California consumer Privacy Act:

The act was passed as a bill in June 2018 by the California state legislature. It will be in effect from January 2020.
This act has given many rights to the Californian over their data collection and usage.

Concerned businesses:

The businesses that have the following attributes will be liable to follow the regulations of the California Privacy Act:

  • Generate $25million annual revenue,
  • Annually buy or sell the data of 50,000 Californian consumers
  • Generate 50% or more of their revenue in buying and selling of California consumer data.
  • Businesses operating anywhere in the world but providing goods and services to Californian users.

Disclosures regarding usage of data:

The tech companies are bound to take consumer consent before selling their personal information to a third party. It forces companies to reveal what data they collect and how they use it. Also, the consumers will have the right to request the business to delete and remove their data from the database of the business.

Requests by the consumers:

Consumers of California will have the right to request the company to show them the usage history of their data. This request includes the usage and the purpose of data, third party to whom data has been provided, methods used for the collection of data and the categories of personal information collected.

Clear privacy policy on the website:

The tech companies operating in California have to add a “do not sell my personal information” button at a clear place on the website.

Legal action by the consumers and fines:

The consumers will have the right to sue the company for illegal use of their personal information. The businesses if found noncompliant with the California Consumer Privacy Act (CCPA) will be liable for a fine of $2500 to $7500 on every violation.


Even if the user exercises his right to control his data the business will not show any discrimination towards that consumer regarding the services and the price of the product.

Businesses that need to change their privacy practices:

The California Consumer Privacy Act will be in effect from January 2020, hence the businesses need to buckle up for the changes that they would have to introduce in the privacy practices of their company. According to a survey of 250 executives of businesses in California, 72% of them plan to invest in their IT infrastructure to meet compliance with CCPA, one-fifth of the survey respondent stated that their company plans to invest more than $1million on the compliance-related functions. The survey found that only 21% of the businesses in California are currently compliant with the new privacy regulations.

Social media:

According to a survey, 87% of shoppers say that social media plays a vital role in their shopping decisions. The businesses are aware of this trend, hence use this to market their product by using the easily available information on social media platforms.
Social media websites like Facebook will have to change their practices of selling the personal information of users to third parties. For selling this data to a third party the business would need to take the consent of its users.

Verification service providers:

Due to an increase in regulations regarding KYC (Know Your Customer) and AML(Anti Money Laundering), many businesses are using the verification services of third parties for verification of the end-users. The businesses availing the verification services would have to get the consent of the end-users before forwarding their data to verification platforms. The businesses providing the verification services have the most confidential data on hand, hence they must follow the provisions of the California Consumer Privacy Act.

Search engines:

The search engines like google would also be affected by the California Consumer Privacy Act (2018). The company has been selling the user data to third parties and making big bucks out of it, but now the company’s revenue from ads generation might fall because the users from California would have the right to not provide their personal data for ad generation or for selling it to third party users.

E-commerce businesses:

These businesses are taking the major advantage of the consumer data sold online. The user’s buying and internet surfing data is analyzed through AI-based products and the sale offers are made based on the preferences of the consumers. Hence, the consumers are indirectly forced to buy a product that they would not have bought if there were no ads on their browser.
Hence it is clear that Calfornia Consumer Privacy Act (CCPA) will reshape the privacy policies of the businesses around the world and especially the multi-million dollar firms. Buying and selling of consumer data have formed a huge industry, the businesses having access and so-called “rights” over the of consumer data has been exploiting the consumer data to make huge profits. The CCPA will give the rights into the hands of the right owners.

Online Fraud Prevention : 6 Steps That Businesses Can Adopt

6 Steps of Online Fraud Prevention for Businesses

With the rapid development in the online retail industry and banking industry, there is an increase in the fraudulent activities accordingly. New and emerging technologies are on one side serving the businesses in multiple ways, but on the other side, they are giving them a tough time. Fraudsters find loopholes and vulnerabilities in the system and exploitation allows them to perform malicious activities. These activities result in heavy fines and risks.
A huge amount is spent on online stores. According to a study, global e-retail sales amounted $1.9 trillion in 2016 which is estimated to rise to $4.06 trillion in 2020. Fraudsters have endless opportunities in the face of online stores and businesses. The businesses failed to comply with the security measures are prone to the cost of loss. Every $1 of the fraudster orders cost an additional of $2.62 to online stores and $3.34 in case of transaction done through mobile phones. The countries which issue cards are 2-3 times more affected by online fraud than the ones who do not. Credit card fraud is the most common. Fraudsters use fake credit card information and perform online transactions which at the end costs the online business.
How can online businesses prevent themselves? What steps should be taken into consideration? The techniques of fraudsters are getting advance. Therefore, the pace of online businesses to introduce betterment in the system should also increase. For any business, it is important to take serious steps in order to prevent themselves from online payment scams and credit card fraud.
Following are 6 steps that can ensure safety in their customer onboarding process:

Online Fraud Prevention : 6 Steps That Businesses Can Adopt
Need of Online Fraud Prevention System

54% of businesses are somewhat confident about the security of their system. Only 40% are confident, who say that their system is unaffected by any attack or bad activity. The reason is that most of the businesses give more importance to conveniency than security. These businesses then face heavy loss which costs much more than the cost of security adoption.

Customers need Protection

66% of the customers want a secure online Fraud Prevention System. They want their identity and personal information to be protected and not to be used in any malicious activity. These concerns demand online marketplace to take serious measures in order to prevent the data and money of their customers.

Prevent Money Laundering and fraudulent transactions

67% of fraudulent transactions remain undetected. Who belongs to these transactions? What is their identity? These questions should not remain unanswered as they carry a heavy cost. For money launderers, the online marketplace is an attractive target which can help them in money laundering.
There should be proper AML checks in the system which catches them on the spot and suspend their activities and transactions.


Fraudsters activities fluctuate with respect to time and behaviours. These activities must be monitored actively and so the adoption of updated technology should be ensured. The above steps are the primary ones which need to be the part of any online business. The need for security measures varies according to the business type and fraud potential risks associated with it. To mitigate these risks, a proper protection curriculum should be shared in the business environment. This can help in remarkable business development with respect to both revenue and reputation.

How API-based Technologies Can Transform the Future of Online Marketplace

How API-based Technologies Can Transform the Future of Online Marketplace

API Based Technologies: Application Programming Interfaces (APIs) are giving advanced ways of digitizing businesses. Multiple online marketplaces are extending their services using external and internal APIs. This helps online businesses increase customer traffic by providing them better user experience. It is estimated that out of 7.7 billion global population, 1.92 billion people are digital buyers (which is increasing incredibly). The reason is the advanced API technology that is playing a key role in the online marketplace in attracting customers. There are around 224 marketplace APIs available which include internet APIs, browser APIs, and a variety of product APIs. Online businesses are going beyond basic API management to create a full-fledged API marketplace to connect the producers and consumers rapidly.

What are APIs?

APIs are a set of procedures and functions through which applications are built to access the services, data or features of a system. Today, companies avoid the installation of multiple software and their management. All they do is that they use APIs as SaaS (Software as a Service) and integrate several APIs depending upon the need of their business. Those APIs then connect the producers and consumers to provide desired services. API management on the other side is a platform that manages the APIs. It helps APIs behave evenly according to their standards and services. API management supervises all the security, speed and compliance-related policies provided to the businesses.

How does the API-based technology works?

Multiple APIs (depending on the need) are integrated with the application. The API interface runs and delivers information from the application that you are using to the system over the internet. The response from the system then comes back and delivers the data to the application. Through each step in this process, the interaction is continuous between the system and the application. APIs ensure the interaction between the services, data, applications, and systems. This data varies from cloud applications to the online marketplace, it is the responsibility of APIs to assure connectivity.
The market volume of AI-based technology is rising rapidly from the last five years…
A broad interest in enterprise-oriented technologies is seen in the past few years. These technologies include SaaS, AI, big data, IoT, and microservices. APIs are the focus of all these areas. The communication and deliverance of several services are possible through APIs. Today, the accumulation of customers in the online marketplace due to the integration of APIs with their system. These APIs provide better user experience and facilitation to the companies.
Salesforce is a software company that generates its 50% revenue through APIs. Whereas, eBay is generating 60% and Expedia is generating 90% revenue through APIs. 75% of mobile applications use internal APIs to provide its customers with multiple features and services. The integration of Facebook and Twiter APIs is increasing the demand for more APIs.

API Based Technologies and Online Marketplace

Identity Verification APIs

Over $445 billion is lost annually due to security breaches. The security of online stores should, therefore, be taken into consideration. Security APIs are available for e-commerce stores to integrate with their system that provides encrypted APIs to secure their system from attacks. Identity verification APIs help online businesses to identify and verify the customers onboard to avoid credit card fraud and online payment scams. Anti-Money Laundering (AML) and Know Your Customer (KYC) Complained APIs are integrated with the systems to ensure that fraudsters do not enter into the system and perform malicious activities. There are multiple verification techniques available through APIs that system integrates according to their system need. Verification can be done using multiple documents, facial recognition, video verification or handwritten notes. For these verification methods, separate APIs are available which can help the online marketplace to secure their system. Even if it is an online account opening service by banks, the banking industry needs to ensure that the traffic coming into their system is honest. API Based Technologies help financial institutions which are offering online services to their customer to verify that they are protecting their system from all kinds of vulnerabilities.

Speed Efficient APIs

To provide customers a fast onboarding experience, many speed reliability APIs are available that ensure robust processing. These APIs not only facilitates the customers but also at the administration end, provide smooth system management. Also, shipping and delivery APIs are part of the online marketplace to track the parcel until it is delivered to the customer. These APIs help reduce the error rate and complexities associated with the sorting done manually. To coordinate with the customer regarding their parcel status, shipping, and delivery APIs help to achieve the goal of better user experience.

Payment Handling APIs

Payment Handling APIs provide the customer with an easy interface to add their card and payment details. These APIs help both customers and administration analyze and manage transactions properly.

Future Prospects of API based Technologies

In natural language processing, predictive analytics APIs are emerging. These APIs combine enormous data which includes text, visual data, location, network and information gathered through mobile phones. The APIs are getting more secure with encryption and cryptographic technologies. APIs are profiting several industries with many reliable services which include commerce, retail, financial services, the gaming industry, and entertainment.
In the future, APIs will be managing all the data more efficiently and jump into the data management of the sensor’s level. The advance level security of blockchain will be made sure through APIs. the data gathered through IoT devices will be managed and flew through APIs. Not only this, almost all industries are using APIs to advance their systems to provide better user experience and generate more customers.
Just like Amazon Cloud Service is using data-driven through API Based technologies, a different system integrating with APIs can utilize the API-driven data for multiple processings and training purposes. That data can be used for verification and AI model training purpose. By examining the endpoints of API, documentation will be generated automatically.


An online marketplace is revolutionizing with the help of multiple integrated APIs. APIs help reliable communication of applications with another system. They also provide user-friendly interfaces to engage the customers. These APIs are internally linked with their system to provide a secure, reliable and better user experience.

Biometric Authentication: Its Applications and Associated Constraints

Biometric Authentication: Applications and Constraints

Biometric authentication is considered as an advanced way of ensuring Know Your Customer (KYC). The purpose of controlled access is achieved through biometric scanning which verifies a person’s identity based on the physical characteristics. The biometric data for each individual is different. This data is already stored in the biometric security system which identifies and verifies the identities. Today at the organizational level, 65% of authentications are based on biometrics. The global revenue generated from biometric verification was around $21.8 billion in 2018. The adoption of biometric techniques is increasing rapidly especially in the financial sectors and at Government level.
Biometric verification includes facial recognition, fingerprints, hand geometry verification, iris scanning, vocal verification, retina scanning, and signature dynamics. The biometric technology converts all the data into digital information and formats which are further processed under complex algorithms. These algorithms are based on Artificial intelligence (AI) and Machine learning (ML). The pre-stored data is matched against the data entered into the devices and is verified.

Importance of Biometrics In KYC

“KYC” refers to the personal information and details required by the regulated companies and the financial institutions in order to allow trusted individuals to enter into the system. To ensure the security policies of the company, customers are verified through biometrics. This helps the companies avoid the risks of online payment scams, money laundering activities, and credit card fraud. The biometric verification of customers has resulted in an efficient and accurate authentication system. Also, this reduces the time which facilitates both customers and organization.
Biometric innovation facilitates banks in performing their verification processes without letting them wait in the queues, answer queries, and filling large forms. This would help quick verification and secure record keeping. This secure implementation of KYC management process will protect the system from identity theft and money laundering as well as shape the system with the Government regulations accordingly.

Industrial adoption of Biometrics

Multiple industries are using biometric technology as it fits in their usability.

  • Reduce Time Theft:

Businesses are using the biometric attendance of employees to reduce time theft and increase productivity. This would help in a proper time track of when the employee is entering and leaving the workplace.

  • Medical Industry:

There is a 105 increase in the use of biometrics in the medical industry. Medical Industry is using it for the authentication of patients to help doctors find out the medical record of the relevant patient. Also, for the identification of blood donors, biometric verification is in use.

  • School Management:

Schools are using it for the maintenance of records and attendance of the students and teachers. The automated record keeping will help efficient management.

  • Travel Industry:

The travel industry is using biometric with a record of 11% increase. To verify the tourists and travelers, biometric authentication helps in quick processing and avoiding restricted candidates to travel.

  • Finance Industry:

Similarly, at the Government level and in financial institutions and banks, biometric verification plays a key role in the authentication of customers. To ensure KYC compliance of the customers, it is necessary to perform their biometric. 46% of top-ranking biometric mobile applications were banking apps.

  • IT Industry:

In the IT industry, mobiles have embedded biometric technology through which they unlock their phones in order to keep their information and data save. Mobile applications are developed that need online biometric verification to help businesses authenticate their end-users. The biometric study shows that the use of biometrics in mobile apps will increase from 5% in 2018 to 70% in 2022.

Biometric Verification in Mobile Phones

Biometric verification in mobile phones is getting common nowadays. It is estimated that by the end of 2019, 100% of the mobile shipments would include mobile phones with biometric technology. Also, the wearables and tablets will also be empowered by biometric verification by the end of 2020. The verification through fingerprint, face and iris scanning are the most common password features of the devices today.
Online verification and authentication are done in order to perform any transaction or to purchase something from an online store. The online marketplace is inserting the biometric technology in their system to allow the transaction and purchasing through mobile applications. Also, the banking applications (mobile wallet apps) use biometric verification of their customers if they want to open an online bank account or to perform a transaction.

Biometric Authentication Risks

Businesses consider biometric technology the top-notch solution of identity verification and authentication. Unfortunately, that is not the case. The physical characteristics through which verification is done are unique for each individual. Any negligence in record and data keeping can result in heavy risks and reputational damage to businesses. Below are the major security risks associated with the adoption of biometric technology:

  • Privacy Breach:

In case the server storing the data gathered from biometric devices get hacked, all the sensitive information of individuals will be lost which can result in the malicious activities done by the hackers and blackmailing of individuals. The blame would definitely be on the organization. For this to handle, biometric verification must be done under secure boundaries.

  • Error in Device:

Any error in the device can lead to the incorrect status of accepting and rejecting an individual. This could be due to the failure in capturing the features of individuals properly.

  • User Acceptance:

Biometric verification in some cases is hard for the customers to perform. The customers who do not want to share their personal information with any third parties do not agree on their authentication on the basis of biometrics.

  • Identification copy:

In case, any fraudster copy your biometric record maybe fingerprint or some other feature, he could easily get all the access to the stuff you are the owner of. This loss can never be recovered in any way. Therefore, it is necessary to take serious security measures while stepping into the use of biometric technology.


Biometric authentication is revolutionalizing globally as it helps the verification of the individuals in less time efficiently. Industries are innovating themselves with the use of biometric technology. The security risks associated with this technology should be mitigated in order to prevent any loss that could result in heavy fines and loss.

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