Top 13 Cybersecurity Predictions for 2020

Top 13 Cybersecurity Predictions for 2020

Cybersecurity threats are ostensibly ubiquitous in this internetworking infrastructure. Internet-based technologies and their revolution with intend to increase efficient connectivity came up with severe challenges in the form of attacks. This digital world, no surprise will be prone to high-frequency diverse attacks in the near future. From end-user devices to database and internet data centre servers, all are equally vulnerable to cyberattacks. Whether they are increased software and hardware fragmentation that makes the system vulnerable and easy for cybercriminals to exploit or bad actors in the system who act malevolently in the systems, cyber-risks are not going anywhere.

Therefore, it is crucially important to stay a step ahead of malicious elements to shield the systems better, integrate security, and protect sensitive information, as well as organization reputation concurrently. An assessment of threats dictates the cybersecurity trends to emerge this year. The following are some cybersecurity predictions for 2020.

Major data breaches

The year 2019 hunted with data breaches badly that is expected to continue in the year 2020 as well. A major data leak is predicted to happen in the cloud. However, some cloud services use security tools and algorithms to protect the system from a data breach, but it is not sure whether they take assistance from third-party or have their built-in tools. However, in 2019 huge data breaches occur varying from Orvibo, whose database leakage compromised 2 Billion people, TrueDialog Data Breach that affected more than 1 Billion consumers, leakage of 4 billion social media profiles and many more. Collectively about 1200 total data breaches are recorded in the previous year. More will be flooded in the year 2020 due to easy availability of data on the online web and insufficient account verification measures that could make credential-stuffing and identity theft fraud easy for hackers. 

Frequent use of biometrics for authentication purposes

Taking into account the number of data breaches and uncontrolled access being a major cause of cyberattacks, biometric authentication will be used in online platforms to authenticate each onboarding entity, instead of using traditional identity authentication methods such as PIN/password authentication. Using unique biological traits of individuals in the form of facial recognition, biometrics will be penetrating the security industry to fight against the security issue of unauthorized access over confidential data. The biometric sign-in system will be integrated with online systems in 2020, to authenticate each identity.

Cybersecurity Evolution

In the year 2020, the duties and role of a Chief Information Security Officer (CISO) will be redefined to provide updated strategies and techniques to protect the network against cyberattacks. In generating higher revenue, CISOs will be playing an important role by revamping the approaches towards cybersecurity. Awareness will be given in companies and businesses to protect their confidential databases against severe cyberattacks.

Artificial Intelligence will be harnessed

Businesses will be taking advantage of technological advancements in the year 2020 by deploying Artificial Intelligence solutions and replacing human effort with machines. AI-based algorithms are used to streamline business operations. Not only this, but fraudsters will also be using AI techniques to forge the online systems and fool them. While moving with the pace of businesses, hackers will be using innovative ways to commit attacks and exploit weaknesses in the system. Now we would have to see whether machines will be protecting themselves better or techniques of fraudsters will be stronger.

Artificial intelligence can also help in customer identification in online platforms using facial recognition technology and a strong algorithm to fight against the spoofing attacks of online users and identifying individuals with better precision and accuracy. AI will also be used to probe the entire network, detect vulnerabilities and to develop a strong traffic screening system.

Attacks on IoT devices

The Internet of Things (IoT), in the year 2020 will be prone to major data breaches. Although minor attacks have already seen in the previous year but being IoT penetrating into various industries, it could be a hunting spot for cybercriminals. These attacks can take down a huge network of connected devices, attack the central hub where all the data is transmitted or even data can be tempered in transit. The year 2020 could be tough for the IoT industry. 

High-frequency supply chain attacks

Through malware and malicious executable injections, attackers will attempt to supply chain attacks by accessing the legitimate software supply chains. These attacks will be targeting third-party service providers and software vendors during the phase of software development. The level of supply chain attacks will increase attempted in more sophisticated ways in a huge volume. The year 2020 could be tough for dealing with supply chain attacks and malware would be hard to remove from the system even if they are formatted. 

5G network security

5G networks are the latest cellular network technology that introduces high-speed internetworking services having a high data rate and bandwidth. The infrastructure that supports 5G networks will be prone to vulnerabilities that could be exploited by attackers. Bad actors in the networks will be forging them through maliciously programmed IoT devices. 5G supply chain is sensitive with respect to malware and poor hardware and software design. Hence, the year 2020 could leave a negative impact on the 5G network when it will be compromising highly confidential data and response against the triad of information security i.e. confidentiality, integrity, and availability.

Ransomware Targets Clouds

Ransomeware targeted major platforms with virulent pulls against industries. In the year 2020, ransomware will be focusing on the cloud. Businesses that are moving all their data to clouds and servers are highly predicted to get attacked with ransomware. Moreover, the businesses adopting IoT technology and opt to secure all the data over the cloud can be prone to such attacks. Virtual environments and databases lie in the same category. 

Multi-Factor Authentication will Reside in Mid-sized Enterprises

In 2020, mid-sized companies will be using multi-factor authentication methods. It is due to major data breaches that took place in the dark web in millions in which unauthorized access to the major reason. Ensuring multi-factor authentication deters the risks of uncontrolled access over user accounts and confidential databases. Moreover, online users that use insecure passwords can be protected from several cyberattacks. 

Multi-factors authentication methods were considered a long and complex process for users that resulted in increase process abandonment rate but now it has got streamlines. Using biometric authentication methods and SMS-based authentication, the process ahs got frictionless which can be seen with the high adoption rate by mid-sized market. 

Card-not-present fraud will increase

The emergence of e-commerce will stay the same or may increase in the coming years. Fraudsters are using innovative ways of attacking this industry. Among those, Card-not-present (CNP) fraud will be the most common in the year 2020. CNP fraud is expected to reach 14% by 2023 which will cost retailers about $130 billion. Omnichannel shopping attacks will be rising by stealing the user credentials across these channels. 

‘CASE’ concept will arise

Connected, Autonomous, Shared, Electric (CASE) trend will be emerging. With the rise of 5G technologies and IoT devices that promote the highly interconnected networks and the use of open-source software, bad actors will be exploiting weaknesses in the network. Malware injection and attacking the backend systems, mobile applications and their infrastructure and all autonomous technologies will be highly prone to attacks in 2020. 

Evolution of smart cities

Smart cities will be harnessing embedded technologies and cybersecurity. The development of smart cities using smart technologies will continue to grow in 2020. Using innovative solutions to real-world problems such as traffic control, lighting, safety operation, and mobility solutions, smart cities will be formed. However, cyber-attacks such as malicious executable injection in remote transmissions will also be noticed that will impact the daily life of millions.

Automation in cybersecurity defenses

Aginst cybersecurity defenses, advanced technologies and algorithms will be used. Through Artificial intelligence and neural networks based underlying technologies, automated systems will be developed that will differentiate the traffic in the network and allow only honest nodes to communicate and deny requests from unauthorized ones, AI-based technologies will be automating the cybersecurity defense systems in 2020. 

What to expect from Booming Identity Verification Market in 2020?

What to expect from Booming Identity Verification Market in 2020?

Technologies hatched by fourth industrial revolution such as the Internet of Things (IoT), robotics, virtual reality (VR) and artificial intelligence (AI) are changing the trends in marketing and revolutionizing the way we deal in every sector. The same is the case with businesses. These revolutions have changed the way one does business. The fourth industrial revolution including Artificial intelligence augmented reality, robotics has bought a lot of digitizing on the table. This automation has eased many processes that used to take days previously but now can be done in the blink of the eye. Identity verification is one of those procedures that can now be done digitally saving a lot of time and effort. It involves a systemic change across many sectors and sides of the business. 

AI-powered Identity verification solutions include biometric verification, digital document verification, 2-Factor authentication, and age verification that help fight many frauds in the business sector.  The identity verification industry is expected to reach USD 18.12 billion by 2027 as it grew steadily in recent years. Authenticating identities is important for financial institutes globally. To protect a business from cybercrimes, money laundering, account takeover, and identity theft frauds it is mandatory to have a sound identity verification solution integrated into the system. Financial criminals are becoming more sophisticated with the passage of time their game is getting strong. Identity authentication of customers and completing due diligence has never been more difficult or more important. 

What is Identity Verification- A Deep Dive:

Customers and businesses communicate digitally in this digitized world. In this busy world, no one has time for face-to-face meetings or direct contact neither it is considered as a suitable option. Manual authentication trends for physical confirmation of an individual are long forgotten due to the time they take. Digital identity verification technology is now used to verify the individual by facial recognition technology, address verification, document verification done digitally in seconds. The significant increase in digital fraud has caused the loss of millions for individuals and businesses. Businesses are always the easy target of cybercriminals and fraudsters. Customer identity verification KYC as well as business verification KYB is essential to save businesses from intruders and scammers.

Types of Identity Verification Solution:

Following are the types of digital identity verification solutions:

  • Biometric  Verification Solutions:

The biometric authentication system is designed to perform due diligence on the customers by using one type of biometrics – face verification. Facial verification scans the face in real-time and detects unique facial features through a 3D depth perception technique. 

The liveness detection system captures minor facial movements to ensure that an original person is making the verifications. Liveness detection ensures that a paper backed or photoshopped image is not used for verification. Facial verification delivers highly accurate results and that too swiftly, within seconds. It makes fraud prevention and KYC/AML compliance quite easier for the people. 

  • Document Verification:

Digital document verification scans the document picture using OCR technology, the information can be taken from the document. It also authenticates if the document is real and original. By this customer’s authentication can be performed without putting them on a frustrating wait of days. 

  • Address Verification:

Establish proof of residence for verified deliveries and user identity. It scans utility bills, bank statements, etc by using OCR data extraction.

  • 2-Factor Authentication

Verify authorized users remotely through their mobile phones. It provides quick remote user authentication by sending Personalized code fro verification. It is an auto-code generator to provide user access.

  • KYC and KYB Checks:

KYC is essential for businesses and organizations as per regulatory authorities. KYB is also important when dealing with other businesses for the partnership to make sure the other business is a valid company and not a shell company.  These days there are some serious digital security concerns for all sorts of businesses because of scams like digital fraudulent activities, data breaches, and ID theft are on the rise and abusing the systems easily. Such activities are translating a significant revenue loss for the businesses that fall victim to these criminal activities. 

  • AML Screening:

AML screening is a process that defines the role that how a company monitors accounts, detects and reports financial crimes to relevant authorities. AML screening tackles intrinsic money laundering risks the company faces or can face. Customer Screening for Anti-Money Laundering (AML) is the aim of completing due diligence to prevent and deter money laundering, terrorist financing, and other financial crime and fraud. It ensures that no one from the PEP list or with criminal background is becoming part of a business. 

Factors fueling the growth of ID verification market:

Following are the factors that are greasing the wheels of digital ID verification market:

  • Increasing Data Breaches:

It will not be an exaggeration to say that 2019 was a year of data breaches. During the first nine months of 2019, around 7.9 billion records have been compromised according to Risk-based Security Reseach and are expected to be 8.5 billion in the whole year. As per statistics, these numbers are up 112% as compared to mid-year 2018. To mitigate the risk of data breaches it is crucial for any business to give access to the right person only to the sensitive data.

  • Stringent Compliances:

According to the Bank Secrecy Act (BSA) act and the patriot act 2001  KYC is mandatory for banks to know who they are dealing with. The same goes for AML directives for combating the financing of terrorists (CFT) and to hinder money laundering. KYC and AML checks are necessary for financial institutes to perform. It provides a win-win situation for both businesses and customers by filtering high-risk customers for businesses and verifying customers in real-time.

  • Enhanced customer experience

Digital ID verification solutions eliminate the annoying pile of paperwork making the business one step ahead and more customer-friendly. Customers will appreciate your attention to safeguarding their identity, building rapport, and brand loyalty that too in real-time. Replacing traditional checks with face verification saves a lot of time and effort. You do not need to memorize or change passwords since the work is being done by your biometrics in lesser time. 

  • Increased Security for Rising Scams :

It’s more important than ever to verify the identities of customers due to an increased risk of terrorist funding and money laundering in this digitized world. ID verification technology is a great tool to instantly verify the identity of any visitor quickly and easily, making both customers and employees feel safer. It fightbacks forgery like account takeover, fake identity, identity theft, credit card fraud, etc. 

  • Easy Integration in System:

Identity verification solutions have another advantage for businesses and that is it can be easily integrated into the system. No additional hardware is required at times for these verification solutions such as for face verification technology. This provides businesses with an edge providing another reason to adhere to this technology.

Taking into account these problems, every business wants to protect itself from fraudsters, saving them time and cost for fulfilling the orders of customers who don’t exist, henceforth preventing them from accessing the business and carrying their illicit activities. The use of digital verification services is a safer and cheaper solution in the long run with real-time verification results. The ID verification and authentication solutions are quite vigilant solutions for businesses since they make it easy for organizations to achieve a secure customer base while enhancing the customer experience as well. These are the reasons why businesses are adhering to these technologies making the ID verification market boom tremendously. 

6AMLD of EU - A Detailed Insight

6AMLD of EU – A detailed insight

European union’s another anti-money laundering directive is in the pipeline. And this time the union is aiming for uniformity in AML/CFT practices across member countries while keeping up with changing international regimes.

The estimated amount of money laundered globally in one year is 2 – 5% of global GDP, or $800 billion. And in the EU money laundering accounts for up to 1.2 % of the EU’s annual GDP, or around $225.2bn (€197.2bn) in 2018, according to a 2017 report by Europol.

Recently the 5AMLD was implemented on 10 January 2020. The fifth directive mainly targeted loopholes in certain sectors. It addressed the loopholes in prepaid cards, virtual assets, and precious metal dealing. The major change that came due to 5AMLD is that the identity verification threshold for prepaid cards is reduced from €250 to €150. This threshold for remote transactions is €50. 

Now the 6AMLD is in the next big change in the AML/CFT regimes of the EU. The member states are required to integrate the new directive into their national laws by December 2020 and the reporting entities are required to completely implement the new laws by June 2021. The new directive is drafted well to close any left loopholes in AML/CFT regulations.

Key Features of 6AMLD

The 6AMLD is not only about fulfilling minimum regulatory requirements but about changing the attitude towards AML/CFT. The reporting entities need to go another mile to play their role in eliminating money laundering.

Key Features of 6AMLD

1. A list of predicate offences

A list of 22 predicate offences is provided in AMLD6. It includes offences related to environmental crime, cyber crimes, tax crime, and self-laundering. The directive includes ‘aiding and abetting’ and ‘attempting and inciting’, which means that criminal liability will be extended to people or businesses that are used in the criminal offence. Businesses will be liable for penalties if money laundering is channeled through their system due to a lack of preventive measures. 

The offenses are clearly defined in the official journal of the 6AMLD. The reason behind this measure is to create uniformity in the AML/CFT measures of member states. Because lack of uniformity is one of the major reasons behind money laundering scandals in EU member states. 

2. Increase in non-compliance penalties

The 6AMLD has clearly defined the penalties for businesses and individuals. 

Natural persons 

The individuals involved in money laundering are called “natural persons” in the 6AMLD. Non-compliance penalty is increased for the natural persons. Now a sentence of four years is non-compliance penalty, it was one year previously. As mentioned in the official journal

In order to deter money laundering throughout the Union, Member States should ensure that it is punishable by a maximum term of imprisonment of at least four years.”  

Also, the monetary fine is increased to five million Euros. 

Legal persons 

Businesses are described as “legal person”. In case a business is found to be a part of a financial crime due to lack of AML measures or negligence it will be liable for these below-mentioned penalties:

  • Exclusion from entitlement to public benefits or aid
  • Permanent or temporary disqualification to perform commercial activities
  • Judicial winding up
  • Temporary or permanent closure
  • Placed under judicial supervision

3. “Aiding and Abetting” and “ inciting and attempting” 

The scope of AML regulations is increased to” aiding and abetting” and “ inciting and attempting”. The 6AMLD official journal clearly states, “Member States shall take the necessary measures to ensure that aiding and abetting, inciting and attempting an offence referred to in Article 3(1) and (5) is punishable as a criminal offence.”

4. Alignment with international laws

The Journal states that the member countries are required to implement the 6AMLD while keeping their AML/CFT laws aligned with international laws. It will increase transparency in financial infrastructure. 

This means the reporting entities (businesses/ legal persons) will be required to follow the new regulations that will be aligned with international regimes.

5. FATF recommendations EU AML laws

The 6AMLD will require the member countries to align AML laws with the FATF recommendations. The tax crimes are defined as a criminal offence and the preventive measures are required to be designed in light of revised recommendations of FATF. 

6. Not missing on the virtual currencies

The sixth anti-money laundering directive requires the member countries to take concrete steps towards elimination of risk coming with these virtual assets. The reporting entities such as crypto exchanges, digital asset exchanges, cryptocurrency dealers, crypto wallet providers and businesses accepting cryptocurrency payments will be facing some major AML/KYC compliance scrutiny in 2021. 

How businesses should prepare for the change?

The ultimate effect of changing regimes is on the businesses. The new directive is drafted to change the perspective of businesses towards AML/CFT compliance. The new regulations of “Aiding and abetting”, and “ inciting and attempting” have changed the compliance requirements. Businesses will be liable for heavy penalties if they’re found to be involved in the criminal offence. Even if they’re used as a tool or a channel. 

The reporting entities are required to have an in-depth understanding of the risks and threats and to take necessary steps to eliminate the risk of any of the listed criminal offences being channeled from their platform. 

The businesses are expected to have a completely updated setup for compliance requirements. Digital identity screening could prove to be a reliable partner of the businesses in this regard. As it provides global coverage in the screening of individuals and businesses it helps reporting entities maintain a global risk cover against bad actors.

Power of Robotic Process Automation

The Power of Robotic Process Automation in the Banking Industry

Entering into the fourth industrial revolution, business processes are shifted to the digital sphere. The concept of “physical presence” to get work done is now blurring. Remote working is trending all across the globe and so is the automation. The work that was once done by humans is now being replaced by machines. In upcoming years we are going to see this notion gaining grounds more than ever.

It is no longer a secret that in this era, banks and other financial institutions are struggling to evolve continuously to enhance their operations and providing their customers with an exceptional experience to strive in a competitive market. The banking industry is facing immense pressure to boost its efficiency and utilize the resources effectively in an optimized way. 

The challenge to optimize cost and enhance efficiency while balancing security and customer experience is driving the adoption of Robotic Process Automation (RPA) in the banking industry.

The Power of RPA in banking 

RPA in banking is mostly concerned with the use of automated software to build an AI workforce and virtual assistants to maximize efficiency and reducing operational costs. RPA in the banking industry is quickly evolving since it serves as a useful tool to address the increasing business demands and optimize resources with the help of service-through-software models.

In order to successfully embrace this technology, institutions must adopt a strategic and well-researched approach. The potential growth of RPA in banking is expected to be worth $2.9 billion by 2022, as compared to $250 million in 2016. It shows that in upcoming years, machines, systems, and bots will be executing the majority of the tasks, hence, expanding the capacity and providing the workforce an opportunity to focus on higher-value tasks.

Over the past few years, the regulations around financial institutes have become more stringent than ever. Banks and other financial institutes are reported to spend more than $321 billion on their compliance operations and the fines faced due to violations, and nearly $270 billion on just compliance operations; in the last decade.

With time, the operating expenses are rising and the stringent regulations impose hefty regulatory fines. This results in slow processes and brand damage leading to poor customer experience. Hiring more people to find new solutions to manage operations while cutting down operational costs is not a reliable answer. The solution has to have the ability to efficiently balance everything; i.e. Robotic process automation.

Integrating RPA enables banks and financial institutions to lesses manual efforts, mitigate risks, offer more reliable compliance and most importantly enhance the overall customer experience. It assists the banking industry in processing operations that are repetitive in nature. Moreover, it increases productivity by engaging customers in real-time.

Though RPA is a comprehensive process that requires structured inputs, robust training, and governance but once implemented successfully, it can take complete control of the processes.

4 Significant use-cases of RPA in Banking

Robotic process automation is serving financial institutes in multiple ways. Some of the use cases are as following

Customer Onboarding

Customer onboarding is the most critical and time-taking process in financial institutions because multiple documents require manual verification. The identity verification solutions – a domain of RPA – are adopted by multiple institutions to streamline their onboarding processes. These solutions based on AI and machine learning principles make the whole process contactless and friction-free by automating te steps. 

AI-powered document verification services integrate optical character recognition (OCR) technology to automatically extract the data from the documents and populating the form. The captured information is then verified against the user-provided information. If the verification is successful, the data is automatically entered into the customer management portal.

Automating customer onboarding through ID verification not only eliminate manual errors but also saves a lot of time and effort put in by the employees and customers. RPA has made customer onboarding a real-time frictionless process done within seconds.

Know your customer (KYC)

After the incident of 9/11, the regulations around financial institutes are continuously evolving and becoming more stringent. Initially introduced as a part of the US Patriot Act 2001, KYC requirements have become obligatory for every institute dealing with money. Banks being the primary source of funds transfer are continuously under the radar of watchdogs.

Since both KYC and AML are purely data-intensive processes, RPA is most suitable for them. The customer identification program (CIP) is one of the fundamentals of the KYC process. With the help of identity and document verification, the real identity of an individual can be verified and ensured. Moreover, RPA helps organizations in anomaly detection, i.e. suspicious transactions in real-time hence, hindering fraudulent transactions. 

The implementation of RPA is very effective for financial institutes in terms of saving time and cost as compared to traditional KYC processes that take around weeks and immense manual effort.

Automatic Report Generation

Risk and compliance reporting is a key operation of every financial institution. The banks are obliged to generate compliance reports for fraudulent transactions in the form of suspicious activity reports (SARs). Conventionally, the compliance officers and dedicated teams are responsible for the manual generation of reports. And that makes reporting a repetitive task requiring too much time and effort.

RPA applications based on AI principles can read and process the lengthy compliance documents and automatically extract the required information populating the SAR forms with the help of OCR technology. In fact, for more optimized reporting, the system can be trained with multiple inputs to efficiently process the various parts of the report.

This eventually reduces the operational costs, human efforts and saves the time consumed to successfully perform the task.

Account Opening

Just like customer onboarding, RPA has made the account opening process convenient, quick and accurate. It eliminates the transcription errors between the banking system and new account requests, which automatically improves the data quality of the system. Through RPA integration, multiple banks are using robots for their account opening process. What these robots do is fetch information from the forms and automatically fills data into different host applications.

Such automation results in swift, error-free, and quick data entry process. This results in reduced turnaround time and cost while enhancing the customer experience.

AML solutions: Eliminating the risks of money laundering

AML Solutions: Eliminating the Risks of Money Laundering

Money laundering is a serious crime that can have serious and long-term consequences for your business. Oftentimes, small business owners are offered business opportunities that they can’t simply pass up. It looks like easy money, so they accept and start serving as a facilitator for money laundering. According to a PwC survey, global money laundering transactions account for roughly $1 trillion to $2 trillion annually or 5% of global GDP.

What is money laundering?

The basic concept of money laundering revolves around transforming dirty money into clean money or in a more formal way, money laundering is the process of making a large amount of money generated through illegal activity appear to have earned through legitimate sources. 

Money laundering is typically done through 3 steps: placement, layering, and integration. 

  • Placement is to put illegal money into a legitimate financial system such as a bank
  • Layering is to mask the source of money through a series of transactions and bookkeeping techniques
  • Integration is to withdraw laundered money from a legal account and utilize it

Know more about money laundering process in this demo:

The money laundering is generally accomplished through currency exchanges, wire transfers, smurfing, and shell companies. Moreover, the globalization and digitalization have expanded the capabilities of money launderers, making it more difficult to identify the source of the transaction. Online banking, P2P services, money exchange businesses, and now cryptocurrency have made it difficult to detect the illegal transfer of money. 

However, laundering money is a serious offence. It could lead to heavy fines, penalties and even jail time. According to International Comparative Legal Guide, the maximum penalties for laundering money are fines up to $50,000 or double the amount of property involved, whichever is greater, and imprisonment up to 20 years for each violation. 

Risk of money laundering for small businesses

Small businesses are often the victims of money laundering. Criminals target small businesses because the owners of such businesses lack experience and knowledge about the risks involved with a certain type of business dealing. Further, they don’t have allocated resources and knowledge about Anti Money Laundering (AML) compliance.

Protecting your business against money laundering

By adopting anti-money laundering solutions and practices, you can protect your business from money laundering threats. 

What is Anti Money Laundering?

Anti-money laundering or AML is a methodology or a policy that governs: how the company monitors transactions, detects and reports financial crimes to the regulatory authority. For this purpose, companies adopt different AML solutions that screens and tackles money laundering risks, which the company faces or could face in the future.

AML compliance was first coined with the formation of the Financial Action Task Force (FATF) in 1989. The main concept for its formation was to devise international standards to prevent money laundering and to promote these standards.

In past AML laws has been slow to catch up with cybercrimes, since most of the AML solutions were deployed for traditional banking institutes. However, amid the digital transformation, FATF and other regulatory authorities started focusing on digital transactions and devised stringent regulations to prevent money laundering using digital platforms.

To follow and comply with these regulations, businesses need AML solutions that could detect suspicious transactions and perform due diligence during the onboarding process.    

Automated AML solutions for enhancing AML process

Artificial intelligence and machine learning have been transforming different operational sectors in the finance industry. Automating the tasks that involve data processing and analyzation, filtering out false alerts, and identifying complex criminal conducts are some of the tasks that are being automated using artificial intelligence. To prevent money laundering, banks and other financial institutes use AI-driven AML solutions. These systems are used to identify and categorise suspicious transactional activities.

AI is deemed crucial for performing repetitive tasks while saving time, resources and efforts, which can be reallocated for other tasks. Natural language processing and machine learning are usually adopted for automating AML screening tasks. 

6 Ways AML Solutions can prevent Small Businesses from Money Laundering

Here are ways in which AI-driven AML solutions have revolutionised customer and business screening.

Enhanced due diligence

Artificial intelligence automates the enhanced due diligence process. It starts by taking steps to ensure you know who you are dealing with, understanding and monitoring their transactional activities and accessing their risks of money laundering.

Monitoring transactions and activity

AI-powered risk-based solutions and procedures help monitor ongoing customer activity to detect fraud, as well as money laundering activities including but not limited to placement, layering, and integration of funds.

Reviewing odd patterns of transactions

In most of the cases, launderers use hundreds of different accounts to perform small transactions that can easily surpass without being detected. While it’s difficult for humans to identify such transactions, automated AML solutions can easily identify such smaller transactions and reveal a pattern of illegal activity related to money laundering or terrorist financing.

Identifying Politically Exposed Persons (PEPs)

PEPs compliance is mandatory for firms. It is crucial to identify the risks associated with your customers. According to FATF, any person who is or has been holding any public office or function is a politically exposed person and to do business with any such entity, organisations should perform enhanced due diligence and monitor their ongoing transactional activities.  

Money laundering is a serious risk for small businesses. In addition to facing criminal charges and hefty fines. Involving in money laundering activity intentionally or accidentally could lead to fines and may damage your brand reputation. With this in mind, small business owners need to study and comply with AML regulations. 

Identity verification solutions to fight against faces of fraud

Identity verification solutions to fight against faces of fraud

In this digital world, billions of smart devices are circulating, connecting and communicating with each other regardless of their location. From online shopping to gaming, banking to investing, learning to teach and serving to digitize, smartphones are used. In 2019, a survey shows the number of smartphone users to be 3.2 billion, whereas users will increase up to 3.5 billion in 2020 and 3.8 billion by 2021. The reason being, pervasive access to the internet, world and its economy is changing drastically. Along with this, the expectations of online users are changing and the need for seamless customer experience and services is increasing. 

Here, in the game, comes security. Security is a challenge for online businesses to balance simultaneously with customer experience. 

Banking Industry, more specifically, online transactions and payment systems are prone to several cyberattacks. Bad actors that are facilitated through such platforms unknowingly are harmful. They misuse the system and perform malevolent activities. These activities vary from identity theft and account takeover attacks to severe ones such as money laundering and terrorist financing. Businesses need to take in place stringent measures such as while securing platform, customer experience is not compromised.

Innovations and Innovative Fraudsters – A Race

As technology is growing and solutions to real-world problems come onto the surface, they are secured using innovative measures. On the other hand, fraudsters are using similar technologies and hacks to fight against the security shields. It is an ongoing race. After the passage of time, businesses experience some major ruin and come up with a more stringent way of securing platforms that again are exploited by bad actors. Cybercriminals overwork and find out vulnerabilities in the system to launder money across the world, steal identity credentials of legitimate digital users or commit credit card fraud. 

Marketplace fraud is increasing at an exponential rate, especially during online transactions. In peer to peer marketplaces, scammers create a product listing and scam buyers. Digital users’ personal and financial information is obtained through phishing attacks, malware injection and data breaches. With this information, customers create synthetic identities that seem real, misuse them in the online world. It is a challenge for the online marketplace to encounter these security issues keeping intact the customer experience.

One-stop Solution for Frauds – Identity Verification

Most of the online frauds and financial crimes take place as a result of uncontrolled access over confidential data. Whether it is a database, program section, online user account or organization’s confidential data store, the game starts when an unauthorized entity becomes part of the system. Identity verification is a one-stop solution that keeps online fraud miles away. Online identity verification ensures both security and enhanced user experience. In real-time, within seconds, an individual is identified and verified that helps businesses allow only honest traffic to make it part of their system.

Businesses have identified the need for identity verification into their system. The identity verification market that valued about 5.52 billion U.S. dollars in 2018 worldwide is expected to reach as per forecast to about 18.12 billion U.S. dollars by 2027. Moreover, being customer verification, a regulatory requirement in various sectors to deter the risks of financial crimes such as money laundering and terrorist financing, businesses are taking the verification process seriously. 

Identity verification covers both Know Your Customer (KYC) and Anti-money Laundering (AML) practices within an organization. While onboarding a customer, businesses can verify the identity of their customer to make sure that they are who they say are. This can be done at the time of account registration in which, other than identifying an individual, it is screened against various global watchlists and sanction lists. AML screening is performed to deter the risks of criminal entities from entering into the system. 

In the identity verification process, these two terms are involved while actually implementing it. For instance, while conducting biometric authentication of an individual such as facial recognition, in the first step the facial features of an individual are identified and then they are matched with the features stored previously in the database in the form of a mathematical formula. If real-time captured features match with the one present in the database, identity is verified. The distinction between both these terms is important.

How does identity verification work?

The identity verification process involves three steps:

Collection of Information

In this first step, identity verification includes collection fo personal information from the user. Personal information includes name, address, date of birth, etc. All this information is collected at the time of account registration.

Ask the user to upload a picture

In the second step, the user is asked to upload a supporting piece of evidence in the form of the official document as an identity proof. The document could be 

  • ID card
  • Passport
  • Driving license
  • Credit/debit card

Information Verification

Once the identity document is uploaded, the document template is identified. The data from the document is extracted using OCR technology. During this process, the authenticity of the document is also checked. If the user-entered information and then one extracted fro the document match, identity is verified. 

Common types of Fraud

Following are some common types of frauds that identity verification can better deal with:

Identity Theft

Fraudsters use various fraudulent techniques to steal the identity of online users. Through credentials stuffing in which an executable runs that stuff all possible combinations of username and passwords to get the right one and after accessing the account, steals personal and financial information. This information is then sued to perform various malicious activities in the digital world. Using a stringent identity verification measure such as biometric facila recognition, no unauthorized entity could fool the system. Only the one having unique facial traits could access the account. 

Credit Card Fraud

A fraud in which fraudsters use a credit card that is revoked, stolen or reported lost and find something valuable in it. Moreover, sometimes the identity of a real person is used to receive the credit card issued on another person’s name. Identity verification can be sued by identifying an identity against the credit card. 

Account Takeover

In account takeover fraud, the fraudsters first access the account of a user changes the user-provided information such as username and password and then perform fraudulent transactions. This account can no longer be used by the real user anymore. The identity on the account is used for various illegal activities. It is the responsibility of the online platform to ensure a secure mechanism of user login to make sure that customer information is well-protected and no criminal activity is facilitated through their platform. 

Fake identity

Using fake identities and credentials, fraudsters create accounts in online platforms and manipulate the system. For instance, in social media platforms, fake accounts are created that are sued to troll, harass and spread misinformation on the social web. To combat this, identity verification measures should be taken and each onboarding identity should be verified against biometrics or document to make sure that no unauthorized or fake identity misuse the system in any way. 

To sum up, identity verification solutions are used to fight against a variety of frauds. Various industries that are prone to online frauds can ensure controlled access over confidential data such as user accounts and organizational database to deter the risks of bad actors.


40 recommendations of FATF – Shaping the future of your business

Financial Action Task Force or simply FATF is an active global authority that never fails in surprising the world. It’s always in the process of finding loopholes in AML (Anti Money Laundering) or terrorist financing regulations. 

If you think the FATF recommendations are none of your business then your business might be in a grave situation. Let’s see how. 

History of FATF

FATF was formed in July 1989 by a Group of Seven (G-7) Summit in Paris, initially to examine and develop measures to combat money laundering and drug trafficking. But later, after 9/11 in 2001, the authority also incorporated terrorist financing in its efforts to mitigate the financial crime. Then in 2012, it added efforts to counter the financing of proliferation of weapons of mass destruction.

The primary motives of FATF are to mitigate the crimes that may prove to be a threat to the global financial infrastructure. In an effort to achieve this goal, FATF aims at developing and promoting effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing, and other such threats to a sound financial infrastructure. 

The primary goal behind all these crimes is monetary gain and FATF plans to close all the loopholes in the global financial infrastructure that might be used by criminal entities. So it is significant for governments to take these regulations seriously. Once your government takes FATF seriously, trust me you should be careful too.  

Members of FATF and Affiliated bodies 

FATF has 39 full members and one observer member, Indonesia. Recently Saudi Arabia became a full-time member of FATF after being an observing member for some time. On the other hand, Pakistan and some other countries are thriving to become a member of FATF and remove themselves from blacklist or grey lists of FATF. 

Other than countries, FATF also has some organizations as associate members and observing organizations. 

A brief of 40 recommendations of FATF

1- Identify financial crime threats prevailing in the existing policies and systems of a country. 

2- Draft and implement policies and procedures in the financial infrastructure of the country to counter threats highlighted in the previous stage. The policies should be drafted to prevent crimes such as money laundering, terrorist financing, drug trafficking, and weapon trading. 

3- Design risk preventive measures for financial institutions and other reporting entities to comply with. These preventive measures are designed in agreement with AML and CFT (Counter Financing of Terrorism) recommendations of FATF. These preventive measures include record keeping, transaction monitoring, customer due diligence, AML screening of customers, etc. 

4- The concerned law enforcement entity of the country must be equipped with powers and authority to implement laws and keep an eye on the reporting entities while taking risk prevention measures. 

5- To practice accountability at all levels within a system. To maintain a fair judiciary in the country.

How the recommendations of FATF affect your business

The ultimate entity that is affected by the regulations of FATF is the business community. And among all, the financial sector is the one that is exploited the most by financial criminals. Other industries affected by the recommendations of FATF are, Fintech, E-commerce, legal, precious metal dealers, art dealers, real estate, etc. 

The common AML/CFT regulations implemented on businesses as per the recommendations of FATF are: 

  • Performing due diligence on the customers
  • Performing AML screening on businesses (in B2B relationships)
  • Keeping a record of the customer data
  • Maintaining a compliance department
  • Reporting suspicious transactions of customers to the concerned authorities
  • Performing AML screening on the UBOs (Ultimate Beneficial Owners) in case of serving business as a client

So it is clear that the effect of AML regulations is two-fold. First, the country regulations and policies are drafted in light of these recommendations, then these regulations are implemented on the reporting entities. It might be businesses or government authorities. 

Compliance is not an option 

No matter if you’re a startup or enterprise if your industry is in the list of reporting entities, you must comply with the AML regulations. 

In case some new recommendations are given by FATF, reporting entities are affected by the new changes in their local regulations. For instance, the new regulations of FATF issued in 2019, for the cryptocurrencies, art dealers and legal professionals will affect these businesses in member states and observing members. 

Operating in FATF member country means more growth opportunities

Being a member of FATF is not an easy task. Countries that are referred to as complete members are considered as low-risk countries so the businesses operating in those countries are more likely to have growth opportunities. Businesses and investors prefer low-risk regions for business. 

On the other hand, the companies in grey/blacklist are considered as high-risk entities. So if your country is trying to implement FATF regulations then it will bear high profits for your business once it is a member or out of grey list of FATF. 

FATF regulations are implemented globally  

The AML/CFT regulations of FATF have a global impact. If your business is originated in a non-member state, you’ll be required to follow the stringent AML regulations while operating in a member state. 

As FATF plans to eliminate financial crime at a global level, the scope of its recommendations is also global. So, businesses have no other option but to take concrete steps to prevent financial crime risk. 

How automated AML helps in swift verification of your customers along with quick compliance

Automated AML screening conducted through Artificial Intelligence (AI) is an easy way to get done with stringent AML/CFT regulations. The AML regulations are becoming stringent with every passing day and it is not an easy task to conduct manual verifications on customers coming from every corner of the world. 

On the other hand, now FATF has also issued the first draft of digital ID system guidance so it means the regulatory authority is giving due significance to automated screening solutions. Now is the right time for businesses to avail this opportunity and share their compliance burden. Outsourcing an AML screening solution will share half of your compliance burden.

To wrap up, FATF is in a continuous process of financial crime mitigation in the world. It is expected that more countries will either become members or observing members of FATF to gain credibility in the global trade. It is high time your business should opt for compliance benefits over non-compliance penalties. 

Biometrics technology a key to key-free world

In 2016, the biometric market in the United States reached $3.52 billion U.S Dollars and is expected to grow significantly in the coming decade. The global market for biometrics verification solutions is over USD 2.1 Billion according to estimation. According to a survey, 48% of the businesses are happily adopting biometrics for verification and providing access to their customers. Biometric identification can help a more secure yet cost-effective alternative for user access than the traditional old method of identification like PIN and passwords. 

Biometric Technology Taking Over Identity Verification:

A study revealed that almost by 2020 biometric technology for user authentication will be used by 90% of the business. It is a fact to reckon that the compliance regulations are quite strict when it comes to the collection of biometric data of any person. Biometric verification technology is falling foul of privacy concerns but still, its usage is vastly increasing in almost every sector like healthcare, education, travel industry, financial institutes, etc for security purposes. 

Biometric technology is taking over the verification processes as we know it. Facial Recognition Technology is even Pioneered at Olympic and Paralympic Games Tokyo 2020.

Most of the people may have concerns like they say biometric is jeopardizing personal privacy but even then the reality remains eminent that it brings many benefits to our daily lives in this era of digital frauds. It has the following benefits:

  • Biometrics ensures accuracy
  • The system expels major safety threats
  • Many biometrics solutions are cost-effective
  • It is easy to use
  • User acceptance is increasing

Following are the major areas where biometric technology can be seen taking over the identification process:

Airport Security

Making passengers skip security clearance lines and changing air travel experience. Face biometrics can remotely identify known criminals. Passengers board faster with self-services biometric kiosks. This technology is widely used in airports to increase the workflow and to run the security process more accurately. Face verification techniques are replacing tickets in the near future. You just have to show your face to get identified and to get all processes done in the blink of the eye at airports. Cool isn’t it?

Attendance System

Making employee attendance more accountable. Eliminating buddy-punching and timesheet fraud. Enhancing productivity and saving money drained in hours not worked. 

Bank Security

Saving banks from cyber-criminals as well as physical threats. Making sure visitors are who they say they are. This technology is used to gain customer’s confidence with enhanced security. Banks need to comply with KYC and AML checks per regulatory authorities. In order to perform identity verification process, biometric technology is a great help in streamlining the cumbersome procedure. This technology is being widely used to detect and know the clients in business sectors like banks and other financial institutes to meet KYC regulations.

Cashless Shopping

Replacing traditional payment cards with biometric ones to secure them. Payment authentication with a PIN or an OTPP has become a thing of the past with biometric cashless shopping. According to Biometrics research group inc. the report, the worldwide mobile payment transactions are expected to reach $750 billion by 2020, with more than 700 million users. Biometric technology for payments has enormous advantages and a competitive edge in the market.

Criminal Identification

Safeguarding civil society with biometric identification of criminals. Criminals can be monitored remotely with biometrics and can be caught before any incident takes place. The study revealed that Americans are totally fine with copes using facial recognition technology to track criminals. Facial recognition is used by the FBI and other police departments spread across California, Maryland, Florida, and Ohio as a new weapon to track people. 

Financial Transaction Management

Making users more accountable for the transactions they perform. Management of financial transactions becomes more efficient with biometrically enabled transaction management.  

Hotel Check-In

Eliminating need for keys, magnetic stripe cards, chips or RFIDs to check-in to hotels. No more episodes of key or card loss incidents, only unrestricted access with guest biometrics. 

Internet Banking

Protecting internet banking customers by eliminating passwords and PINs. Users no more need to remember complex passwords and stay stranded at log-in screens. Account takeover fraud and identity theft risks can also be mitigated by using a biometric security system for online banking. 

Mobile App Security

Making app security reaches the next level with biometric authentication. Your fingerprint or face is more than enough to order food or book a movie ticket.

PC Login Security 

Making PC security unbreakable via biometrically enabled login. Forget passwords, now a touch of your finger or faceprint is enough for you to log in to your PC.

Pharmacy Theft & Fraud

Making pharmacy operations more accountable for biometric identity authentication. No more pharmacy theft and fraud using fake identities or false insurance claims. Hospitals were major target of cybercriminals for data breach cases. To protect private data of patients biometric technology plays a vital role by providing access only to verified persons. 


Biometric Verification- All You Need To Know

Biometric verification is not only effective at identity verification but it also has a competitive edge when it comes to processing time. Biometric verification not only enables a business to onboard clients with negligible risk of fraud but also performs this function in no time. This technology is perfect for both onsite and offsite verification of an upcoming user. The following are the important things to consider before choosing a biometric verification solution:

  • Method of biometric verification
  • Which regulations are governing biometric authentication in that territory where these solutions have to be implemented.
  • The targeted audience and their ability to flawlessly perform this. 
  • It should be checked if the verification has to be performed remotely or on location.
  • Before opting for a biometric authentication solution users should also be decided beforehand.

When it comes to business identity plays a vital role and biometrics plays a vital role in this, it is a key component in apprehending and prosecuting a business. Identity theft that led businesses to pay penalties so businesses really need to know who they are dealing with what they are giving access to. Biometric verification has created a lot of ease for this cumbersome verification process. Biometric verification provides a shield to the business from an array of frauds related to identity theft. For organizations to ensure security due to the sheer range of dynamic frauds biometric technology has created a lot of ease. This technology is an easy solution for a cumbersome procedure of identity verification. 

Biometric technology is quietly taking over space wherever user identification and authentication is a requirement. Traditional recognition methods have lost grounds to biometrics, due to their shortcomings. Biometrics offers an ideal balance of security and convenience. Unlike traditional authentication methods, it elevates security but not at the cost of user convenience. Biometrics is a single solution that offers logical as well as physical security. It can not only replace passwords on computers but also the door lock it is kept in. With biometrics creeping into everyday life, the day is not far it will entirely eliminate other ways of identification and authentication.

Identity verification in freelancing- no more smoke and mirrors

Identity verification in freelancing- no more smoke and mirrors

Freelancing platforms are rapidly growing. In 2017, around 57 million Americans were freelancing and if the trends continue, over half of the Americans will be freelancing by 2027. These people include full-time and part-time freelancers. A good number of people hold 9-5 jobs and doing freelancing in their free time. This proliferation of part-time freelancing is leading people to a new kind of labor market known as Gig Economy.

The freelance market is being accepted in every part of the world since it has no boundaries. Today a freelancer can work from anywhere irrespective of their residence. All they need is the internet and a computer. This has led certain countries to rise and become the top freelance countries in 2019.

With the huge population moving towards freelancing platforms, the industry is facing some significant challenges, fraud being the topmost. In organizations, we are aware of employee fraud and now the freelancing industry isn’t safe as well. Fraudsters and scammers are paving their way into this industry to exploit valuable information and data.

Freelancing – the employer scams

Multiple freelancing platforms have been getting worldwide hype. Just like fraud has polluted various industries, the freelance industry is no exception. In the Gig economy, scams can be done from both sides, the freelancers and employers. A scam is something that most of the freelancers have experienced once in a while on different platforms. Such frauds not only cause financial damage but also badly affect talented freelancers on an emotional level demotivating them.

Freelancers need to focus on one thing that as a freelancer the relation with the client or employer is for short-time only. The bad guys are everywhere and as a result, this new workforce is becoming immune to the growing community of scammers – who are badly disrupting the mental piece and threatening people financially. The common scams freelancers encounter includes:

Offsite Payment and communication

The scam employers mostly target the individuals who are in desperate need of work. Judging the eagerness, employers convince freelancers for offsite payment and communication. This is a warning sign because of the offsite payment and communication, there is no proof or record of communication. Hence, after getting work done they just vanish without paying. In such scenarios, even the anti-scam team can’t do anything.

Avoiding Milestone Payment

Many freelancing platforms have this feature of milestone payments. It means that a certain percentage of the total amount of a project is paid over the completion of each course rather than paying at the end. The scam employers try their best to avoid milestone payments and convince freelancers for a joint payment after completion of the task. This is one of the biggest scams that the Gig economy face.

Freelancing – A threat to business security

Today’s employment landscape has dramatically evolved all thanks to the increasing popularity of freelancing. Organizations are actively adopting the idea of remote hiring through freelance platforms. It is a win-win situation for both employees and companies. This form of employment offers flexibility and freedom to employees in balancing their professional and personal life. Moreover, organizations enjoy notable savings on benefits like health and life insurance, retirement plans, paid leave, bonuses, etc.

With these immense benefits for both entities, there is no stopping the freelance craze anytime soon. However, in lieu of capitalizing on the growing trends, employers are overlooking a critical issue, i.e. data security. It is important to clearly understand the vulnerabilities and potential threats that freelancers introduce to your business and the regulations surrounding the freelancer security

In freelancing jobs, it is not at all possible for employers to provide their remote workers with company-owned devices. It means that the freelancer workers use their own devices to handle the company’s work or data they are allowed access to. This results in a critical situation for employers since their data and project is at the mercy of a freelancer’s whim. One mistake from the freelancer side can target the organization’s reputation in a blink.

According to the survey of IT decision-makers conducted in the U.K., U.S., France, and Germany, more than half of CIOs suspect that remote workers have caused problems with security and even the hacking.

Unveiling the bitter truth

As mentioned above, the threat to freelance industry is quite real and can happen in one form or another. The question arises that how to prevent such fraud from happening. We can’t treat a person unless we diagnose the disease. The same is the case with fraud and scams. In order to prevent them from happening, it is essential to know the causes and conditions encouraging freelancing fraud.

Every freelance site requires users to register themselves first on the site before building their profiles detailing their expertise. The standard registration process is almost the same for every freelance site. However, there is no proper verification measure to verify that the persons claiming to be freelancers are actually them. If they have provided their original information or they are just using fake or stolen credentials. The persons involved in these frauds and scams more often create fake identities and profiles to surpass the checks knowing there are no proper identity checks.

In addition, after creating the profiles, these masterminds upload impressive credentials and skills to attract more people. In case of freelancer profiles, employers and organizations automatically start considering them for their work because of their mentioned skills, henceforth, leading to fraud. Similarly, you can’t guarantee if the employer is a verified one or not.

To say, a lack of proper ID verification is the core driver around freelance fraud won’t be an understatement.

Identity Verification – The road to security

Taking into account the rasing fraud trends, the Gig economy is stepping up against the fraudsters. However, the adopted measures are still not that effective to deter fraud. Freelance sites need advanced identity verification services that can verify users’ credentials and documents in real-time, authenticating the identity. Integrating AI-powered ID and document verification services to the platform adds credibility to the site and leave a positive impact on the users regarding their security and privacy.

With the regulatory authorities making KYC verification a compulsion for every business dealing with money, the Gig economy is no more different. And identity verification is an integral part of the KYC process. It ensures that freelancing is a trusted marketplace for all users by confirming the identity of individuals through document verification. Moreover, these practices are vital in preventing financial fraud, money laundering and other illegal circulation of funds.

With ID verification, the users can become verified freelancers. In case the users are unable to become verified entities, the sites may trigger a warning badge or put account limitations or even worse suspend the account.

Digital Identity checks for secure and swift customer onboarding

The digital transformation of businesses continues apace, driven in part by regulations that mandate enhance customer privacy and protection. Other driving forces of digital transformation includes technologically sophisticated consumers, the global increase in the use of digital channels, as well as protecting firms and consumers from financial crimes.

While speed and security are two basic things customers demand when opening a bank account, when it comes to customer identification and verification, the manual process can be slow and tedious, in turn contributing to high customer abandonment rates. On top of this, humanly errors could lead to inaccurate results.

According to a recent Refinitiv survey, 53% of the respondents confirmed that they undertake KYC verification checks during onboarding, but only 46% of these checks are successful. Interestingly, among the surveyed companies only those embracing digital identity checks appear to be more successful at performing KYC checks(47 per cent) than those who don’t use technology (28 per cent).

Survey also revealed that 51% of the relationships with clients had not been subject to any formal due diligence check during customer onboarding and only 39% of respondents confirmed that they perform ongoing identity checks in real-time after onboarding.

These compliance gaps could somehow justify why financial crimes remain widespread. Respondents overwhelmingly that digital identity checks can help to cover these gaps.

Secure identity checks are a regulatory requirement for all financial institutes including but not limited to banks, money service businesses, and investment banking. KYC and AML regulations demand running checks on any individual or business while opening an account.

Types of digital identity checks

Document Verification

Document verification is the process of verifying the identity of a person by matching the details mentioned in the authentic documents. Most of the time, government-issued ID cards, driving license, passports, bank statements and utility bills are used for verification.

Customers can scan ID documents using a webcam or upload a picture of their identity documents. The required information is then extracted using Optical Character Recognition (OCR) technology. The following information is validated in online document verification:

  • First and Last Name of the user
  • Forged or Photoshopped documents
  • Document’s format type
  • Document’s Expiry date

Address Verification

In the digital verification scenario, the address of an individual user or a business could be verified by asking the user to upload a picture holding ID document displaying their address. Secondary documents to be uploaded by the user should also contain the official address. The address on both of the documents is then matched and verified. 

Knowledge-Based Authentication (KBA)

KBA is an online identification method that incorporates security questions that can only be answered by the authentic users. For instance, asking for the mother’s maiden name or name of your best friend.

It’s considered more secure than passwords because it’s easy to remember. However, these questions could easily be breached by guessing or social engineering.

2-Factor Authentication (2FA)

As an added security layer, 2FA combines two different authentication factors: something you know and something you have. It solidifies account protection by enabling an extra security layer. An email or an SMS with a verification code is sent to the user on their device that should be available to the user when accessing their account. 

Passwords alone are not enough to prevent fraud. Hackers can easily breach passwords using different techniques such as brute force attack, phishing, and social engineering. This is why 2FA or two-step verification is a necessary identity check.

Face Verification

The biometric is the most robust identity check because it adds the most important authentication factor: something you are. Among different biometrics, fingerprints and face are the most used. With the advent of smartphone cameras, facial verification is the easiest way to verify the customer.

Users can upload a selfie or a video using their smartphone and at the backend, facial recognition technology immediately matches the selfie with the picture on ID document and authenticate customer in real-time and accurately.

Benefits of using digital identity checks     

Digital identity checks are already being used by financial institutions. The benefits of using digital identity verification solution include:

  • High accuracy and better compliance
  • Time efficiency
  • Enhanced security, as the outdated passwords, are easy to hack
  • Low operational costs – Employing digital solutions reduces the manual labour and with it the cost involved in manual processing
  • Enhanced customer experience

Performing identity checks at the speed that customer expects and with the security compliance and fraud prevention demands isn’t difficult to achieve if the right processes and right technologies are in place.

Facial Recognition Technology Pioneered at Olympic and Paralympic Games Tokyo 2020

Facial recognition has grown by leaps and bounds with the arrival of the sophisticated pattern-matching abilities of modern artificial intelligence technology called neural networks. On one hand, leading cities like  Massachusetts, and San Francisco, California are to bar police from using pervasive computer surveillance technology, on the other hand facial recognition technology is going to used for Tokyo Olympics 2020. It is the first time the Olympics is using facial recognition technology.  It won’t be a wholesale replacement for the old ways: Accredited personnel at the Olympics will still have to wear traditional ID lanyards, Intel and NEC said. But the facial recognition system will be required: if someone loses their lanyard or tries to get access with one that’s stolen, the facial recognition system will block them.

Who is going to provide the system?

NEC Corporation, a Tokyo 2020 Gold Partner, will be providing the face recognition system at olympics. The facial images of every accredited person will be collected beforehand and stored in a database; these will be used to verify identities at accreditation checkpoints. Facial recognition system from Japanese electronics giant NEC and chipmaker Intel will be used to get where athletes, sponsors, journalists or volunteers at the 2020 Olympics in Tokyo need to be.

“Facial recognition improves security and efficiency by being able to confirm a picture ID against the face of the person seeking to enter a facility with greater speed and accuracy than human staff,” NEC said.

Intel with core i5 processor and the company has announced to provide a range of technologies as an official partner of the global event. NeoFace will be deployed for physical access control at venues event staff, athletes, media and volunteers. 

The Tokyo Organizing Committee of the Olympic Games (Tokyo 2020) has partnered with International Olympic Committee and other partners, Intel will also provide a computer vision solution for 3D Athlete Tracking, VR training for venue managers, and processing for the Cisco-powered digital networks.

Intel provides a VR experience and hosts an esports tournament prior to the Olympic Games. It also provides a call and response beat for the audience to clap and respond beat for the audience to clap along using their artificial intelligence capabilities. 

Intel & Olympic Related Events

Intel will be involved in other Olympic-related moves, too:

3D Athlete Tracking (3DAT)

Intel develops a technology called 3DAT (3D Athlete Tracking) that uses data about player movements broadcasters can use to boost instant-replay videos. An AI system processes video data to generate the overlay graphics.  

Global Esports Gaming Competition

In parallel with the Olympics in Tokyo Intel also is helping to run a global esports gaming competition. It also includes participation from gaming companies Capcom and Epic Games where Players from an initial group of 20 countries will compete in the videogame event. 

Virtual Reality Training

Athletes and organizers can use to visualize arenas and other facilities by virtual reality training realms built by Intel.

Purpose of Facial Recognition Technology in Tokyo Olympics

Following are the reasons how facial recognition technology will be enhancing the security of the Tokyo Olympics:

Physical Access Control

Physical access control is the process to control who, where, and when to provide access. It determines who is allowed to enter or exit the system, where a certain person is allowed to enter or exit, and when they are allowed to enter exit or enter. With FRT these only recognized persons are given access. The system will match the faces in the database and provide access when a face verified by the system. 

Monitor Audience

This technology will be used to monitor audience activity throughout the matches to analyze if any abnormal activity is going on. This technology will help to provide assistance to anyone in the audience who will be seeking it. It will be a quick analysis of millions of spectators for many reasons. It can be used to count the number of advance present and regular fans can be monitored as well. This technology has previously been used in Taylor Swift’s concert to highlight her fans. 

Look out for Suspicious Entities

During audience analysis, suspicious individuals can be caught on camera. If anyone seems involved in any kind of suspicious activity he can be continuously monitored through cameras. This enhances the security system and provides speedy solutions. NEC will use hundreds of facial recognition systems around the Olympics facilities to speed up ID checks for accredited people.

Improve Comfort & Convenience

The 2020 Olympics organizers say the facial recognition is twice as fast as regular ID checks, meaning shorter waits in line, and that it’ll improve security and that too by preventing spoofing and unauthorized access into important areas in the venue. 

By using facial recognition technology security system becomes seamless and wok flow is smooth. It is just the face that is to be shown to get access to the ground. People will not have to wait in long ques to get access granted. This will improve the efficiency of the security system and provide convenience to the people. 

Facial Recognition Technology and Personal Data Concerns

The personal information storage of individuals will comply with the Personal  Information Protection Law and it cannot be said how long will the data be kept in the system. All personal data is managed appropriately during the games and will be securely deleted afterward that too under strict conditions. The photos of each accredited person are collected with their consent at the time of issuing the accreditation card somewhat similar to the accreditation process in the past games. 

Facial recognition technology will not be a replacement for old methods but will be used along with them. The accredited persons will have to wear the traditional ID cards. But FRT will be required to in case someone loses their card or tries to get access with a stolen ID card as FRT will block them.

“Facial recognition improves security and efficiency by being able to confirm a picture ID against the face of the person seeking to enter a facility with greater speed and accuracy than human staff,” NEC said.

So data stored will only be used for the purpose of security and will be discarded right after the event is over.

Facing the Future: FRT for FIFA World Cup 2022

According to the company CEO  of NtechLab, Alexander Minin, the company is in negotiation with FIFA and Qatar to supply its facial recognition technology for a pilot project at the upcoming World Cup of soccer. The company is also one of several reported to be in ongoing negotiations to broadly deploy facial recognition at large Russian airports.

The applications of facial recognition technology are growing great in number. We can not stop this tide but we can manage it by giving the related data in the right hands. This technology can provide enhanced security at the Olympic games with convenience and ease. The system has operated with a false rejection rate of under 2 percent providing more accuracy.

AI-Powered OCR to replace data entry in 2020 – A detailed insight

Living in the data-driven world, there is a huge demand for storing data from printed or handwritten documents to computer storage disk to reutilize and process the data for multiple business operations. Document processing is an essential part of business operations, yet it consumes quite a valuable time of the user. Data entry has always been a hectic job and organizations are striving to discover new ways to automate it. Whatever the solution is, it must have to be efficient enough to accurately fetch and populate data, especially in the case of financial and identity documents.

OCR technology has been invented to address this issue effectively. The automated data entry solutions are accurately replacing the work done by data entry operators. Originally created to replace the data entry process and with time OCR technology has come a long way.


What is OCR Technology?

Optical Character Recognition – commonly known as OCR – is a technology used for the mechanical or electronic conversion of images (scanned or printed documents, etc.) into machine-encoded text. OCR, widely used as a way of information extraction from passports, invoices, identity documents, bank statements, etc., is a prevalent method for digitizing the image text. The extracted information may be electronically displayed, edited and stored, which can be further used for cognitive computing and machine learning. Simply put, OCR technology is used to read and extract the data from image documents and then further used for pattern recognition.


AI-Powered OCR Technology – The Working

The old-school OCR technology wasn’t fully automated and couldn’t operate properly with manual supervision. The proper functioning required strict rules and templates. Still, these solutions couldn’t process context and had no self-regulating mechanisms; hence, making manual guidance mandatory.

The traditional OCR works quite well when it deals with documents whose formats and templates were pre-loaded into the system. However, this comes with a significant problem of flexibility. It means for every type of document a new template model has to be designed and loaded into the system. This is quite time-consuming and costly processes similar to the manual data population.

Therefore, artificial intelligence is being incorporated into OCR to come up with a flexible and reliable automated process. The working mechanism of such systems is based on three major stages and requires no manual interference.

1. Pre-Processing

For successful character recognition, the images are preprocessed using different techniques:

De-skew and Despeckle

Documents need to be aligned properly without any spots or crumpled/folded edges in order to accurately extract information or data from it. De-skew technique tilts the document a few degrees to make it perfectly horizontal and vertical. Additionally, in this process, the edges of documents are smoothened and spots are removed.


Binarisation is the technique of converting the colored image to binary image, i.e. grey-scale (black and white). It is necessary as most OCR algorithms work on binary images for the sake of simplicity. It also influences the recognition quality to a significant extent for making careful decisions on the provided input.   

Layout Analysis and Line Removal

It identifies the columns, paragraphs and distinct blocks, filtering out non-glyph boxes and lines, particularly in the case of tables or multicolumn layouts. This aspect of pre-processing enables OCR technology to identify text and data written in the form of columns so that the data extraction is thorough and no text is left un-scanned. 

Script Recognition

In multilingual documents, the scripts may change at the level of words, which makes the identification of scripts necessary before the character recognition process. It helps in enhancing the data extraction as the appropriate OCR parameters can be invoked for the specific script.

Character Isolation

Multiple characters combined due to image artifacts are separated for character OCR. This process is also known as “segmentation”. Segmentation of fixed-pitch fonts is easier and can be succeeded by placing the image on the grid. Due to the uniformity of the white spaces between characters, vertical lines least intersect black areas of characters. However, for proportional fonts, the more advanced approach is required because of the presence of irregular white spaces. 

2. Character Recognition 

Character Recognition works in two ways:

Pattern Recognition

Pattern Recognition works on the “Matrix Matching” algorithm, which compares the image to a stored glyph, pixel-by-pixel. It relies on the correct isolation of the input glyph stored accurately as per a similar font and scale. This technique works flawlessly for the typewritten document in the same font.

Feature Extraction

Pattern recognition can be ambiguous in the case of multilingual documents. Instead of identifying the character as a whole, feature extraction identifies the individual components of a particular character by decomposing it into “features” e.g. lines, line intersections, closed loops, line directions, etc. 

These features are then compared with the abstract vector-like representation of the character which makes the entire character recognition process computationally efficient. This whole comparison process is done using the “k-nearest neighbor algorithm” which decides the nearest match. For example, the alphabet “A” has three individual components; 2 diagonal lines “ / ” “ \ ” and 1 horizontal line “ _ 

3. Automated Form Population

Form populate can be seen as an automated data entry process. The stored data in the memory from ‘Pre-processing’ and ‘Recognition’ steps, is populated in the requisite fields of the verification form; saving the time of end-user. 

To increase the OCR accuracy for the document, the output is constrained to some post-processing techniques. “Near neighbor analysis” is one such technique, which uses the concept of co-occurrence frequencies to correct errors and identify certain words that should be written together. For example, “Washington DOC” is always written as “Washington D.C.

OCR as a whole in identity verification

As the world is moving towards digitization, the identity verification market is booming. Whether it’s about KYC requirement or fraud prevention, identity verification is becoming a significant part of every business. Gone are the days when customers used to verify their identities by physically visiting the organizations and showing their ID cards. Now the digital platforms require digital verification and document verification is an essential part of ID authentication. 

In online verification, the system requires customers to upload their ID documents to get their identity verified. Most of the time user has to fill the online form himself which eventually takes a user precious time. In the race of user experience, the verification process has to be quick and seamless with the minimum manual interaction. That’s how ID verification solutions are incorporating OCR technology to make customer experience frictionless.

Shufti Pro’s ID verification service is an example of such solutions for integrating OCR technology. The instant capture feature built on OCR quickly captures and extracts information from the identity documents, keeping customers from the mundane task of data entry. Moreover, the data extraction is applicable for both printed and handwritten documents. The whole process from data extraction to form population doesn’t take more than 2 seconds making the process fully automated and accurate.

An inside look at the need for AML in the e-gaming industry

An inside look at the need for AML in the e-gaming industry

Data analytics and trends show the penetration of the population into console-based online video games and smartphone gaming applications. Online video gaming platforms having microtransaction features tend to handle much of financial transactions on their own, they are not considered a bank or a saving association. Therefore do not lie under the regulations of the Office of Foreign Assets Control or Bank Secrecy Act (BSA). However, the facility of financial transactions to buy gaming assets are raising several security challenges in the e-gaming industry. 

Financial frauds, the major threat the e-gaming industry is prone to. Money laundering, a huge financial crime is facilitated using the gaming industry a medium. By selling digital goods and currency (in-game), money laundering activities are conducted. The rise of online gaming has opened the ways for fraudsters to conduct financial crimes in the complex environment in which players operate. The loopholes in the gaming systems are well-analyzed and misused by laundering millions. This is challenging for the e-gaming industry to regulate the sector and deter the risks of financial crimes. 

Moreover, money launderers use e-gaming platforms to convert embezzle funds into good money. The video game industry can reduce money laundering activities by taking in place dynamic AML practices that filter out the bad actors beforehand. 

Anti-Money Laundering and Countering of Terrorist Financing (AML/CFT)

To disguise the ownership of illicit funds, money launderers use several means to hide money or convert it into legitimate money. The money that is earned as a result of cross-border organized criminal activities is concealed by money launderers either by transferring it across the world or buying properties with that. This is what happens in the online gaming industry. Assets are bought with in-game currency and in the form of assets, money is laundered. 

Having a comprehensive AML and CFT program is not only a regulatory requirement but a business practice on which business reputation, as well as profits, are dependent. Moreover, to fight against the criminal liabilities facilitated through e-gaming platforms can better be avoided taking in place stringent AML and CFT actions. 

Player identification

Online casinos’ major concern is fraud prevention. Especially money laundering that is residing in the industry can better be prevented by identifying each onboarding player at the time of account registration and financial transactions. Customer Due Diligence and AML background checks should be implemented in real-time while onboarding a player. This will help build a clean customer base.

Player identification usually can be performed by verifying the identity details. By authenticating official ID documents, KYC compliance can be achieved. The real-time captured information is then validated against the updated global watchlists. AML screening is performed during identity validation in which various AM background checks are implemented that ensure the identity’s data against exclusion lists such as;

  • Sanction Lists
  • Government-issued Data Sources
  • Watchlists
  • Money Launderers
  • Criminal Databases
  • Politically Exposed Persons (PEPs) List

By collecting the extensive details from identity and validating them against criminal databases, online casinos and gaming platforms can build a compliance program that can help them comply with local and global regulatory obligations as well as protect their business from any monetary loss. 

Moreover, ongoing identity monitoring is equally important. One time identity verification can not help eliminate money laundering activities entirely. In-between identity verification deters the risks of malicious transactions and suspicious activities. Just to overcome the effort of identity verification, biometric identification can help in robust verification without compromising user experience and keeping intact the security perspectives simultaneously. 

Other money-laundering countermeasures

Other than verifying the identity of a player, countermeasures can be taken that prevent the direct and indirect approaches of fraudsters of laundering money. These measures are:

  • Detective and preventive controls in assistance with technology should be taken to investigate if some players are exchanging the information among themselves to cheat the gaming system and perform money laundering.
  • Preventive measures against identity theft should be taken to avoid the misuse of someone’s identity by the fraudster to launder money. 
  • The customer information collected at the time of identity verification should be protected from any uncontrolled/unauthorized access. 
  • The customer’s credit card details should be protected from unauthorized access.
  • Enhanced Due Diligence measures to combat money launderers from entering into a legitimate system.
  • Prohibiting direct payment system between customers.
  • Monitoring the transactions between countries and immediate blocking when money is sent to some country that does not register previously as the home country.
  • Reporting of suspicious transactions to the Financial Intelligence Unit.

Risk-based approach

Online gaming companies are required to evaluate the measures they have taken to counter bad actors and their malevolent activities in an online environment. Identification of risks and mitigating them to avoid severe circumstances is the priority of every business. Assigning each onboarding identity a risk rating can help prevent money laundering in the e-gaming sector. With the risk rating approach, gaming companies can develop appropriate AML and CFT measures to combat potential threats. 

Future prospects to combat money laundering in e-gaming

The online video gaming industry will be evolving in the years ahead and create new opportunities for enhanced monetization. By employing an enhanced identity verification framework, the e-gaming sector can proactively avoid regulatory fines and penalties. Identity verifications supported by AI-based and machine learning models that facilitate automation facility would be the future of combating money laundering from the online gaming industry. Hence, providing a financially safer platform and a secure environment from bad actors. Moreover, improved revenue generation opportunities for e-gaming seems to be on the way in years ahead. 

Top 8 Facial Recognition trends to watch in 2020

Top 8 Facial Recognition trends to watch in 2020

Facial recognition has been gaining prominence in recent times, owing to the benefits it offers over traditional security methods. The facial recognition market was valued at 5.07 USD billion in 2019 and is expected to reach a value of 10.07 billion USD by 2025. Face recognition is one of the most common forms of biometric authentication. 

As we enter a new decade, the use of artificial intelligence-powered facial recognition technology is expected to become more commonplace. From day to day tasks such as unlocking smartphones to identity verification in digital banking, our day to day interactions with face authentication software will continue to grow.

Whether it’s helping leading retailers like Amazon to identify the customers or assisting the governments in the airport and border security management to identify potential threats, face verification technology is changing the game across a wide range of sectors. However, the next decade is expected to see a major boom in the face recognition industry. 

In this article, we will discover 8 face recognition trends that are set to shape the landscape in 2020 but before that, we will discuss what it is and how it works.

What is Face Recognition?

Facial Recognition is a technology, which is capable of identifying and verifying a person using their face. It captures, analyzes and compares patterns based on a person’s facial features.

Now let’s take a deep insight into how we can expect our interactions with face recognition technology to increase as we move into 2020.

Top face recognition trends

E-Commerce and Digital Banking

In the world of digital services, issues of identity and authentication pose am a threat. It’s not easy to trust someone when they are not physically present. Traditional knowledge-based methods have already been tested and clearly, they aren’t the solution to online protection. Verification methods like passwords and emails are vulnerable to hacking and difficult to memorize.

For foolproof security, something more robust is needed and one of the solutions that experts believe to take over these methods is biometrics using facial features. Needless to say, face recognition technology is becoming commonplace in the online industry and is expected to be implied in digital transactions for fraud mitigation.

Personalized Customer Experience

Something that we can expect more and more companies to embrace is personalized customer experience and biometrics can enhance this feature. With customers able to login using their face, they will access personalized content specifically designed for them based on their preferences. Online education is one of the major sectors to adopt personalized customer experience.

Airport Security and Border Security Management

Delta airlines have already implemented face authentication technology at Atlanta airport. However, the company has confirmed that by the end of 2020, more than 20 airports will have facial recognition to improve the customer journey. Customers will be able to use their faces to check-in, check their luggage, and board a plane. 

Even though concerns were raised on the use of facial recognition for identification at the airport, however, 73% of the customers said that they would feel comfortable using this technology after the single pass through Delta’s curb-to-gate facial recognition system.

Health Care

Given the health care is under constant pressure from both physical and digital security breaches, the healthcare sector is investing in facial recognition technology to enable more advanced security and fraud prevention. From preventing health insurance fraud to detecting diseases, biometric technology is already being used in the health sector. Expected facial recognition trends in the health care sector in 2020 includes:

  • Tracking patients’ medication history
  • Detecting genetic diseases
  • Preventing health insurance fraud

Cardless Payments

Chinese payment systems are already ahead of the rest of the world with secure systems like AliPay and WePay. Face authentication presents retailers with more valuable data and it has the potential to remove shopping cart barriers. Amazon and other big e-commerce companies are expected to roll out their version of facial recognition for payments in 2020.

Tourism and Travel

Forget locking yourself out of a hotel room or having to take your key card everywhere you go. While booking a room, either in person or over the phone, customers will be able to register through their faces. In hotels that use face verification technology, the check-in time is reduced by 40%. Facial recognition technology is expected to be seen everywhere from flight booking to checking in at the resort.

Smart Technologies

With Apple launching FaceID, smartphones have become a big customer area where facial recognition technology is being implemented. Face recognition technology is also becoming prevalent in other forms of smart technologies such as smart TV and smart home security system.

Digital Advertising

As retail stores look to personalize customer experience for customers, facial recognition is being used to identify individuals and their demographics to present promotions and content tailored to their demographics. This might be a little controversial but this trend is to be seen around 2020.

Facial recognition is already being used and integrated into daily aspects of our lives and the future of this technology is an exciting one. While there are concerns raised over the use of this technology, people are still adopting and embracing facial recognition technology for improving their experience.         

Embedding online identity verification methods for enterprise security

Embedding online identity verification methods for enterprise security

The internet knows a lot about us now. And businesses are using this information to verify our digital identities. However, not all of this information is correct or publicly available. As more and more activity finds its way online, identity checks are becoming relevant to the establishment of secure platforms for individual and business transactions. 

The risk of online fraud and ID theft is real, with a rising demand for online risk mitigation. Enterprises must look into variable security information platforms to enhance security solutions across the board. Trends in identity verification depict high levels of growth, with the value of the market to grow to US$4.4 billion by the year 2027. 

The introduction of AI tools have opened up online identity verification systems to offer faster data  processing, compilation and assessment solutions. Technology is making swift advancements in detecting anomalies and catching fraud. However, as a final check, human experts still manage to provide valuable supervision to machine algorithms for higher accuracy and verification of user data. 

Online Identity Verification Solutions for KYC, KYB and AML compliance

To verify if a user is actually who they say they are, real life identity verification for online applications employ a great deal of automation as well as data analytics to implement identity theft protection methods.

Here’s a list of some of the most successful and commonly used verification methods:

Biometric authentication through face verification and liveness detection

The use of biometric features for authentication involves the use of unique biological characteristics to verify end-users. Presenting face, fingerprint, iris, voice or other behavioural metrics to ensure their live presence is a highly convenient and secure way to authorise login. As use cases spread to a large number of consumer services including healthcare, travel, and retail, customers are looking for identity solutions that can easily be integrated into smartphones. Cost effective solutions such as taking a simple selfie or presenting a card to a camera are being accepted by large digital audiences. 

Through cross device authentication services, customers can use a hand-held device to capture a video or a selfie and confirm their presence. An automated procedure fast-tracks the process and authenticates account holders with high accuracy. Advanced Identity verification applications powered by machine learning are also recording verification processes in real-time and storing the data in the form of timestamps, videos, IP location and device information. 

Document Verification

Digital verification methods can replace manual checking of customer documents to prevent online theft and ID fraud. The more customer attributes that can be verified through a given ID source, the more robust the authentication. The end goal is to achieve a high level of verification assurance across multiple systems and countries. 

Customers can scan ID documents in front of a webcam and allow verification APIs to extract and screen key customer credentials. In most cases, the use of optical character recognition technology (OCR) assists in providing verifications for several documents in different languages. 

Document validation includes checking: 

  • Full name of end-user
  • Photoshopped/tampered documents
  • Document expiry
  • Document format type
  • Address format

Address Verification

The authenticity of individuals and businesses can be verified in real-time using automated software that cross-checks addresses with official databases. Users are asked to upload photos while holding identity documents in order to match their face. Secondary documents containing official address are uploaded to verify the information entered by the user. Analysis is done via an API and the verification is also recorded. 

For e-commerce and other retail business, this translates into better management of chargeback fraud and improved reputation. Mailing costs associated with returned mail can be mitigated and high quality address data maintained for faster delivery time. Identity documents such as national IDs, utility bills, bank statements, and driver’s license, are verified for authenticity, to improve customer risk profiling and online identity fraud management. 

AML Screening

Businesses must ensure a high level of safety by vetting both individual customers as well as businesses before beginning transactions. International regulations now require that sources that may be involved in money laundering and terrorist financing be actively avoided and screened before onboarding.

Detailed background checks and sanction list monitoring for high-risk clients is a given for AML compliance programs. Simply entering the name and date of birth can reveal useful information about authenticity. Data on customers and businesses must be screened against international regulatory watchlists, sanction lists and PEP lists to ensure compliance with laws and regulations. Risk reporting and global compliance is made easier with AML solutions for fraud prevention. 

Ongoing AML monitoring is an essential part of process, as regular monitoring of clients assures that no illegal activity is recorded in recurring transactions. This is to ensure that client credibility is maintained over time and high-risk clients are marked with an ‘on-alert’ status.

Companies can be validated using a registration number in order to identify blacklisted entities. Background checks of the Ultimate Beneficial Owners (UBOs) can help in identifying individuals with a suspicious profile. As a long term business goal, financial risk assessment is improved by limiting compliance fines and penalties leading to unanticipated financial loss. 

Knowledge based authentication

This method of online identification requires customers to protect sensitive information with security questions that can be answered using personally identifiable information.

It is an easy process to employ since it doesn’t contain complex passwords or codes to remember. However, it is also easier to breach since such information can be guessed, discovered or sold. There’s no verification with official customer IDs either. 

2FA Authentication

As an added layer of security, 2FA solidifies account protection by double checking the possession of sensitive information by clients. A physical token or a numerical SMS code must be immediately available to the customer through personally held devices to gain access to online accounts. 

Passwords are losing their authority as a security measure for fraud prevention. Hackers can breach accounts using weak or easy-to-guess passwords and gain malicious access through single layer security methods. Customers are advised to create long passwords with complex characters to lower the probability of a breach. This hurts customer experience and often makes the login process tedious. 

Authorised customer account access through two-step authentication method includes the following steps: 

  • End-user is sent a personalised, auto-generated code at each log-in attempt
  • Authentication code is required to enter the code at login
  • API matches code and completes user verification 

Two-step online identity verification services provide a way for companies to manage financial loss for end-user accounts without compromising customer experience. Malware activity and phishing attacks can be prevented by strengthening security laters.

Initial Exchange Offerings (IEOs) - A Detailed Insight

Initial Exchange Offerings (IEOs) – A Detailed Insight

The advent of the Crypto industry brought decentralized and innovative fundraising ways. One of them through Blockchain projects is Initial Coin Offerings (ICOs). Security tokens are like digital financial securities such as bonds and stocks. Since the first ICO presented by Mastercoin in the year 2013, there are hundreds of ICOs today. The industry is undergoing a notable transition with similar other models such as Security Token Offering (STO) and Initial Exchange Offering (IEO). 

STOs are security tokens that are issued and sold to the investors just the way using crowdfunding methods such as ICOs, digital tokens are sold. Security tokens seem to reinvigorate the landscape of the crypto industry. 

Just like ICOs, with IEOs, investors can get new tokens (or cryptocurrencies) while raising funds for cryptocurrency projects. IEO is currently the most dominant trend in the crypto industry. In crypto exchanges, funds are raised on behalf of startups while taking in place due diligence and other commitments. On the exchange platforms, cryptocurrency projects conduct a sale of tokens where token issuers are supposed to pay a listing fee to exchange. Crypto projects then sell their token with listing on exchange platforms. 

The major drawback here for IEO is that it is not available to open public. Only the users of that particular exchange can participate no one else can. The others who want to participate would have to open an account with the exchange platform that is hosting IEO.

How does IEO work?

Initial Exchange Offering (IEO) process is basically divided into four stages; Plan preparation, Pre-IEO stage, IEO, and Post-IEO stage. All these processes separately discuss how IEOs are launched and how one can do them without any hassle. 

Plan preparation

This is the first stage in which tokens need to listed for IEO project. The startup needs to come up with the idea, check its feasibility, conduct a survey regarding its market need and position. Then look at the budget and investment plan to launch an IEO. For all this process, proper planning and experience in the relevant project niche are needed. Moreover, consultation with field and market experts can help better in analyzing the scope. The project should be remarkable to get listed on crypto exchange platforms. 

Once you come with the plan, look for partners that have experience in the field. A strong and talented team is really important as it helps in gaining more investors in the project. In order to launch the IEO project on a crypto exchange, there should be some work done beforehand to impress the exchange and get the project listed.

Pre-IEO stage

In this stage, choose some crypto exchange platform to pitch an IEO project. For this, there are some things to consider, make sure that you are well-aware of the committee and exchange’s norms while onboarding an IEO project. Keep everything ready and running while presenting, this increases the chances of getting selected by the crypto exchange. 

After selecting an exchange platform, write up a proposal document to present it to investors. That document should contain each and everything, from the purpose to market survey, stats and figures to development strategy, a roadmap to investment overview, budgeting to future scope. This helps impress the investors when a complete overview of an idea will be given, the chances of a project to get listed on the exchange platform increase. When ready with documentation, you are well to go with the development of tokens. 


In this stage of token developments, make sure that your budget meet teh requirements well. Funding hardcopy should be formed to present the investors that idea is achievable with this much development cost and market adaptability. When token get minted, the next step is to list those token onto the selected crypto exchange platform. If that exchange selects your project idea and you pass the KYC and AML stage, your tokens will list onto exchange platforms. 

Post-IEO stage

This stage is important as your tokens are listed by exchange. The next step is to market the product. Outreach your audience, promote the product by running several social media marketing strategies. 

Difference between ICO and IEO

Initial Exchange Offerings and Initial Coin Offerings are crowdfunding techniques. In ICOs token issuers are responsible whereas for IEOs startups look for exchanges to raise funds. In IEOs, a third-party in the form of a crypto exchange is involved whereas, in ICOs, crypto projects approach investors directly.  

IEO mechanism establishes trust between investors and token issuers more than it does in ICO. This is done by filtering out the bad actors in the early stages during the process of Customer Due Diligence. Identity verification beforehand helps exchanges build a healthy relationship between two entities. It helps eliminate bad actors, money launderers, terrorist financiers and other criminal entities from misusing the IEOs. 

Difference between ICO and IEO

In ICO, it is the duty of token issuer to manage smart contracts whereas, in IEO, exchanges themselves do this task. This gives a security advantage in the crowd sale. At the exchange side, all mandatory KYC (Know Your Customer) and AML (Anti-money Laundering) checks are implemented against each identity. These checks are conducted to ensure that no fraudulent identity is facilitated through the exchange. Investors and token issuers are identified and a healthy relationship is built being exchanges as an intermediary.

Collaboration with crypto exchange platforms helps token issuers reduce marketing efforts. As compared to ICOs, startups get better savings with IEOs. Moreover, startups can continue better contributions to their projects with stable customer base exchanges provide. 

With respect to efficiency and security, IEOs take edge over ICOs. One needs to register on the exchange platforms going through the stages of identity verification that include KYC and AML checks in which along with an entity’s identity verification, it is screened against various global watchlists and criminal databases. Being this primary advantage IEO exchanges are considered secure investment platforms. 

Once the entity is verified, the next step is to just fund the wallet with IEO supported cryptocurrencies However, the cost of IEOs could be a bit higher than ICOs. Nevertheless, IEO’s merits outweigh that cost. 

Why IEO over ICO?

There are many ICOs available today. Still why the team needs a different way of fundraising? The thing is IEO provides benefits over ICO that could be depicted by the percentage of population transitioning towards it. Running an exchange has always been a profitable business from trading fees alone. Following are some of the advantages of IEOs for exchange platforms:

  • Both IEO and listing fee can significantly vary between exchanges
  • Intermediary platforms between exchanges and token issuer reduce frauds and scams
  • The joint market is established with IEO team

Intermediary platforms serve as an additional layer of security that helps identify and authenticate investors before making investments. Before token sale, exchanges thoroughly authenticate the credibility of token issuers. 

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