FATF encourages Digital ID during Coronavirus epidemic

The Financial Action Task Force (FAFT) is advocating the use of digital identity technology to securely enable remote financial services for customer onboarding and transactions, during the COVID-19 outbreak. The global watchdog for money laundering and terrorism financing says that it promotes the complete use of digital customer onboarding and delivery of digital financial services in the light of social isolation measures during the crisis.

The regulator explains that fintech provides “considerable opportunities” to deal with some Coronavirus-related risks and promotes the use of technology to the “fullest extent possible.” While the Coroanavirus has brought the advantages of digital identity into sharp relief, the FATF has been pushing the issue for quite some time. In November it released a guidance paper advising FS firms to get ready for the digital identity revolution, which it declared had reached an inflection point. Now, it states that its standards allow firms to take simplified due diligence measures if they identify lower risks.

According to a statement, “The FATF calls on countries to explore using digital identity, as appropriate, to aid financial transactions while managing ML/TF risks during this crisis.” In England, the FCA has instructed financial service firms to advise customers to use selfies for their identification. They can also send scanned documents over email and receive codes from companies to verify account access.

In the meantime, the FATF is alerting firms to be vigilant as fraudsters take advantage of the COVID-19 scenario to conduct scams, including advertising and trafficking in forged medicines, offering fake investment opportunities, and engaging in phishing scams that prey on virus-related fears.