Customer due diligence in banking

How does CDD effectively help with AML Compliance?

CDD or customer due diligence in the banking sector and other financial firms is an important aspect of AML compliance. There are various international regulators that have strict guidelines issued over the years in order to clamp down money laundering and transference of funds for terrorist activities. United States’ Federal Financial Institutions Examinations Council on Customer Due Diligence (FFEIC) and the Financial Action Task Force (FATF) are among some of the major global organisations to set forth the regulations to combat financial crimes. 

Here are some of the basic pointers to help you understand the phenomenon of Customer Due Diligence for banks and other financial institutions along with AML compliance. 

Customer due diligence in banking industry

Customer due diligence means identifying who your customers are by verifying various pieces of information such as their name, address, date of birth, and official identification document obtained from a reliable and independent source. 

In today’s heavily regulated markets it is more important than ever to know your customers. Identifying them accurately using KYC processes for customer due diligence during the early stages of onboarding can ensure that your organisation does not lose money to frauds or that your institution is not charged with a fine from national or international regulators for non-conformity. The main benefit of the customer due diligence process in banking is therefore assessing the level of financial risk a customer may pose to your overall operations through a risk-based approach. There needs to be a solid effort on part of the financial institutions including banks to follow through the money trail, origin & destination of transactions, legality of the business, and revenue streams. International governments around the globe are increasingly stressing upon the importance of the customer due diligence for banks, and to have sufficient processes in place to verify and identify their customers. Customer due diligence in banking is important to prevent significant financial losses due to reputational, operational, and legal damages, caused by money laundering and related financial crimes. 

The customer due diligence process in banking ensures that the banks regularly maintain and update their policies to verify customers’ during onboarding and to determine the on-going pattern of transactions to detect money-related crimes through suspicious accounts. 

With the right customer due diligence in banking practises, banks and other financial institutions can drastically lower the risk of financial crimes and can improve customer onboarding and experience altogether.

Types of Customer Due Diligence for banks

There are three types of customer due diligence known in the banking industry: Standard, simplified, and enhanced due diligence, respectively.

Standard due diligence:

This type of due diligence process for banks involves the initial stages of verifying and identifying customers through KYC practices. Here, customers are verified based on their personal identity information and government-issued ID documents. This process is performed by a reliable and independent third-party source. Standard due diligence in the banking industry purposely prioritizes those with moderate risk elements. It is carried out to uncover the intended reason for a business partnership, in case of large transactional volume, or suspected criminal activities.

Simplified due diligence:

Based on risk assessment approaches, this type of due diligence in the banking industry involves considerable low or no risk of financial crimes such as customers who are residing in low-risk areas can be identified simply through ID documents and PII.

Enhanced due diligence:

On the contrary, enhanced customer due diligence in banking is performed when the financial risks of money laundering, corruption, tax evasion, and terrorist financing are high. It involves high-risk customers residing in high-risk areas, and they can be asked for additional identification information. Enhanced due diligence process for banks will ensure that larger funds, assets, and transactions are duly vetted to minimize the risk of crimes and regulatory penalties, consequently. Here customers are screened against Politically-exposed person (PEP’s) lists, government-issued sanctions, and blacklists.

 Beneficial Ownership & AML Compliance

A financial institute or fund managing entity also needs to identify the ‘beneficial owner’ of respective assets and accounts in question. This kind of authentication is necessary because in many cases customers that show up at a front desk are actually acting on behalf of another person in a particular transaction. This kind of transactional behavior is showcased because the beneficial owner wants to conceal their identity. This protocol of customer due diligence in banking requires you to establish the ownership structure of a company, and partnership.

To have a wider understanding, a typical beneficial owner is a person who carries out the transactional activities on behalf of the original owner. So to ensure the customer’s identity and remove any doubts customer due diligence in banking is the step forward. This kind of cautionary behavior might not seem appropriate for businesses as they may consider the customer due diligence process as burdensome but this is your best chance to prevent yourself from becoming an unwanted participant in money laundering.


Shufti Pro is a perfect solution for banking organisations and financial institutions that are looking to adopt AML Compliance in addition to customer due diligence. We offer an artificial intelligence-based SaaS product that not only provides AML compliance but KYC services as well to make the entire process of customer onboarding and transaction monitoring hassle-free for businesses around the globe.

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10 factors shaping Identity verification industry in 2020

10 factors shaping the identity verification industry in 2020

The identity verification industry is expected to grow steadily during the forecast period, reaching USD 18.12 billion by 2027. But it is not all roses, there are some alarming factors behind the phenomenal growth of the industry. 

2019 was a rollercoaster ride for decades-old identity verification industry. The regulations changed, technology evolved and equally exploited by legal and criminal entities, global economies joined forces to fight money laundering and several other trends and incidents shaped the 2020 identity verification industry. 

The new decade is about to hatch and its high time industry stakeholders realize the significance of this shift in the industry. Because this shift is beyond the growth of revenues generated by companies, it is about the approach of global entities towards identities. The UN and World Bank ID4D initiatives set a goal for providing everyone on the planet with a legal identity by 2030. 

5+ factors that are shaping the new decade of digital identity verification 

1. More stringent regulations 

The regulatory authorities are becoming more stringent towards KYC and AML compliance among reporting entities. The global authorities are always in a bid to control the increasing financial crime, which is disastrous for the financial infrastructure. 

FATF increased the scope of reporting entities and recommended the member countries to oblige the legal professionals, art dealers, and virtual asset dealers to perform AML screening on their customers. The AML screening regulations implemented in these sectors are parallel to those implemented on financial institutions.

The EU launched the fifth AML directive which is set to be fully implemented from 10 January 2020. The identity verification threshold for the prepaid card industry is reduced from EUR 250 to EUR 150. Also, the scope of AML regulations is further enhanced. 

The U.S treasury expanded its counter-terrorism powers and now targets the international financial institutions around the world that aid the terrorist groups working in the U.S. Also it added three Korean groups, namely, Bluenoroff, Lazarus Group, and Andriel into sanctions lists.   

Read this blog –  KYC 2020-how 2019 changed the landscape of global regimes – to know more about regulatory shift in 2019. 

2. FATF’s digital ID systems guide 

The FATF is a global regulatory authority that gives AML and CFT (Counter Financing of Terrorism) recommendations to the member countries. FATF issued the first draft of the digital ID systems guide in 2019 and requested recommendations from stakeholders such as government bodies, consumers, identity verification companies, etc. 

This is a historical shift in the evolution of the identity verification industry. Once the complete guide is launched, companies offering competent services will gain more customer value and acclaim from the businesses.  

3. The silver lining of technological shift 

The previous decade was the era of remarkable technological shift at a global level. Huge advancements in artificial intelligence and biometrics were witnessed that changed the way technology was used. Every cloud has a silver lining, the shift in technology was equally utilized by legitimate entities and criminals. 

Deepfakes raised havoc in 2019. As per a study, 14, 678 deep fakes are available online. Deep fakes are the manipulated form of truth where criminals use artificial neural networks to edit the video or audio of a person. 

A UK-based firm was tricked to transfer  $243,000 through employing deep fake. Also, the political scandals like that of Nancy Pelosi raised havoc in the global political community. Both these were voice phishing deep fake scams where the audio was manipulated to remould the truth. 

4. Increase in frauds

49% of organizations globally said they’ve been a victim of fraud and economic crime in 2018 (PwC’s 2018 Global Economic Crime and Fraud Survey). The businesses are concerned about approaching financial losses due to an alarming increase in cybercrime and financial crime. This concern is often addressed by practising more rigorous due diligence measures on the stakeholders of the business entities. Hence it leads to more dependence on KYC and AML screening solutions. As digital identity screening solutions are a cost-effective and futuristic approach to fraud-detection, this leads to the global growth of the identity verification industry. 

5. Money Laundering and terrorist financing a two-edged sword

Money laundering and terrorist financing are global disasters in influencing economies. The united nations office for drug control found that the annually laundered amount globally is equal to 2 – 5% of global GDP. quite surprisingly this laundered amount is not the loss of the governments entirely, but the businesses exploited for a smooth transfer of money are also used for this purpose. Hence businesses are investing more in compliance and technical solutions for AML screening of their prospects. 

6. Increasing identity theft is the tip of an iceberg 

As per a report of Insurance Information Institute (III), 14.4 million identities were stolen in 2018 and 3.3 million victims were liable for some sort of financial penalty. But this is just the beginning of an array of consecutive crimes conducted with these stolen identities. These stolen identities are used for money laundering, credit card fraud, new account fraud(with banks), account takeover fraud, mortgage frauds, etc. 

The same report found that the majority of the stolen identity was used to defraud businesses and financial institutions. More than 40% of the stolen identities were used for the execution of credit card fraud.  

7. Technological advancements 

The world is already moving towards reinforcement learning. These changes are motivating businesses to invest in technical substitutes for hefty compliance procedures. More and more businesses are investing in next-generation identity verification solutions backed by AI and powered with biometric technology. A study by spice works found that 90% of businesses will be using biometric technology by the year 2020. 

Also, digital identities are becoming a household term. Goode intelligence trend report predicted that more than 3 billion digital identities will be distributed by 2025. 

8. Customers are becoming smarter 

One survey conducted by Visa found that 86% of consumers actually want to use biometrics to verify their identity, as opposed to traditional passwords. Digital identity verification solutions prove to be a competitive edge where customers are willing to onboard platforms with visible security measures. But too many security measures especially manual verifications annoy customers and they are most likely to abandon the cart.

9. Increasing pressure on customer rights 

California Consumer Privacy Act (CCPA) was launched in the U.S that gave an upper hand to the consumers in dealing with their data. The Californian consumers have the right to request access and deletion of their data. 

The CCPA is called GDPR lite due to strict data protection regulations. GDPR and CCPA are implemented on global businesses operating in their area of influence. So it has a global impact and digital identity screening solutions compliant with data protection regulations share the burden of reporting entities. 

10. Identity verification is winning over manual verification

The primary reason behind the growth of this industry is the next-generation solutions that it delivers for KYC and AML screening of customers. Highly accurate results are delivered in real-time and proof of verification is also provided. As the identity verification industry helps businesses experience global scope in the verification of their customers. So it proves to be a reliable friend, by all means, hence businesses choose digital identity screening solutions over traditional verification methods. 

Shufti Pro 2020

2019 was a very rewarding year for Shufti Pro. It untapped new ventures in enhancing the solutions and overall experience of the customers and end-users. Below are some significant achievements of Shufti Pro in 2019, that helped the company enter the new decade ready for the upcoming challenges and opportunities. 


Shufti Pro enhanced the identity verification solutions and decreased the average time of verification from 30-60 seconds to 15 t0 30 seconds average time for verification. 

A new office is opened in Dubai to expand the scope of the company. 

New services of KYB(Know Your Business) and AML for businesses are launched in 2019. 

Digital KYC to Trace and Tackle High-Risk Customers

Digital KYC to Trace and Tackle High-Risk Customers

Customers are the assets and building blocks of any business. Customers are responsible for taking businesses to the next level or destroying it to rubble. That is why it very crucial to know who you are dealing with. Know your customer is the procedure to identify and verify customers to check if they are real and not fraudsters or indulged in any illicit activity that can cause a threat to business. It is a process to check the background of customers and analyze the risk factors associated with them. 

The fundamental idea behind the introduction of KYC in organizations was to find a way that can protect the organizations from fraudsters and criminals and doesn’t involve penalizing the innocents at the same time. The KYC process is a standard procedure to verify the customers at the time of onboarding. However, with strict regulations coming into the light, KYC isn’t limited to the verification of the customers, instead, it is now to continuously analyze the customer behavior to look out for suspicious activities and illicit transactions. It is used for the following purposes:

  • To curb fraud schemes
  • To mitigate scam scandals
  • To put a halt on money laundering
  • To hinder illicit fraud transfer and
  • To identify high-risk customers by enhanced due diligence 

Need for KYC to Identify High-Risk Customers:

The KYC laws were introduced as the section of the Patriot Act passed in 2001 after the incident of 9/11 to deter terrorist activities and criminal funding. The section of this act concerned with the financial transactions inserted some new policies in addition to those of “The Bank of Secrecy Act of 1970.” These requirements regulated the banks and other financial institutions. As per the Patriot Act, the organizations dealing with finance are required to meet three main requirements in order to comply with KYC regulations:

  • Customer Identification Program (CIP)
  • Customer Due Diligence (CDD)
  • Enhanced Due Diligence (EDD)

High-Risk Customer Identification Program (CIP)

The customer identification program is a significant component of the KYC process in which the organizations are obliged to ask customers to provide their identification information. It is to verify the identity of the customer who wishes to carry out a financial transaction with a particular bank. The CIP requirement was made compulsory in 2003 for the financial institutions to develop and incorporate customer identification programs into their secrecy policies to meet anti-money laundering (AML) compliance. 

Every institution has its own CIP processes depending on the size and type of the institute. That’s why they may require different documents for verification. Generally, driving license and passports the most commonly required document by the banks. Regardless, some other documents may include: 

  • Utility bills
  • Financial references or statements 
  • Information from a consumer reporting agency or public database

No matter what document or information of the individuals and business is asked, it is to check their authenticity that they are not fake or fall in any prohibited lists so that fake customers and customers at high-risk can be filtered. 

High-Risk Customers Due Diligence

Customer due diligence covers multiple aspects of customer verification and identification. For secure onboarding of clients, it is essential to identify the future risks that can arise due to some customers – the reason why customer due diligence is conducted. While performing due diligence, the significant goal is to analyze customer behavior and predict the type of transaction pattern that the customer is most likely to follow. In an evolving regulatory climate, mobile identity verification can be of great help. It helps organizations in identifying suspicious behavior and assigning a risk rating to customers to identify the customers that can be threatening for organizations and how often their accounts will be monitored. 

The regulatory agencies have set no particular standards or methodologies for conducting customer due diligence leaving the institutions with an open choice to follow their own tools and devices. Many organizations demand a lot of information during the process including banking references, previous financial statements, salary slips, occupation, source of funds, etc. The purpose of this information is to analyze the background and behavior of the customer to predict future risks that may be linked to the customer. 

All this hassle because FinCEN has strictly imposed this requirement on the financial institutes to immediately report any threatening or suspicious activity. And you can’t do it efficiently unless you know your customer behavior and history.

now more about Digital KYC services

Enhanced Due Diligence (EDD) for High-Risk Customers:

Enhanced due diligence (EDD) is an advanced and more comprehensive set of KYC procedures for high-risk customers, exhibiting irregular transaction behavior or ambiguous sources of origin. The customers classified under the high-risk category after the Customer Due Diligence (CDD) process are more likely prone to money laundering and illegal funding of terrorists and criminals. They need to be monitored continuously. Considering the trend of such illicit transactions, the USA Patriot Act strictly dictates the institutions that they

 “shall establish appropriate, specific, and, where necessary, enhanced due diligence policies, procedures, and controls that are reasonably designed to detect and report instances of money laundering through those accounts.”

The EDD process includes verifying ultimate beneficial ownership information (UBO) and identifying politically exposed persons (PEPs). Monitoring the transactions is also one of the fundamentals of the EDD process.

High-risk Customers-Venomous for the Business:

High-risk customers are identified from the customer provided by using digital identity verification solutions. Such customers are monitored perpetually for the potential suspicious activities in their accounts so that no forgery can take place like money laundering, account takeover, identity theft, etc. Such customers can be a poisonous threat to business until they exist in the system. Various AI-powered Saas products offer inputs that are useful for the monitoring systems of the business to filter such AML high-risk customers that pose a threat of money laundering. Such a risk management framework will business in assessing customer risk. 

Digital KYC Checks- From Weeks to Seconds:

It is a documented fact that customers are the assets of any organization. Digital KYC is what the institutions need in this era of technology. Based on the principles of automation, the eKYC process can simultaneously execute multiple steps. It reduces the keystroke time, cost and human effort. The process that could take hours and days for an individual can be cut down to seconds with the help of AI-powered solutions and tools. With the use of intelligent KYC verification, the businesses can onboard a more secure clientele and that too with real-time verification, coping up with the regulatory complexities at the same time.

With the world moving into the digital sphere, customer convenience is even more important for any business. The manual KYC process is quite a time consuming and costly process. Clients get exhausted as it takes weeks or even months to onboard a customer. This cumbersome procedure even ends up losing customers as they move to other platforms during this time taking procedure. It is evident now that digital KYC doesn’t only help to identify any customer but helps to filter out customers that have some traits putting them as high-risk customers so that businesses are vigilant while dealing with them. Also, due to the digital revolution, the concept of global onboarding is becoming common which requires more fast and convenient verification and onboarding process. 

Perks of Using Digital KYC Solution:

To end up negative customer experience digital identity verification solution has achieved a milestone. Following are some of the benefits that come up with using the digital identity verification solutions for KYC:

  • Demit Frauds and Scams

Using digital KYC can decrease the risk of frauds like identity theft, credit card fraud, and onboarding high-risk clients. 

  • Increase Security

It’s more important than ever to verify the identities of customers due to an increased risk of terrorist funding and money laundering and other cybercrimes. 

  • Ensure Accuracy

Digital KYC solutions provide a seamless experience where there are lesser chances of errors and omissions. 

  • Provide Better Customer Experience

Digital KYC provides a better customer experience as it takes no time for the whole authentication process. 

In a nutshell, digital KYC clubbed with artificial intelligence is crucial to identify and tackle with high-risk customers that can bring along various dangers for businesses. Business can end up paying hefty fines due to such customers or owners end up losing their businesses. Digital KYC simplifies identity verification for an online business that plays a vital role in this area. In an evolving regulatory climate, mobile identity verification can be of great help. In the coming years, it will continue to morph with surprising speed.

Know more about Digital KYC

AML KYC how changed the landscape of global regimes

AML/KYC 2020 – how 2019 changed the landscape of global regimes?

Copy pasting your 2019 AML/KYC compliance strategy to 2020 plan will not do the job. Businesses need to change their AML/KYC compliance strategy to comply with the latest regulations. 

Anti Money Laundering (AML) and Know Your Customer (KYC) regimes evolved during 2019 on a global scale. Regulatory authorities like FATF, FinCEN, FINTRAC, and the EU government took some rigid steps to make KYC and AML compliance a global phenomenon

Regulatory and supervisory authorities are bringing all the industries under the radar to make AML/KYC compliance inevitable for reporting entities. The Danske Bank and Swedbank scandal made the global financial sector learn the lesson and to take compliance seriously.  Also, the heavy fines charged from non-complaint online businesses like gaming, cryptocurrencies, etc. initiated the trend of AML/KYC compliance among these industries. 

Below is a brief review of some major changes that occurred in KYC and AML regimes around the globe in 2019. 

Fifth AML Directive (AMLD 5) of the EU to be implemented in 2020

EU introduced the fifth AML directive in 2019 which is all set to change the AML compliance in the EU. The businesses are required to comply with this law by January 2020. 

AMLD 5 introduced the amendments for financial institutions, prepaid cards, credit institutions, real estate, legal sector, and virtual currencies, etc. The new directive requires the reporting entities to practice enhanced due diligence. 

The identity verification threshold on remote transactions of prepaid cards was reduced to EUR 50. Also, AMLD5 called for a reduction in the threshold of anonymous prepaid cards – from €250 to €150. Now the prepaid card providers will have to practice customer due diligence on every customer making a transaction or depositing more than €150 in his prepaid card account. This will help the authorities control the anonymous use of prepaid cards for illegal fund transfers. 

Virtual currencies need to apply customer due diligence just like traditional financial institutions. So thorough KYC and AML screening of customers is inevitable for businesses. 

FATF digital ID Systems Guidance


FATF took the Regtech initiative back in 2017 by showing a positive attitude towards technological advancements in the financial industry and regulatory framework. 

FAFT issued a guidance paper for digital ID systems. The guidance paper is open to suggestions from the stakeholders. The stakeholders of this guidance are the regulatory and supervisory authorities, businesses and government agencies. 

The guidance provides a brief insight into the process, components and technical standards of digital ID systems. It referred to NIFT Digital ID Guidelines and EU’s EIDAS Regulations

As FATF is a global authority and has several member countries from every corner of the world it is projected to make a huge change in global AML/KYC compliance practices of businesses. 

FATF recommendations for the legal sector, virtual assets


In June 2019, FATF gave revised recommendations for the legal sector and virtual assets. Now, these sectors in the member countries of FATF are required to practice thorough AML and KYC screening on their customers. Legal professionals are guided to verify the identity of the Ultimate Beneficiary Owners (UBOs) of the businesses they work with. 

Also, businesses dealing with virtual assets (cryptocurrencies,etc.) are required to perform AML/KYC screening on their customers just like the financial institutions. 

FATF also drafted the recommendations for art dealers, weapon dealers, and precious metal dealers to exercise regulatory compliance. These regulations are drafted to bridge any loopholes in the regulatory framework. 

Global authorities becoming more stringent towards real estate


Global regulatory authorities are becoming stringent towards real-estate. This sector is commonly used for money laundering. Canada, Singapore, UK, and Germany are some countries that imposed owner verification regulations on real-estate in the past years. In 2018, (AML) legislation was introduced according to which foreign owners were supposed to identify themselves. The purpose of this bill was to find out who is the owner of a particular real estate property. By 2021, the registry will be made public. 



The AMLD 6 was also proposed in 2019. Sixth Anti-Money Laundering Directive (AMLD6) highlights a stringent framework to combat money laundering and terrorist financing. It extends the scope of criminal liabilities and entities with an updated list of predicate offenses. AMLD6 came up with tougher penalties and widens the criminal liability to legal persons. 

AUSTRAC all set to regulate MSBs


AUSTRAC launched a campaign against the unregistered money services businesses (MSBs). It requires the MSBs to register with AUSTRAC and to follow the AML/KYC regulations carved for them. Money transfer businesses that will not register with AUSTRAC will be liable for a fine of $420,000, seven years jail or both. 

These new regulations are implemented to mitigate money laundering and terrorist financing in the financial infrastructure. The MSBs are exploited by financial criminals due to a lack of customer due diligence practices in this sector.

Other than AUSTRAC, FATF and FINTRAC also adopted a risk-based approach towards MSBs. 

The U.S treasury international financial institutions initiative


The U.S expanded its counter-terrorism powers and now targets the international financial institutions around the world that aid the terrorist groups working in the U.S. Also it added three Korean groups, namely, Bluenoroff, Lazarus Group, and Andriel into sanctions lists. 

The UK expanding the scope of MLA-2017


The UK also amended its KYC and AML regulations and expanded the scope to an international level. The Money laundering Act (MLA-2017) of the UK was amended. The UK-based businesses will practice the MLA rules in their international affiliates operating in non-EEA states. 

To wrap up, 2019 was a phenomenal year for KYC/AML regulations where the authorities not only worked on enhancing the AML regulations but also on improving the compliance habit of liable entities.  

The fraud and planned crime cases in the past few years made the regulatory authorities to draft more focused and detailed KYC/AML regulations to mitigate money laundering, terrorist financing, and crimes related to identity theft. One fake or stolen identity if used wrongfully could initiate a chain of crime that could affect a lot of stakeholders. 

The changes that happened in 2019, made regulatory compliance inevitable for businesses. Many future-oriented businesses are using KYC/AML screening solutions to practice global compliance. Because there are just two ways out of this situation, either it is compliance that leads to fraud-free growth or non-compliance that leads to hefty non-compliance penalties and fraud losses. 

Why CDD is significant for both Know Your Customer and Know your Business verification?

Customer Due Diligence: From KYC to KYB

Why CDD is significant for both Know Your Customer and Know your Business verification?

Banking is a profitable sector but is risky at the same time. Frauds, as well as compliance risks, are often complicated and intricate. The banks and financial institutes are spending a high amount of capital on KYC compliance, which surpassed $100 billion in the year 2019. Even with this much investment, global banks have been fined $321 billion since the global crisis in 2008. Further complicating these risks is the fact that financial crimes such as money laundering, terrorist financing, and cyber frauds are increasing.

On the other hand, regulatory authorities are striving hard to enforce measures that could lead to the eradication of financial crimes. One of the first regulations that were enacted amidst the Vietnam war back in the 1970s was BSA. US regulatory authorities issued the Bank Secrecy Act of 1970 (BSA).

The purpose of this law was to counter money laundering activities emerging from illicit drug trafficking. Under this provision, banks are obliged to report any customer activity that seems suspicious such as transaction above $10,000 to the Federal Financial Crimes Enforcement Network (FinCEN).

The regulations aimed to make it difficult for the drug cartels, terrorists, and other lucrative criminal enterprises to launder money by making their transactions more visible to law enforcement agencies.

Introduction of Customer Due Diligence as Know Your Customer (KYC) regulations


The Banking Act of 1970, laid the foundation for the Anti Money laundering (AML) regulations later in US patriot Act, 2001, after the tragic incident of 9/11. Customer due diligence (CDD) was declared necessary for the financial sector. The term coined for performing CDD is Know Your Customer or KYC.

The KYC regulations were fortified to restrain the flow of money to the terrorists. It requires financial institutes to verify the customer to ensure that they are, who they claim to be. These regulations led to the adoption of various approaches to comply with CDD and KYC laws. Since the US regulatory changes affect the landscapes of the global financial sectors, these regulatory changes were accepted by the banking sector worldwide.

Financial Sectors adopted several ID verification controls to respond to these regulations. These ID verification controls include:

  • Maintaining a thorough Customer Identification Program (CIP).
  • Verifying customers against the list released by Law enforcement agencies.
  • Predicting, customer’s behavior and criminal risks associated with a particular entity, based on the statistical data.
  • Ongoing screening of the transactional activities of suspected customers.

It continues to be the main line of defense for the financial sector against financial crimes, with minor amendments. For a simple person, this law appears comprehensive. However, in June 2016, a loophole was identified in KYC compliance regulations. 

The banks weren’t required to verify the identity of stakeholders and beneficiaries of the businesses they provide services. It was after Panama Papers Scandal the world realized that apparently, legitimate businesses could hide the identities of bad actors and perform illegal activities on their behalf. The regulatory authorities identified the risk and issued a fix as Know Your Business (KYB).

Tying up Loose Ends with KYC Verification


This fix made by regulatory authorities in the KYC checks includes the Customer Due Diligence for the financial institutes. Under the new provision, Financial institutes are now required to perform stringent verification checks. KYB regulations are aimed to identify the shell companies that are involved in money laundering and other illicit financial crimes. 

Firms are required to verify the person who owns the business legally as well as, the identity of stakeholders owning a minimum of 25% share in the business. European Commission also introduced the same legislation in its 4th AML Directive (4AMLD). This process of business verification was improved, with new regulatory changes in AMLD5 and AMLD6, which are aimed to make due diligence transparent.

However, KYB compliance is not easy to achieve as it seems. The major problem in KYB verification is the identification of shareholders in the businesses. Most of the time, no record of these entities is available and to make things worse, the disclosure requirements in each jurisdiction varies. This sometimes makes it impossible to identify the stakeholders in the business. It is a recipe for disaster, for the firms who want to stay in compliance.

Turning towards Technology for Solution 


Emerging from the ashes of the global financial crisis in 2008, the new regulatory technologies are helping to ease the burden of compliance by reducing the operational costs as well as mitigating the risks for financial crimes. At the crux of these technologies, is the use of new technologies such as Identity verification and KYC identification, to help financial institutes to monitor, comply and regulate. The RegTech solutions are already assisting financial institutes to meet KYC and AML regulations.

Businesses need to stay one step ahead of the fraudsters. With a comprehensive approach to global risk mitigation, businesses could easily prevent fraudulent activities and stay in compliance with regulatory authorities. 

RegTech industry is rendering efficient AI-based solutions for Business verification solutions that can eliminate the inefficiencies and risks involved in onboarding new customers. For instance, automation of official document checking process and verification against the government issued registries. 

The future of RegTech is expected to see great adoption in the financial sector in the future. Owing to the changes in regulatory compliance, performing KYC and KYB verification parallelly will enhance the customer due diligence process and businesses to stay compliant.

Global Economies are joining forces with FATF against money laundering

Global Economies are joining forces with FATF against money laundering

Financial Action Task Force (FATF) has been very keen on eliminating financial crime (money laundering, terrorist financing) at a global level. The regulatory authority recommended some major changes in  AML (Anti Money Laundering) practices and screened the AML practices of some of its members (direct or indirect) and also, added new countries in its member’s list. 

FATF is one of the most influential global financial regulators. It has 39 complete members and several members under its affiliates (APG, CFATF, EAG, etc.) around the globe working on a thorough implementation of AML regulations. FATF is always keen on eliminating money laundering from all the countries and territories. Numerous industries including financial and non-financial sectors are added to the scope of reporting entities of FATF recommendations. 

In a wake to ensure global compliance, FATF is always in search of loopholes in AML and CFT (Counter Financial terrorism)  regulations and compliance practices of the member countries. Regular screening of AML practices of its member countries is a part of its operations. 

In 2019 as well, FATF took some vital steps to expanded the scope of its regulations to a global level and to cover the gaps between global AML regulations

Saudi Arabia Became the First Arab Member of FATF


FATF expands the scope of its regulations to a global level by adding new members. Becoming a member of FATF requires the country to fully comply with FATF recommendations making it almost impossible for criminals to exploit it. 

Saudi Arabia is setting standards for the Arab and Middle eastern countries by becoming a member of FATF. the country was practicing the global AML and CFT regulations for the last four years. Also, in March 2019, it was about to be blacklisted by FATF, but missed it closely and now becomes full member of FATF.  

Financial institutions and businesses offering any types of financial services will be liable to comply with global AML regulations. This means the latest AML recommendations of FATF regarding cryptocurrencies and the legal sector will also be imposed on the reporting entities in Saudi Arabia. This initiative of Saudi Arabia will bring more business into the country as it is identified as a safe country by fully complying with the 40 recommendations of FATF. Meanwhile, the businesses in the country will be under the strict scrutiny of the regulatory authorities. 

It is high time that businesses in Saudi Arabia should identify the crucial need to practice complete AML compliance.

Pakistan in the Greylist 


FATF keeps an eye on its member countries by screening their efforts to eliminate money laundering and terrorist financing. Pakistan is a member of the Asia Pacific Group on Money Laundering (APG) and was under the scrutiny of FATF since 2018. The reason behind this scrutiny is the terrorist attacks in India. It was claimed by the Indian authorities that the terrorist activity was executed by a terrorist group in Pakistan. Also, the Panama Papers placed a question mark on the AML and CFT practices of Pakistan. The regulatory authorities in Pakistan are required to take proactive measures recommended by FATF to be removed from the grey list. 

In 2019, FATF made an analysis of the AML practices of regulatory institutions in Pakistan.  The decision has to come regarding, whether Pakistan will be added to the blacklist or not. 

It shows that FATF does not ignore any kind of non-compliance by its member states. In order to maintain the good image of their country, the member states are always in a wake to adopt stringent practices to enforce AML compliance in the business sector (financial and non-financial). Because becoming a member of FATF of just the first step, the countries have to go through regular screening of FATF and need to maintain a crime-free financial infrastructure in the country. 

So, the businesses in full member countries and indirect-member countries are in dire need of practicing complete AML compliance. As non-compliance will lead to dangerous consequences like huge fines and loss of credit rating, loss of credibility, etc. 

Changes in FATF Regulations


FATF gives recommendations whenever it finds a loophole in global AML and CFT regulations. In 2019, the authority gave some major recommendations to its member countries. 

FATF recommended AML compliance for the cryptocurrency and legal sector in 2019. The legal sector is required to screen the Ultimate Beneficiary Owners (UBOs) of the entities they represent. 

Also, the cryptocurrency businesses are required to practice AML and KYC compliance just like the financial sector. 

The reason behind these new recommendations is the increase in fraud in these sectors. Cryptocurrency is widely exploited by financial criminals at a global level. According to a report, $1.1 billion of cryptocurrency was stolen in 2018. On the other hand, the legal sector is also exploited by money launderers to incorporate their black money into the business proceeds of shell companies. That is why the legal professionals are required to verify the identity of UBOs of business entities they are serving.

FATF also recommends the art dealers and precious metal dealers to practice KYC screening on their customers and to report transactions above the predetermined threshold. 

Why Do Businesses need to Practice AML Compliance?



The businesses in the financial and non-financial sectors are covered in the scope of AML recommendations of FATF. Operating in countries that are full or indirect members of FATF, the businesses are obliged to practice thorough compliance with global AML regulations. Harmful consequences follow the non-compliance practices of businesses. 

Non-compliance could result in fines, loss of credibility, credit rating and market value, and in some cases complete shutdown of the non-compliant entity. For instance, take the case of the Danske Bank’s Estonia branch which was closed due to a huge money-laundering scandal. Also, the bank faced several lawsuits and huge penalty. 

The recent efforts of FATF show that the entity will leave no rock unturned to eliminate money laundering at a global level. So, it means that businesses have no other option but to take proactive measures against financial crime. Running real-time KYC and AML screening on the customers before onboarding them eliminates the risk at the very beginning. It enhances the credibility and credit rating of a company along with proactive fraud prevention. Such steps will help businesses in gaining a competitive edge. Hence, such proactive measures create a win-win situation for businesses.

Identity Verification Market

Identity Verification Market ‘Hitting High Record’

The advent of technology has pushed businesses to digitize their operations for better customer experience. Moving into the fourth industrial revolution, the new chapter for human development has started incorporating advanced technologies. Merging the physical, digital and biological world is giving rise to novel business opportunities. It is an understood fact, opportunities and challenges always go side by side.

As we move into the digital world, security and privacy concerns are on the rise and expected to grow more in the upcoming years. The organizations that will embrace the technological evolutions for customer security and meeting regulatory compliances are the ones that going to thrive fourth industrial revolution. It leads businesses to adopt effective, fast and convenient identity verification solutions. 

Identity Verification – Going Through The Roof

The organizations are leveraging AI technology to combat rising digital fraud and improve customer experience. The businesses are reaching out for third-party security and verification solutions; ultimately setting higher demands for the industry. As per the market research report, the Identity verification market is expected to grow $12.8 billion by 2024 at the Compound Annual Growth Rate (CAGR) of 16.0% during the forecast period.

The upcoming industrial revolution is going to be customer-centric and it is believed that customer experience is going to shape the future of organizations. Moving into the digital sphere has created understanding among the business about the need for secure digital identities. At the same time, convenience and simplicity are equally important in driving customer experience. The combination of both of these requirements forms a concept of secure growth that is important for the success of any business or organization. Online Identity verification is the best way to achieve both at a time — security and optimized processes.

Identity Proofing and Customer Experience

Satisfied customers are true assets for the business. Esteban Kolsky claims, 13% of the unhappy customers tend to tell 15 or more people about their bad experience contrary to 72% of happy customers sharing positive reviews to at least 6 people about the business. Securing customer identities and information is a positive step towards retaining the customers. Verifying the customers doesn’t only secure the business from fraudsters and risky individuals but also provide fruitful customer experience.

Not to forget that verifying and authenticating identity is a necessary step in know your customer (KYC) process. With the businesses moving towards digitization, manual KYC is no longer effective since it is quite a time-taking process and requires more resources. The customers don’t tend to wait, and eventually move to another organization. Also, the physical distance between customers and has drastically reduced and will continue to reduce in the future as well. It means that customers no longer need to visit the organization manually to carry their activities, for example, opening accounts, transferring payments, etc. This is the reason the businesses are going to need AI-based verification solutions that can onboard secure clientele in real-time and reduce customer drop-off rates. 

The rise of Synthetic Identities and Document Verification:

With the fake identities being recognized by the organizations, the criminals have shifted their focus on the creation of synthetic identities. Synthetic identities due to its hybrid nature (a combination of real information with fake ones) raise a major concern for organizations. They need to find ways to hinder such identities and establish trust with the real customers that they have no previous relationship with.

The combination of accurate facial recognition, document verification and other variety of verifiable identity sources – powered by artificial intelligence and machine learning – aim to support digital onboarding and meet know your customer (KYC), Anti-Money Laundering (AML) and Customer Due Diligence (CDD) regulations. Recently, according to research from Google intelligence the digital identity and document verification services will be a $15 billion industry by 2024, growing at 20% percent from 2019. 

The pressure of Global Regulatory Agencies: 

Online identity and document checks cover three basic questions to organize the whole onboarding process in a unified workflow:

  1. Is the person is real?  With remote presence.
  2. It the document original with no tampered information?
  3. It the person is safe to do business with? Having no criminal history and doesn’t fall under any sanction list.

These questions are essential to meet global compliance. Organizations have a clear idea that violating regulations won’t only make them liable to hefty fines, but it also has a great impact on reputation in the market. The data report published by Fenergo, detailing global fines activity of regional and in-country regulators from 2008 to 2018 states the monstrous fine has been imposed on the organizations. The reason was non-compliance with AML, KYC and sanction regulations in the past decade. 

Taking into account such trends of organizations, AI-powered identity verification services seem to be the perfect solution. Some businesses have already adopted these variations and other will be following them soon.

Read More: Warning: You’re Losing Money by not Using Biometric Identification

Digital Kyc

6 Digital Solutions for Banks to Help with KYC

Digital KYC: For banks, streamlining the customer onboarding is essential. The manual way of entering client information into the system is redundant and time-consuming. In this age of ‘do it now’, banks need a tech-based approach for onboarding customers.

Also, technology alone can’t solve these problems. Its implementation needs to be strategic, logical and customer oriented. For example, banks need to comply with regulations such as know your customer (KYC), and the customers want swift and easy interaction with the banking system. AI-based digital solutions can help both the banks and the customers.

Read How Digital KYC Solutions Work in 60 Seconds

Problems Banks Currently Face in Onboarding

According to a KPMG report, a tier 1 bank could easily be spending about $100 million annually on onboarding clients. Despite spending this much, this manual process is error-prone, slow, risky (due to lack of regulatory compliance) and does not enhance the client experience. 

The majority of the problems associated with client onboarding are related to the outmoded manual onboarding. For example;

  1. Manual form filling and questioning are time-consuming.
  2. There is an ever-increasing demand for transparency by the regulators. Keeping up with these demands is arduous.
  3. The process is complicated and slow from the customer’s perspective.

The solution to such problems should consider three main factors; the business side, regulatory compliance, and modern technology. Coordination among these three pillars will exhibit the benefits of digital KYC. 

Here are 6 Digital Solutions to help with KYC

  • Face Verification

Simply put, the user takes a selfie with their smartphone or with a webcam. The software (digital KYC solution provider) ascertains the physical presence of the individual. AI-based methods can differentiate between a picture and a live face using 3D depth perception and color texture. This prevents spoofing attacks. Contemporary solution providers use micro expressions for verification as well.

  • Document Verification

With the camera of a smartphone or computer, the software scans documents for verification. Normally this includes verifying government-issued ID cards, passports, or driver’s license. Smart solutions determine the authenticity of documents and ensure that they are not tampered with. They also check for the format to assure that the document is original. For example, besides checking the apparent format of the passport it checks the machine readable zone (MRZ), which is usually located at the bottom of the identity page.

  •  Address Verification  

Verifying the physical address is a crucial part of the customer’s identity. It acts as a solid deterrence against identity theft. By ‘reading’ the government-issued documents such as ID cards, digital KYC solutions authenticate that the document is genuine, and the address mentioned on it is not forged or tampered with. The best services offer hybrid solutions; first, the document is verified by the machine, then, a trained person ensures that the verification is error free.

  • Two Factor Authentication

The combination of phone and internet is used in the two-factor authentication. The user simply enters their phone number into the app or software, then, a code is sent to their phone. The user is then requested to enter that code into the web interface to authenticate.

  • Anti Money Laundering (AML) Screening 

Banks not only have to ‘know their customers’ but they also have to perform due diligence before they doing any form of business with them. They need to screen them to ensure that they are not listed on the anti-money laundering watch list. This service is also available to banks in a digital form. The best solutions out there update their database every few minutes, so that when they screen, it cross-checks with the most recent data. 

  • Knowing Customers through Customized Documents

Smart digital solutions are capable of reading handwritten notes and custom documents. This is achieved through optical character recognition, which is powered by AI and machine learning. Digital KYC verification is an impetus for comprehensive due diligence. 

Despite the various benefits, tech-based solutions alone are not enough. The integration needs to make business sense for banks. KYC – digital or manual – needs to be in compliance with the regulations. The majority of banks spend huge sums of money on compliance but still, come short on many fronts. Third party services are a cost-effective and feasible option; compliance is met and customers get fast and easy communication with the banks.

Find more relevant resources:

6 Digital Solutions for Banks to Help with KYC

Shfuti Pro Partners With Swiss ALPS

Swiss Alps Mining partners with Shufti Pro for KYC & AML Compliance

(Bath, United Kingdom – July 16th, 2018) Swiss Alps Mining has partnered with Shufti Pro to avail KYC & AML Compliance services for ICO of its crypto token. A switzerland based blockchain startup, Swiss Alps Mining is a cryptocurrency mining plantation that optimizes electricity consumption in the coin mining process such as Bitcoin, Ethereum, Zcash and Dash.

In order to raise funds for future expansion and product development, Swiss Alps Mining decided to launch a cryptocurrency by the name of Sam. The funds raised in the ICO will be used to finance the development and expansion of the mining facilities and to acquire holdings in hydropower plants. The SAM token is an ERC20 token. It can be used as means of payment within the SAE mining and service universe and will be tradable outside the SAM platform on all relevant exchanges.

In a bid to verify the identity of its investors and to mitigate any financial crime risk posed against its ICO, SAM turned towards Shufti Pro. The swiss startup was impressed by end-to-end ID verification services provided by Shufti Pro. KYC and AML Compliance from Shufti Pro fulfilled all the professional demands of SAM, something that was crucial for the swiss startup. CEO of Shufti Pro, Mr. Victor Fredung had this to say about the joint collaboration between the 2 companies

“Shufti Pro put genuine efforts in understanding the individual needs and demands of Swiss Alps Mining. It was crucial for us to deliver top notch KYC and AML compliance services to make their future venture a success story.”

Shufti Pro’s industry best processing time of 30-60 seconds to perform identity verification ensured a robust customer onboarding process for Swiss Alps Mining. AML compliance from Shufti Pro made sure that the investors showing interest in ICO of Sam were not red flagged by national, regional or international watchdogs. This was made possible with the help of Shufti Pro’s large databank that contains information from 1000 watchlists, sanctions list and Politically Exposed Persons. In addition to that, Shufti Pro performs background checks from 3000 databases maintained by financial law enforcement agencies from around the globe.

SAM was targeting to achieve a global success for its ICO and this also became a vital aspect in selection of Shufti Pro as the verification partner of SAM. Shufti Pro has a global language support which means that documents printed in every language of the world can be verified by Shufti Pro.

Both SAM and Shufti Pro look forward to a mutually beneficial relationship, creating a more vibrant atmosphere for blockchain technologies.

About Shufti Pro

Shufti Pro is an emerging name in verification services and KYC/AML. It was founded on 31st October, 2016 in Bath, UK. The goal of the company is to enable its clients with seamless customer experience, fraud prevention and undeterred revenue generation. The company offers state of the art SaaS, which engages Artificial Intelligence and Human Intelligence. Businesses can now conduct easy digital verification processes with lesser friction and more advanced technology. Currently offering its services for all countries of the world along with Universal Language Support, the company is located in United Kingdom with its global office in Sweden.

Please visit Shufti Pro here.

Shufti Pro Limited

Unit C401, Westfield Shopping Centre,

Ariel Way, London, W12 7FD

About Swiss Alps Mining AG

Swiss Alps Energy AG (SAE) is Swiss Alps Mining & Energy’s operating business. SAE is a Swiss startup company in the area of crypto mining and energy, located in Huenenberg, Canton of Zug. SAE plans to start operating crypto mining farms in the Swiss alps in 2018 – a pioneering project. These farms are situated in buildings no longer used by local farmers. SAE will at the same time operate small hydropower plants to produce the electricity needed for crypto mining.

Digital Verification Services

Employees’ Digital Identity Verification for Remote Hiring

With the age of technological advancement, the world is becoming a heavily connected global village, requiring digital identity verification in all aspects. This article focuses on distance working opportunities. Increasingly, people are looking for remote jobs and prefer working from the comfort of their homes rather than travelling to an office for a desk job. This is, of course, beneficial for the workers as they are able to take up multiple jobs and earn double the money than if they exhaust that energy in travelling to work places. However, as human interaction reduces, the crime rates in the hiring and payment part increase manifold. Companies hire individuals without directly meeting them beforehand. They are usually interviewed via Skype or a telephone call, and hired merely based on what they present to the employer on paper and during the call. It all could be fake, or they might not actually be as qualified as they claim to be, resulting in lower quality of work and increased losses in productivity and finances.

Employees’ Documents Verification

During the employees’ onboarding process, they are required to present their official documentation to the company so their academic and professional qualifications and achievements may be evaluated against the skills required for a particular job. However, to get  hired, candidates may present forged documentation, depicting fake certifications, when in reality, they may not even be half as qualified. To curb these issues, digital identity verification becomes essential, so the identity and the documents presented by the candidates may be verified using authentic techniques. Furthermore, if the potential employee is a scammer, their identity documents like government issued ID card, passport, driving license or payment cards, may be counterfeit, or worse, stolen. They would never present any true information that can be traced back to them in case of an investigation. For combatting these types of frauds, it is essential to catch the suspects before they can posit any harm to the hiring company or individual.


Financial Security Risks

Remote jobs come with a high risk of frauds for the hiring companies. Recruiters may never be sure that a remote candidate will not incur money losses to them, by taking their money and not delivering the completed or high quality work in the promised timeframe. Worse, they may ask for an advance payout and not deliver any work at all. They may remove their work profiles and cease to exist as that entity. In cases like these, a single person has multiple profiles used to scam people at large. Payments are usually via a platform like bank transfer or electronic payment cards. To keep a record of who is making the payment to whom, it is imperative that digital identity verification is carried out before the confirmation of money transfer. This way, the company can have a solid proof in the form of employee’s personal identification information and images of the documents they presented at the time of hiring. To fully ensure that the person presenting the documents was the same as the one who entered their information, a real-time video verification method can be employed, where the entire process is recorded and available to use in case of a mishap as mentioned previously. Digital KYC and AML screening will not only ensure secure payment processing, but will also satisfy the employers that the person being hired is not associated with any kind of criminal or adverse activities.

Reliable DIgital Identity Verification Services

Shufti Pro offers reliable digital identity verification services to its customers based on Artificial Intelligence. Liveness detection can check for Facial Verification and pattern recognition ensures that identity documents provided by a potential remote employee are 100% genuine. With coverage in 200+ countries and territories support for more than 150 languages, companies can use Shufti Pro to hire new employees and remote workers in any part of the world. Shufti Pro cannot only determine the true identity of a remote job candidate with the help of an ID card but it can also authenticate digital identity with the help of driving licenses and passports as well. For address verification, Shufti Identity verification services even extend support to utility bills and bank statements that are no older than 3 months. Digital ID verification from Shufti Pro is an ideal choice for companies that want to bring onboard new workforce without facing any potential risk. Online ID verification processed in real-time ensures that no time is lost in verifying the true identity of a soon-to-be-hired employee.

Credentials and personal information required for KYC verification can now even be extracted directly by Shufti Pro with the help of OCR technology. All a remote hiree has to do is display their personal identity document to a webcam or phone camera. As a smartly designed identity verification software, Shufti Pro will automatically identify text printed on the identity document and fill it in the desired text fields of a personal information form.

Consent Verification Service Available

Most countries and states require businesses to collect consent of would-be-employees or job candidates before verifying their credentials through any technological means. Shufti Pro has sorted out this issue as well with the help of its Biometric Consent Verification solution. Unlike most identity verification providers, Shufti Pro is just not concerned about verifying identities of end-users, but we also want to safeguard our customers from any unlikely or unwanted regulatory complications.

Shufti Pro customers can ask their remote employees to provide a written consent either in the form of an official document or handwritten note. The final choice of consent formats depends on the official regulatory guidelines regarding the consent of a user, whose identity is to be verified. Shufti Pro can verify the collected consent on behalf of its customers and like all other identity verification solutions from Shufti Pro, verification results will be displayed in real-time.

Identity verification API of Shufti Pro makes the integration process entirely hassle-free for Shufti Pro customers. Global coverage of Shufti Pro is also highly beneficial for Shufti Pro customers, which means that they can hire new employees in any part of the world without having to worry about any integration related glitches. All the collected information submitted for verification will be visible to its customers in Shufti Pro Back Office and is stored according to specific data safety guidelines of PCI, GDPR, and many other major data protection practices.


To bring the whole idea together, it suffices to say that in this day and age, with our lives revolving around technology, digital identity verification of employees before hiring is an essential part of the recruitment process. Protecting the interests of the company, securing assets and preventing frauds, this can be taken care of by implementing appropriate preventive measures. Secure hiring of employees is ensured if the company truly knows who they are hiring. This will build trust among the customers and the company, enhance productivity, improve business and prevent financial and labor losses that an organization may otherwise have to face.

Reduced time spent on and feasible costs of digitally verifying the potential candidates for a vacant job post will enhance the onboarding speed, and return considerable savings to the corporation as well. To achieve higher profits, employee and customer satisfaction rate, it is essential to perform digital identity verification services offered by Shufti Pro on your remote employees during the recruitment process.

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cryptocurrency kyc aml shufti pro

Cryptocurrency Exchanges and negative KYC Compliance

KYC & AML Compliances are not being upheld by almost 68% of the cryptocurrency exchanges around the globe. Only 32% have been found to be fully following the compliance rules.

This means that one way or another, once the revised AML directives are in place in the year 2019, these companies will have to completely reform the way they operate, in accordance with the EU Regulations.

An analytics study conducted by the P.A.ID Strategies disclosed the non-compliance of more than half of the cryptocurrency exchanges based in the U.S. and EU region.

Reasons of Non-Compliance

With a sample size of a quarter of a hundred, P.A.ID Strategies proved that many of the crypto exchanges fail to verify the identity of their users. Majority of the Cryptocurrency exchanges take place without requesting any substantial proof of identity or official documentation to screen the user before permitting the exchange. The general practice entails asking the user merely for their mobile number or email address.

This information is nearly not enough to carry out IDV or risk assessment checks. In addition, they can easily be obtained from various other sources. It is not uncommon for people to update their contact information, especially email addresses, on their social media profiles. Being highly prone to identity theft, this data definitely requires substantial refinement and close scrutiny.

AML Compliance for Cryptocurrencies

After May, 2018, the GDPR regulations came into place, which required the companies, ICOs and Cryptocurrency exchanges that are located in the EU region, to update their data protection and access policies. Similarly, in June, 2018, the EU launched a fourth AML directive that was basically directed at combating the cryptocurrency crimes and curb terrorist financing. The directive explained in great detail how the organisations must update and maintain their AML screening processes. If unfollowed by any, strict actions (e.g. they may be sanctioned)  are in place to ensure complete order and protect the virtual marketplace.

A fifth AML directive is also set to come forth in June 2019, which is expected to enhance the security systems by enforcing stricter laws.

Effects of KYC on Cryptocurrencies

Rest assured, the crypto world would be a much better place with secure transactions. Following KYC & AML regulations would limit the number of frauds and prevent huge losses. Crypto crime can be reduced if the identity of the investors for ICOs and users at the Cryptocurrency exchanges is properly and thoroughly verified. Their complete information must be requested and matched against their original, state-issued ID documents. The authenticity of those documents must be checked as well. This will combat forgery and identity theft issues, hence, diminishing incidences of money laundering, terrorism and stolen cards.

If users are to trust the cryptocurrency exchanges, the only way to do that is to ensure that their transactions are safe, their money is not going towards any illicit causes, and that if their identity gets stolen, then their funds are not being wrongly used/accepted at the exchanges. Yet, up until this point, the cryptocurrency exchanges are failing to comply with the KYC & AML regulations, resulting in higher frauds and consequently, higher losses.

The easiest way for companies in the EU to secure their assets and finances is to employ identity management softwares that are easily integrated within their systems.

Shufti Pro solves these issues for you by providing a global service for IDV and AML screening. Our readily integrate-able RESTful API and SDKs make it a complete and hassle free package for your needs.

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shufti pro cryptology partnership

Cryptology partners with Shufti Pro For KYC Services

BATH, UK – (June 20, 2018) – Cryptology is an online crypto exchange that has joined hands with Shufti Pro to utilise cutting edge KYC services provided by Shufti Pro to verify the identity and financial details of its members.

Cryptology is one of its kind start-up company that envisions to make exchange of cryptocurrency hassle free for its users. Currently operating through its web and mobile apps, Cryptology plans to extend its business operations to touch new horizons, in near future. With easy to use interface that supports multiple wallets, Cryptology presents a virtual stock exchange for crypto enthusiasts. Working for a reliable crypto future, Cryptology is looking to resolve issues like complexity of fiat transactions, high commissions and sluggish customer support.

Partnership for KYC Services

To ensure secure transfers and in order to eliminate the risks of fraudulent activities or fake users on their newly launched crypto exchange, Shufti Pro was chosen by Cryptology. Shufti Pro will be providing PCI compliant KYC Services on their web app platform, via its RESTful API. The distinctive features of KYC services from Shufti Pro will allow Cryptology to verify credentials of its users from all around the globe. Shufti Pro also provides universal language support, further enabling the outreach of Cryptology as a cryptocurrency exchange.

Fraud prevention and risk mitigation are not the only features that Shufti Pro brings to this partnership. The Artificial & Human Intelligence Hybrid system of Shufti Pro also provides real time verification so that the users of cryptology don’t have to wait for hours before their identity and financial credentials can be verified. Flawless API integration of Shufti Pro with Cryptology’s web app will create a hassle free UI/UX for the members.

Talking about the partnership with Cryptology, CEO of Shufti Pro, Mr. Victor Fredung said that, “We are proud to have partnered with an upcoming venture like Cryptology. Their business model was in need of a reliable identity verification system that also provided a seamless integration with their system. Shufti Pro ticked all those boxes. Not only that, but the scope of our worldwide services and universal language support means that any person sitting in any part of the globe, having credentials in any language, will be able to buy and sell cryptocurrency on Cryptology app. Now that is what we call a giant leap towards a crypto future.”

On the other hand, COO Cryptology, Mr. Anton Kalinin has this to say about the partnership: “ is a next generation cryptocurrency exchange that makes fiat and cryptocurrency trading easy and secure. Our user friendly web platform provides attractive conditions for professionals and offers an option of a mobile app for those wanting to trade on the go.

Guys from Shufti Pro did exactly what we expected them to do, automating KYC and letting us grow faster. They were the first to respond to our cooperation request! We are totally happy to have chosen them and definitely look forward to continuing our highly productive cooperation.

Implementation of KYC services for a cryptocurrency exchange is a bright sign for people who want to benefit from huge potential of cryptocurrency without risking their investment capital or identity credentials. PCI and GDPR compliant identity verification services from Shufti Pro will also ensure that the data shared by Cryptology customers and members for verification will be fully secure and cannot be breached by any brute force.


About Shufti Pro

Shufti Pro is an emerging name in identity management and KYC/AML. It was founded on 31st October, 2016 in Bath, UK. The goal of the company is to enable its clients with seamless customer experience, fraud prevention and undeterred revenue generation. The company offers state of the art SaaS, which engages Artificial Intelligence and Human Intelligence. Businesses can now conduct easy digital verification processes with lesser friction and more advanced technology. Currently offering its services for all countries of the world along with Universal Language Support, the company is located in United Kingdom with its global office in Sweden. Please visit Shufti Pro here.

Shufti Pro Limited

Unit C401, Westfield Shopping Centre,

Ariel Way, London, W12 7FD

About Cryptology

Cryptology is a team of crypto enthusiasts looking for ways to offer mass access to the crypto market through a marketplace that would cater to all needs at once.Company’s main goal is to simplify the digital & fiat currency exchange transactions for all users. Cryptology strives to create a single platform bringing together fiat transactions and a variety of tokens. Complex procedures will become a thing of the past, as users will be able to buy tokens with fiat currencies. Everything you need will be available on a single platform. You won’t have to deal with high commissions on fiat transactions, difficult KYC procedures and slow support.The key advantage of Cryptology is its own payment system that allows them to manage fiat transactions and offer users, a competitive service fees.

Digital Kyc For Icos

KYC Services For ICOs – Why you need to have them now?

KYC services play a vital role in conducting an ICO in more than one way. They can make the entire process transparent and can boost the credibility of the company intending to hold that ICO. Digital KYC services also assist the organizers to blacklist individuals that can pose financial crime risk for the initial offering.

More and more ICOs are raising funds and a culture of trust is being built between investors and blockchain based ventures conducting these ICOs. This trust is depicted by huge sums of money raised by ICOs belonging to different categories of technology. Here are the top 5 categories, number of ICOs belonging to these ICOs and total amount of money raised by these ICOs for a successful launch of their venture

                                                                                                                    Source: ICOBench

Here are some of the detailed reasons why every ICO must involve a trustworthy KYC service provider like Shufti Pro.

Regulatory Compliance

ICOs are attracting huge interest from regulators of financial world. They are interested that who are the people showing interest in these ICOs and what is the source of their wealth that assist them in making investment in these ICOs. In the hindsight, this interest is not entirely ill-placed. ICOs and cryptocurrency has been attracting lot of criminal elements to transfer their funds from one corner of the world to another. Then there is the case of money-laundering activities being done under the guise of cryptocurrency by several individuals.Involving services of a 3rd party KYC services provider can enable ICOs to offset heat from financial regulators

Actually Know Your Customers

KYC services are like bouncers at the front door of a club. You only allow those customers that are actually going to spend money in your ICO and are genuinely interested in buying a monetary interest in your investment venture. Digital KYC Services will also help reduce the risks by customizing screening criteria, so that you can be specific in eliminating financial risk persons from your ICO. This will help you safeguard the reputation of your up-and-coming venture.

Reliability and Credibility

When KYC Services are integrated in an ICO, it helps the offering entity to earn reliability and credibility among its future investors. They consider the company to be serious in performing a transparent initial offering. After all, appearances have a lot to do with the popularity and credibility of a venture like ICO. Volatility of cryptocurrency has already created lot of doubts about such ventures but when a company employs technology like KYC to ensure an indisputable offering, it will benefit from it in longer run as well. Pumping and dumping phenomenon can surely be reduced by this risk mitigation process, resulting in better ROI for investors who trusted the potential of your product at the time of ICO.

Legitimate Funding

Next generation technologies like KYC combined with AML Compliance, as provided by Shufti Pro, will give full trail of the funds collected by any ICO. Regulators will be answered aptly about the funds raised by your venture and thorough background checks will help you screen out persons, entities and companies that pose financial risk for your ICO. Shufti Pro has a databank comprising of 1000 whitelists and 3000 databases that is updated every 14 minutes. This huge databank is used to perform background checks for AML compliance that will help reduce the risk of regulatory scrutiny.

How Shufti Pro can Help with KYC for ICOs?

KYC for ICOs solutions are offered by Shufti Pro with a lot of room for flexibility. Simple ID verification can be availed to ensure that users with only authentic official IDs are allowed to participate in an ICO process. Shufti Pro can validate official identity documents issued by more than 225+ countries and published in 150+ official languages. Shufti Pro also has the ability to perform ID verification using OCR technology with its InstantCapture solution. In this identity verification solution, personal information of a potential investor are scanned directly from their official identity document and is then automatically uploaded in to the verification form, that is forwarded to Shufti Pro for authentication after formal approval from end-user.

There are many features and aspects of KYC for ICOs solution from Shufti Pro that demand that you seriously consider integrating it with your upcoming ICO. Some of these features are:

  • Proof of Verification
  • Available in 225+ countries
  • Restful API and mobile SDKs for integration
  • Multiple Verification formats
  • Pay as you go pricing feature
  • No minimum verification volume

Looking at all the above features, a strong case be built not only around the advantages of ID verification but also Shufti Pro being the preferred choice for identity verification services.

Shufti Pro Still Verification

Shufti Pro’s® ‘Still Verification’ Feature Enhances Customisation for KYC Services


Demand for enhanced fraud prevention, increased flexibility to customise, improved customer credibility without integration of our API led the team to develop Still Verification feature

BATH, United Kingdom – October, 2017 – Splendid squad at Shufti Pro® outperforms once again as the members join heads to bring the Still Verification feature, for ‘offline’ ID verification. to light in the recently developed SaaS. Shufti Pro announced today that clients who do not wish to integrate their API with their systems but still want to avail their services have gotten prayers answered. Shufti Pro’s developers realised the security and confidentiality concerns expressed by their clients, and responded by efficiently and effectively creating a customised category of the service for their apprehensive patrons.

The talented team has come up with a secure identity verification service that allows their clients to securely share their customer’s document image or video of customer’s face plus documents through Shufti Pro’s API, without any integration requirements. The said SaaS verifies them in real-time, with the same authentication stretch of 30 seconds. This feature is termed Still Verification and brings a revolution in the digital Know Your Customer (KYC)  realm. It has never been easier for our clients to verify their customers without a direct third-party inclusion.

Customer experience is not only enhanced but a trust and credibility is also developed between them and the clients. Shufti Pro is ecstatic to bridge the gap between concerned regulars and a seamless experience. Consumers can trust their clients without any hesitation of giving away their sensitive information to an unfamiliar entity. Shufti Pro seemingly steps out of the scene and remains active at the backend, performing accurate and efficient online identity checks for their clients.

Online businesses and merchants, financial institutions, etc. can easily comply with emerging KYC compliance directives without worrying about security breaches and confidentiality violation. Still Verification serves to ease the trepidations of the users by allowing all their data to directly reach the clients. Shufti Pro is the hallmark of e-KYC and customer satisfaction in the industry and hopes to keep advancing their services to meet the needs of their consumers.