Financial Institutions (FIs) around the world are heavily regulated with the goal of reducing money laundering and funding of terrorism. Complying with global regulations such as FATF and the 5th EU Anti-Money Laundering Directive, keeping track of sanctions and politically exposed persons, require major investments by FIs. Failing to comply with regulations resulted in fines totaling $36 Billion in 2019.
As demand rises for remote and digital account opening, it becomes harder to detect whether the identity documents truly belong to the customer, or in the case of synthetic fraud, if the customer even exists. In order to effectively scale onboarding while reducing risk and ensuring compliance, FIs across the globe have turned to technology ranging from video conferencing to biometric liveness tests to verify remote customers. Several countries have recently updated guidelines to promote remote account onboarding due to the impact of social distancing. As the transition period for implementing the Secure Customer Authentication portion of PSD2 continues for banks and payment service providers, it is likely more FIs will be introducing stronger authentication methods in order to transact in EU countries. Compliance with SCA requires two-factor authentication for electronic payments which can include a PIN or password sent to mobile device or biometrics. Additional guidelines on which technologies and workflows are deemed compliant for opening accounts remotely are sure to follow.
Learn more about detection models used in Acuant’s Trusted Identity Platform for AML Transaction Monitoring.