Wow, time flies. Another year of new and updated compliance regulations and innovations in identity to help protect the physical and digital world from fraud, financial crime, and nefarious activities. As we wind down 2017 — and prepare for a wild ride in 2018 — let’s look back at the year that was. Grab a glass of your favorite bevy, sit back, and remember where we were and how far we have come.
We started off the year with some projections for 2017; there’ll be battles in the US regarding deregulation; there’ll be much consternation in Europe over Brexit, GDPR, PSD2, and 4AMLD; and Blockchain will start making inroads into actual applications. Yes, we know, we went way out on a limb on those.
In the US, while there has been lots of debate, actual changes in compliance legislation have been slow to develop. Proposals to roll back sections of Dodd-Frank was recently blocked by a group of Senators. Trump appointed a new head of the Consumer Financial Protection Bureau (CFPB), but the appointment was controversial as the departing leader had appointed their own successor. The issue is going to court, as it remains unclear who has the legal right to make that appointment.
A proposed national charter for fintech companies remains in limbo. The Office of the Comptroller of the Currency (OCC) recently got a new head and his views on the matter are uncertain. There are also lawsuits in that matter, as some states are suing to control the issue.
In Europe, the 4AMLD rules were set to come into place on June 26, yet many countries missed the deadline. For companies operating in the countries that are in 4AMLD compliance, the new requirements required new due diligence procedures and, in some cases, determination of beneficial ownership.
Negotiations for Brexit were always destined to be difficult and that continues to play out. The date for Brexit was set, 29 March 2019. On December 8, a ‘breakthrough’ was announced that solidifies many of the elements of the breakup and allow discussions to go on to talk about the transition.
Companies continue to prepare for the huge changes of GDPR, PSD2, MiFID II and other regulations that come into effect in 2018.
2017 was the year of blockchain; or, at least, the year of blockchain hype. The price of Bitcoin has risen 13X 18X 16X 18X in the year; no-one predicted that. That has driven interest in all things Blockchain related and the whole ecosystem has grown rapidly.
Many speculators went looking for the next Bitcoin and a new funding model emerged, the initial coin offering (ICO). Over $3.6 billion was raised by 234 offerings, wherein companies raise funds for a blockchain concept; many times that’s all the offering was, an idea. As the model was so new, little or no attention was given to regulatory compliance. By the end of the year, the SEC had issued warnings and even charged one fraudulent ICO with violating U.S. securities laws and defrauding investors.
Almost every major financial player has some blockchain project in play, as the potential for low or no cost transactions, instant settlement, irrefutable trust systems, and smart contracts offer lots of promise. While there has been a lot of discussion about Blockchain, and some uptake, widespread use is still over the horizon.
Although the technology is available, there are other critical factors that need to be in place in order for blockchain to be implemented or adopted. Just as the rules of ICOs require clarification or legislation, whole blockchain ecosystems will require legal and operational consensus. Smart contracts, AI, new models of governance and many other fintech innovations require control, responsibility and accountability. For the blockchain to truly blossom, these social contractual elements need negotiation and settlement.
Innovations in Identity
In a world that is growing ever-more complex, people seek out simplicity. Here at Trulioo, we understand that and design products and services that makes lives easier by smoother customer onboarding, reducing paperwork and manual workflows as well as ensuring compliance processes run as seamless as possible. To complement our electronic identity verification solution, we’ve added two verification services to our GlobalGateway platform.
In October, Trulioo launched on-demand Global Business Verification solution to help clients digitize and automate due diligence processes for Know Your Business (KYB). The solution instantly analyzes, verifies and provides data intelligence for over 250 million business entities around the world. Global Business Verification enables real-time verification of company records through official registers, performs an AML check of the business, uncovers the ultimate beneficial ownership (UBO) structure, and runs KYC checks on UBOs – all through a single API integration.
It’s not only the speed and capabilities of the solution, but the technology behind Trulioo’s Global Business Verification is what really appeals to fraud risk and compliance managers who are inundated with inefficient manual due diligence processes AI, in the form of machine learning and NLP (natural language processing) power the systems to speed up workflows, ensure accuracy and improve over time.
This summer, Trulioo launched ID Document Verification, a second layer of biometric authentication to help optimize customer onboarding, mitigate risk, reduce fraud, and adhere to a diverse range of compliance requirements, especially for regulated businesses transacting across borders. ID Document Verification authenticates 3,500 different types of identity documents from nearly every country in the world and performs checks to determine the authenticity and legitimacy as well as to ensure a document it is not forged or altered.
To prove the customer holding the license is the person they say they are, the customer can take a selfie and that picture is compared to the photo on the ID document.
The RegTech industry, as a whole, has taken remarkable strides in 2017. As a post in Fintech points out, “RegTech is hip.” The sector has a proven agile business model by reducing manual paperwork, cutting onboarding time, tracking and responding to regulatory change, and better managing complex workflows.
As trusted identity verification is such a cornerstone of digital and mobile commerce success, we’re excited to continue our RegTech innovation and determined to cover every person on the planet.
2017 has been a year of evolving identity requirements, a year that fraud monster has shown its ugly head and the fact it won’t go away quietly. There are technological solutions, but they rely on businesses improving their identity procedures. If anything, the consumer will want their personally identifiable information (PII) data to be even more secure.
Thus, the way forward in 2018 and beyond implies methods that give more security for the consumer, while still making it easy for business to check for fraud and onboard consumers quickly and seamlessly.