Archive for the ‘News’ Category

Speaker Interview: Johannes Hennekeuser

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Johannes Hennekeuser, Head of Digitrans, IMTF

How close is the financial services industry to achieving standardisation in KYC and identity authentication processes?

  • In the area of ID authentication we see considerable progress towards standardisation. In many countries, the practice of video authentication is already accepted by the regulator and has been implemented by many banks
  • Initiatives towards a Digital Identification of every citizen have started in many countries and will ease the use of digital (self-) services; among first movers we see Aadhaar in India, and the SwissID in Switzerland.
  • Regarding KYC, requirements are getting more complex and laborious, making standardisation difficult due to differences among jurisdictions. The opportunities here are around automation. IMTF is able to automate processes and information searches successfully with the help of AI and semantic and linguistic technologies.
  • How can firms continue to deliver on their KYC and AML obligations within an increasingly demanding regulatory framework?

  • Only an agile setup that constantly and easily adapts to changes can cope with these requirements.
  • IMTF has built a modular and comprehensive platform that can easily be configured and deployed to increase the adaptability to changing regulations (IMTF RegTech Platform).
  • Banks are often using a variety of compliance systems that neither interact nor offer services (APIs). The IMTF RegTech Platform includes an integration layer that brings together vendor-specific APIs and file-based interfaces with rule logic and workflows.
  • What are the best ways firms can implement new technology to reduce KYC compliance costs while retaining customer loyalty?

    Banks are facing challenges here on all fronts, but a few new technologies can help to
    improve the end customer experience:

    Process Automation:

  • By automating manual work for screening and alert processing and replacing siloed solutions with an end2end vision regarding compliance and risk, your teams and systems can be aligned with your regulatory objectives.
  • Data remediation:

  • Create structured, usable data out of your existing low-quality, and unstructured information spread across multiple systems and documents based on an adequate Business Object model.
  • People:

  • Align, educate and equip staff to handle top-priority tasks where human expertise and decision-making is needed. Technologies such as collaboration tools and adaptive case managers help to ultimately improve the accuracy and efficiency of your people.
  • How can firms turn the compliance burden into competitive advantages?

  • While regulators force banks to increase documentation and background research, the additional data collected can also be used to enhance the customer experience and extend product sales.
  • In the IMTF RegTech Platform, we use advanced profiling to both improve fraud detection capabilities and allow a bank to learn more about its customers.
  • With ICOS/2 it’s possible to do segmentation and peer group comparisons, making it easy to target processes, actual customer requirements and identify opportunities for additional product offerings.
  • A fully digitalized onboarding process with self-service features ultimately improves the bank’s image and reputation.
  • How can firms most effectively limit client impact when complying with the KYC refresh process?

  • Banks are required to collect more data and do background checks, so theoretically this would require additional customer questions and documentation. But, by using certain automation technologies, many of these steps can intelligently be done in the background with little customer impact.
  • IMTF offers a Semantic Search feature that is initiated automatically once an enhanced due diligence is required. Seconds later, it delivers targeted content from commercial lists and the web with guaranteed accuracy and compliance, enabled for use anywhere.
  • Case Managers are extremely flexible and support both routine processes and ad-hoc activities. BPM systems don’t have the flexibility to break out of the pre-defined flows and need to run the customer through multiple loops, but our Case Manager allows you to adapt on the fly while also fulfilling regulatory requirements.
  • Why will you be speaking at Finance Edge’s KYC & AML Summit?

    We are excited to participate in lively discussions on what it takes to “reinvent and support” processes from identity authentication to KYC automation and enhanced due diligence. As a RegTech pioneer with 30 years in the market, we will be sharing our best practices for Client Lifecycle Management, KYC/EDD, and AML.

    Speaker Interview: Timothy Vincent

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    Timothy Vincent, Solutions Engineer Manager EMEA, DataStax

    How will the increased use of open APIs shape the financial services market, and how will it impact different market players in both the short- and long-term?

    The increased use of open API’s will impact banking institutions of all sizes, opening up financial services and payments markets to new competitors and service providers. Open API’s will provide new opportunities to make use of banks’ internal data and external market information in real-time and at scale as part of delivering customer services.

    Which activities should banks be prioritising in the wake of open banking?

    To meet the requirements around open banking, consolidation of data should be a priority. By looking at how to manage data at scale, banking IT teams can implement new cloud applications that can meet new customer experience expectations. Without the ability to consolidate data effectively, understand the relationships between the data elements, and achieve all this in real time, banks will find it difficult to implement new services that customers will value and face a potential loss of those customers to competitors.

    What opportunities does Open Banking present, and which commercial strategies will thrive in the new environment?

    Opening bank systems to third party access is a huge risk unless banks organise themselves to leverage data as a differentiator; this is the opportunity. This goes beyond looking at current data sets that are held in individual silos and instead involves thinking about how to use external and internal data sets together. The alternative is to let competitors take this approach. The strategy is to hold the data in an operational data layer to have a 360 view of your customers to better deliver a fully personalized experience in the context of where they are on their journey with the bank right now.

    How can firms overcome the security and privacy concerns associated with data sharing?

    This is a hot topic at the moment with the deadline of having a GDPR compliant strategy looming fast, especially when looking at hybrid cloud or multi cloud architectures. You need not only a data platform that comes with advanced security, encryption, access controls, audit trails, but also the ability to maintain data autonomy. For example, in a hybrid cloud architecture you need the ability to control which data resides on premise and which data resides in the cloud. DataStax has the ability the address this and other data autonomy requirements.

    What are the best strategies to encourage customer engagement?

    Having a customer-centric strategy where an organisation demonstrates that it has robust data privacy capabilities that are to the benefit of the consumer is a major USP that will drive customer engagement.

    Why will you be speaking at Finance Edge’s Open Banking Summit, and what do you hope to get out of the event?

    As a software vendor it is vital for us to be in regular contact with customers and potential prospects in order to better understand current market trends and emerging market requirements.

    Speaker Interview: Abe Smith

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    Abe Smith, Founder & CEO, Dealflo

    What is Dealflo’s role in helping financial services companies with the KYC process?

    Dealflo’s cloud-based solution allows financial services companies to fully digitise the transaction of customer agreements that carry risk, such as finance agreements, loans, mortgages, and life and pensions agreements.

    Dealflo’s technology helps financial services companies move from manual or semi-manual onboarding processes to fully automated processes, where a customer’s identity is verified digitally, and agreements are signed electronically. Agreements which are signed electronically require stronger evidence to confirm a person’s identity than would be required if an agreement was signed face-to-face. We give our clients access to various KYC methods to help them balance the need to provide a great customer experience, with the need to mitigate risk.

    How can firms continue to deliver on their KYC and AML obligations within an increasingly demanding regulatory framework?

    Looking at KYC in the context of a completely digital onboarding process, there’s a delta between the minimum you need to be compliant with regulations and what is advisable as best practice. Dealflo help enable our clients to be on the right side of that delta, whilst offering a frictionless experience to their customers. Financial services companies should be looking for KYC processes that assist with compliance and mitigate risk robustly.

    What are the best ways firms can implement new technology to reduce KYC compliance costs while retaining customer loyalty?

    There are a multiplicity of KYC and AML vendors out there, with fantastic technology that can help financial services companies reduce KYC compliance costs and retain customer loyalty. However, the problem many financial services face, is that they do not have the bandwidth or desire to do multiple integrations with multiple providers of KYC services. My advice to financial services companies would be to look for a flexible solution that offers access to multiple KYC methods, so that they can pick and choose KYC methods which are most appropriate for particular processes or products. This will enable them to optimise not just for cost, but risk and customer experience factors too.

    Dealflo has sourced leading technology to address the wide-ranging needs of financial services providers. This enables us to give clients access to the widest array of global identity and verification checks available, all through a single integration, single contract and single API. Dealflo’s clients can pick and choose the best identity checks for them – such as credit reference agency checks, or innovative new KYC methods such as automated document verification, biometrics, facial recognition, IP geolocation or mobile device identity.

    How close is the financial services industry to achieving standardisation in KYC and identity authentication processes?

    The industry is nowhere near a standardisation, nor should it be. Each financial transaction is different and carries a different amount of risk. When you consider factors such as the value of an agreement, the profile of the customer, the method by which the agreement is signed, the extent to which the product/service is regulated, and many more, you soon realise that there is no appropriate ‘one size fits all’ KYC method.

    The goal shouldn’t be a standardisation – it should be to create a flexible and configurable service that can accommodate all these variations and deliver the most appropriate KYC method for each. A ‘platform as a service’ approach allows financial services companies to achieve this.

    Why will you be speaking at Finance Edge’s KYC & AML Summit, and what are you most looking forward to at the event?

    KYC & AML have historically been considered as isolated compliance requirements to ‘get done’, instead of integral steps in a financial transaction. We want attendees to view KYC and AML as steps which produce evidence which is essential to establishing the veracity of an agreement. If identity evidence is integrated into a tamper-proof signed agreement, then that agreement is much stronger if challenged.

    We are attending the KYC & AML Summit to discuss these processes in the broader context of digital onboarding and to help spark new discussion to think about KYC and AML differently. I’m looking forward to discussing and establishing the role of KYC & AML in customer onboarding and seeing where the industry is headed next.

    KYC & AML Summit
    7 March 2018 London

    Abe Smith will be join us during the KYC & AML Summit. This high-level and interactive forum, will bring together senior-level professionals from all corners of the kyc & aml space.
    Contact us to secure your place

    I’m only human, after all (don’t put the blame on me)

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    Written by Simon Bussy on Tuesday 12 December 2017
    © First published in thewealthnet, November 2017

    “Maybe I’m foolish, maybe I’m blind
    Thinking I can see through this and see what’s behind
    Got no way to prove it so maybe I’m blind”

    Rag‘n’Bone Man is spot on. Maybe I am foolish. Maybe I am blind. Maybe I can’t see what I think is around the corner. But. And it’s an important but. I believe there’s enough evidence – based on the businesses I visit, the research papers I read, the people I speak to, both here in the UK and overseas, that we are edging towards the cusp of something that might just threaten the relevance of many businesses operating a traditional model in the wealth sector – even for some of those who think they’re ‘doing digital’.

    Waiting to be terminated

    The robots are coming – but not in the ways predicted in science fiction movies. Artificial General Intelligence – where a machine can successfully perform any intellectual task that a human can – is the stuff of science fiction, and many, many decades away. But while we can breathe easy that Terminators are not out to get us just yet, the exponential progress we are making with digital automation and AI means that productivity, efficiency and quality improvements across a whole range of industries – financial services included – are here, right now, and developing fast.
    And just like in the movies, the impact of digital will be disruptive, will be transformational. A recent report published by the Bank of England estimated that one in three jobs are at risk of automation by 2030. If that happens, the face of work – and pensions – will never be the same again. People will be terminated, just in a different way than in the movies.

    The human touch

    A great deal of media attention over the past few years has focused on what has been termed ‘robo-advice’, with technology providing guidance to those with relatively straightforward investment requirements. Many of these early ‘robo’ propositions in the UK have focused on ISA and GIA products, and with challenging commercial models and little in the way of offering ‘real advice’, have often been scoffed at as a mildly amusing irritant by those with many years in the industry.
    But as with all new developments, lessons are learned, businesses evolve, new entrants emerge, not least the high street banks. One key lesson is that pure digital (or ‘robo’) is frequently not a winning proposition on its own, especially for a new brand. Instead, these propositions require the reassurance of the ‘human touch’ to be truly effective. As a result, some D2C propositions, such as MoneyFarmMoolaNutmeg, and Scalable Capital, have broadened their service to support B2B2C. Others, such as eVestor and Flying Colours, have developed hybrid solutions from outset, meeting the customer’s needs through a seamless digital experience and a human adviser where needed.
    Meanwhile, some of the B2B services, such as Wealth Wizards and EValue, have taken on the ‘advice challenge’ and developed advice algorithms capable of providing regulated advice, rather than purely driving the investment decision. And as the market matures, we’re now seeing a number of ‘robo’ propositions looking at pensions and retirement planning, especially the pension transfers opportunity, which will enable them to scale more quickly. A smaller number are considering even more complex markets.

    Wasted spend

    The key for these propositions – and for the high street brand incumbents, the adviser firms and the wealth managers who are adapting their models – is to work out which aspects can be automated without a problem, and which parts still need the human touch. The hype may have focused on the front-end and what has been termed as the customer journey, yet much of the development focus is in the areas that customers don’t see, but which contribute significantly to the whole end-to-end process and customer experience.
    When it comes to repetitive processes and transactional tasks, computers are faster, cheaper and more consistent than humans. In many cases, automation can also mean more compliant processes, with RegTech – or Regulatory Technology – now receiving much attention [see Altus Whitepaper]. Any technology that can provide greater regulatory compliance and assurance, consistently and at speed, is not surprisingly going to be popular, bringing with it the promise of greater profits and less regulatory risk.

    But much of the current spend will be wasted.

    Why? Because some businesses, some leaders, are just not ambitious enough. And ‘digital’ to them means tinkering around the edges, often aiming to provide the same, traditional linear investment journey but a bit quicker and at lower cost.
    Others – both in the market and that I see in development – are pushing the boundaries further, much, much further. They recognise how the world is changing, how society and behaviours are changing. They don’t just incorporate digital capability, they aspire to be digital businesses – with a proposition that meets the needs of customers, delivers an Amazon or Facebook-style user experience, and is optimised to drive greater savings and deliver greater returns.
    We will see the rise of new marketplace propositions which take into account a customer’s complete financial position, using real-time smart technology to proactively work out how to save the client money, for example on their utilities or car insurance, where to get good deals on regular purchases or things they’ve been ‘Googling’, where to save or invest, or how to optimise their income in retirement from their various wrappers and other assets. These new advice propositions are developing self-learning machines that will require no human intervention at all. Adding real value in real time. These are the services that will make much of what we see today look very pedestrian, very dated, very quickly.
    Often the argument is that a robot can’t hold your hand or look you in the eyes in a bear market, and that’s a fair challenge. But anyone who thinks this type of digital experience – where the customer is truly at the centre of an all-encompassing service, not just at the end of a product sale – is light years away, well, it’s getting increasingly close to happening. And who’s to say it can’t be combined with reassuring humans, anyway?

    Man vs Machine, Man plus Machine

    Of course, many roles that were carried out by people are already being taken on by machines, and the automation of operational roles is a key transformational focus of any firm. And asset managers have been using powerful technology and algorithms for years to support their trading. Some now only use technology…

    But even with these developments, it doesn’t necessarily mean that headcount is going to be cut dramatically – at least not in the short-term. Instead, we’ll see skills evolve and roles shift, or be created, with a greater need for technically demanding and knowledge-based activities, such as advanced analysis, interpretation and decision-making, that call for human insight and subjective assessment. Employers will be clamouring to employ (or outsource) behavioural psychologists, data scientists and AI experts, for example.
    Plus, the machines still – for now – require some form of human oversight and support. We still live in a world where many people still like the reassurance of speaking to a human during the decision-making process, and I don’t expect that to change any time soon.
    With so much at stake, so many moving parts, defining the capabilities that will be required, the roadmap from the ‘as is’ operating model to the ‘to be’ has never been more critical [see Altus methodology here].

    Deceived by what you believe

    “Take a look in the mirror and what do you see
    Do you see it clearer
    Or are you deceived in what you believe?”

    Quite simply, those who resist change, or who think ‘digital’ is something you ‘do’ alongside everything else, are deceiving themselves, and will find their propositions, in time, are no longer fit for purpose. And many of these will ultimately make headcount reductions simply to reduce costs to try to compete, not because they have re-imagined their businesses to truly compete in the new world order.
    We all have choices to make. Don’t be the one left saying:
    “I’m only human, after all, don’t put the blame on me.”


    Who can see your data? ☠

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    You’ve seen it: high-profile hacks have taken over the news. There’s so much that can be done with data gathered through KYC compliance, but you’re always looking at that dreaded data breach.

    We’ve asked our AML experts for their input on the best ways to prevent any sneak-peaks on client and company information:

    • Decentralise your data – Determine who needs access to what, and enforce it. Don’t give fraudsters an easy grab.
    • Give your clients control of their own information – If they can decide what to do with their information, you won’t be risking open access to any data lakes (or swamps!)
    • Move towards a real-time transaction monitoring model – Catch fraudulent transactions while they happen. Build this into your long-term strategy to stop them before they can disappear.

    None of these will be a one-size-fits-all strategy, but these are all important steps to take in building out your defences.

    If you want to help shape fraud prevention and data privacy strategies, join us at the KYC & AML Summit on 7 March in London. This event will bring top FS executives together to discuss how they are overcoming their biggest AML challenges today.

    Visit the website | See speakers confirmed

    Super Early Bird! Book by 22 December to pay only £599*

    Contact our customer service team on +44 (0)20 3397 7458 or email us on

    E-musing … towards a new identity?

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    The recent Equifax breach has prompted renewed speculation about a possible successor to Social Security numbers for personal identification in the US. Has the time finally arrived for a new – and more secure – form of digital identity?
    A secure, universal identifier is intuitively appealing, but soon runs up against a couple of harsh realities. From a security point of view, repeated use of the same identity is a no-no. Regardless of the technical security underlying any solution, breaches can and will happen – probably as a result of human error. The more systems there are involving a single identity, the more likely a breach and the more devastating the consequences.

    A widely-used digital identity also has substantial privacy drawbacks. The more different data sets are connected, the more we reveal about ourselves. With ever more powerful data mining and artificial intelligence, we are already revealing far more about ourselves than perhaps we should.
    So should we rule out the idea of a single identity in favour of separate identities and verification systems for each organisation we interact with? While security and privacy suggest we should, experience hints otherwise.
    From the individual’s point of view, a single identity is hugely convenient. Maintaining security with multiple identities has always proven problematic. The temptation to reuse or write down passwords is almost overwhelming. And for those who follow current best practice by using a password manager, doesn’t that create a single point of failure?
    Equally, while many will talk the talk on privacy, experience suggests that consumers are quite happy to sacrifice privacy for convenience.
    From the point of view of digital identity provider, creating a widely-used digital identity is an exciting opportunity. For governments, it has the potential to boost efficiency (and to exert increased control over the citizens in regimes that lean that way). For banks, perhaps digital identity offers a way to regain a measure of control to offset the disruption of Fintechs and open data? Meanwhile tech companies such as Facebook have already shown the huge financial value that is on offer.
    So, security experts and privacy advocates have good reasons to worry about any kind of universal identity. But consumers, and the organisations they deal with, have already shown their preference. Which side will win out? And will it be governments, bankers or tech companies that have the muscle – and the trust – to create the digital identity standards of the future?

    ID & KYC Summit US
    November 7, 2017. New York

    Finance Edge’s next ID & KYC Summit US will be held in New York on Nov 7 – bringing you the best minds in KYC, AML, CDD and client onboarding
    Contact us to secure your place

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