Violating the Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT) Act 2009 regulations has devastating repercussions for any financial service and related industries.
These include punitive fines of $2 million to $200 million, criminal trials, legal sanctions, tarnished brand reputations, and losses in client and investor trust and relationships.
If you think your manual identity validation workflows can rigidly follow the AML/CFT directives and evade the penalties just fine, think again.
Manual identity verification methods are so inefficient and inaccurate that they can easily create critical gaps in your authentication processes and legislative adherence.
In contrast, online identity verification services ease your regulatory compliance. Learn how as we walk you through this guide.
Overview
The Financial Action Task Force (FATF), a global, intergovernmental, terrorist financing and money laundering watchdog, and policy-making body (of which New Zealand is a member), developed the FATF Recommendations.
This is a set of standards for member jurisdictions to observe the AML/CFT regulations, which, when followed, ensure a globally collaborative and preventive effort against organized crime, terrorism, and corruption.
The FATF recommends these practices for financial entities’ overall regulatory observance, protection, and stability:
Authenticating the account owner’s identity;
Understanding and acquiring information about the business relationship’s intent and proposed nature;
Ascertaining, through continuous scrutiny, the transactions’ consistency with the entity’s awareness of their clients and their businesses, risk profiles, and, as necessary, fund sources.
These standards reflect the heart of the AML/CFT rules -- and one of their salient guidelines in its implementation is Customer Due Diligence (CDD).
CDD specifically entails collecting information about the client’s identity and validating this claimed identity and data trustworthiness.
While CDD and Know Your Customer (KYC) compliance checklists are set up for your security, they are also usually tedious -- which is why digital identity verification is the way to go.
To help you implement outstanding, compliant CDD/KYC protocols, use reliable software tools such as Raytio, a seamless end-to-end identity proofing solution.
Let’s look at some of the features our platform possesses that helps you with regulatory compliance.
Raytio Features for Easier Compliance
Raytio makes labour-intensive identity proofing workflows fast, accurate, and secure with excellent, straightforward features for various aspects, such as:
Ease of Use, Security, and Automation
Manual identity authentication methods consume much time and effort and create process gaps that criminals can quickly exploit.
In stark contrast, electronically proving identities through Raytio streamlines your representatives’ workflows and mandatory audits -- so they can complete tasks in zero to a few clicks.
Raytio automates your AML/CFT compliance operations, such as instant checks with watch lists, automatic document expiry date reminders, always-updated identity information set, and more.
Your agents can also quickly access a wealth of electronic data from reliable sources at the tip of their fingers (more on this later).
With this increased operational automation comes less data handling, the likelihood of human error, necessary identity proofing workforce, and training and administrative spending -- a sure win for your company.
What’s more, Raytio facilitates a safe, comprehensive check-in process for your clients -- letting them log in through a highly secure link, upload their documentation, and own an account only they can access.
We replicate the entire check-in process for fuller identity validation and security, including criminal player recognition, credit card swiping, Terms & Conditions acceptance, etc.
For instance, they can log in and upload their identity documents using highly secure links mentioned in your onboarding emails to them.
Raytio validates this documentation, and concerned persons receive the confirmation. All the authenticated information set is linked to transaction links and secured in a personal account accessible only to the client.
Identity Confirmation and Verified Digital Data Sources
Verifying identities digitally involves two essential elements. One is the authentication of identity details through electronic sources. The other is matching the transacting individual with the claimed personality (i.e., asking if they are the same). You need to fulfill these two components adequately.
Using Raytio, you can access an extensive database of trustworthy, official, and valid electronic sources for verifying personalities.
We cross-examine identity information from government agencies, banks, credit bureaus, accounting system vendors, utility and telecommunication service providers, and various organizations in New Zealand, Australia, and worldwide.
We definitely compare identities with international Politically Exposed Persons (PEP) and sanction watch lists. Plus, you can acquire an audit trail of all these examinations.
We even check with social networking sites and software-as-a-service tools such as Twitter, Twilio, and SendGrid.
Through Raytio, you can also access business and property details, accounting transactions, bank and credit reports, immigration entitlements, education transcripts, residential data, etc.
With this rich trove of comparative identity information, you can sufficiently establish personalities and safeguard your company and clients more effectively.
Secure, Reusable User Profiles
Raytio lets you create secure client profiles containing their verified, historical identity information and documentation.
These profiles are end-to-end encrypted and updateable anytime. You have complete control over their accessibility, backup, removal, storage, and sharing with relevant persons in your company.
This feature goes hand-in-hand with Raytio’s automation capabilities discussed earlier -- easing your agents’ collaboration when proving identities.
Bottomline
At Raytio, we aim to smoothly harmonise a comprehensive identity verification process into your present workflows with our powerful digital system technologies.
This secures your AML/CFT compliance and effectiveness in identity fraud prevention, satisfies your clients, and removes any anxieties you have about them.
So reach out to us and learn more about integrating our Raytio solution into your identity proofing procedures.
This is our fourth and last post in our Online Identity Verification series. You can find the others listed below:
Part 1. Your Ultimate Guide to Online Identity Verification