By Rhys David,CEO at Credas
In recent months, regulatory bodies such as HMRC have been rapidly introducing new elements to financial legislation and in turn enforcing harsher penalties for those that do not comply.
Unfortunately, this legislative burden on FinTechs and the amount of work required to ensure compliance often outweighs the resources any business has available.
Pair that with the rapid developments in technology that we are seeing in all areas of enterprise, from AI to the Internet of Things, and it’s not surprising that we are seeing the regulatory technology (RegTech) space advancing at an exponential rate.
Everything from facial recognition technology to NFC passport chip reading is aiding FinTech businesses in their quest for compliance, bolstered by the added security that assets like cloud technology bring when it comes to data storage.
Yet while technological advances are certainly something to be celebrated, it’s equally important to recognise the new set of challenges that accompany them as governing bodies impose regulations and best practises that rely heavily on the use of cutting-edge tech in order to stay ahead.
This is very much the case with identity verification, where businesses who are still relying on manual processes to achieve compliance with their customer checks are falling behind and risking a serious penalty as a result.
Identity verification is a major component of some of our most significant regulations in the world of FinTech, including Anti-Money Laundering and Know Your Customer checks. Anything from carrying out age verifications to reviewing mortgage applications relies on quickly and accurately identifying a person’s identity, and yet so many businesses aren’t yet harnessing the technology available to simplify this process.
With HMRC’s 5th Anti-Money Laundering Directive (5AMLD) coming into effect on the 10th January*, and the 6th Directive approaching not far behind, FinTechs will soon be under a great deal of scrutiny when it comes to their identity checks and it’s vital that businesses are aware of the solutions that RegTech can offer.
A recent study estimated that the time taken to complete efficient identity checks took up over four business days per month, with the main barriers to completion being cited as getting hold of the correct ID documents, as well as time constraints.**
Most companies described the amount of time taken to complete checks as long and costly, made that much harder because clients are often confused by the type of identity document they need to provide.
That’s where facial recognition technology comes in. The use of facial recognition is getting its fair share of coverage in the news at the moment, but despite its controversial nature I firmly believe that we should be supporting the use of this kind of innovative technology. Its benefits are immense and facial recognition is truly changing the face of money laundering compliance due to its accuracy and speed.
Our own biometric facial recognition technology can be used to verify a person’s identity anytime, anywhere. Customers can download an app at home and simply take a selfie along with a picture of their photo ID. A unique action protocol then ensures the customer is real and present at the point of verification and the technology confirms whether they match the ID.
Outside of facial recognition, there are multiple assets within regulatory technology that
RFID chip reading offers 100% accuracy for anyone verifying government issued passports with smartphone NFC technology, document authentication software allows you to carry out comprehensive checks on individuals or companies across thousands of types of identity documents, and even Cloud technology has a part to play in complying with GDPR legislation.
In this digital day and age, there is no need to rely on filing cabinets to keep copies of personal identification documents and the General Data Protection Regulations makes it near impossible to have a valid reason to store data in this way.
Identity fraud ison the increase and businesses that look after sensitive client information need to be mindful that there are more robust storage solutions like Cloud technology out there.
Whether you’re an investment platform, a challenger bank or a digital loan provider, using identity verification technology helps to speed up and simplify processes that have increasingly absorbed employee time and company resources in FinTech. Its application removes the risk of human error when carrying out important ID checks, negates the need for physical scans and photocopies to be used, and ultimately lets financial businesses get back to what they do best.
With new security threats and therefore new regulations emerging frequently in this sector, it’s critical that innovative financial companies take all the necessary steps to protect their business interests and their customers – and with the abundance of new technology available, no business should be putting themselves at risk.
About the author:
As Chief Executive Officer of Credas, Rhys David aims to fundamentally transform and revolutionise the way businesses manage their compliance and due diligence processes, while maintaining rapid digital transformation in a sustainable way.
Credas launched in May 2017 and provides a simple, quick and secure way of verifying someone’s identity using real-time facial recognition technology. As well as confirming that the ID is real, the Credas app will also ensure that the same person is sending it. All files are then stored in a secure cloud environment so all data is secure and will help with GDPR legislation.
Its technology works in a range of sectors, including recruitment, mortgage and finance providers and any business which needs to verify ID to comply with regulations. It can help companies comply with right to work, anti-money laundering, modern slavery, know your customer and anti-fraud legislation. Credas is a partner of the Guild of Property Professionals and has been recognised as the Best StartUp at the Fintech Wales Awards 2019 and Technology Business of the Year at the Wales StartUp Awards 2019.
**Source: The study was commissioned by Credas and conducted by OnePollamong 200 people in July 2018.
Oil prices hit 11-month highs on tighter supplies, Fed assurance on low rates
By Florence Tan
SINGAPORE (Reuters) – Oil prices rose for a fourth straight session on Thursday to the highest levels in more than 11 months, underpinned by monetary easing policies and lower crude production in the United States.
Brent crude futures for April gained 19 cents, 0.3%, to $67.23 a barrel by 0400 GMT, while U.S. West Texas Intermediate crude for April was at $63.30 a barrel, up 8 cents, 0.1%.
Both contracts touched their highest since January earlier in the session with Brent at $67.44 and WTI at $63.67.
An assurance from the U.S. Federal Reserve that interest rates would stay low for a while boosted investors’ risk appetite and global financial markets.
“Comments from Fed Chairman, Jerome Powell, earlier in the week relating to the need for monetary policy to remain accommodative have probably helped, but sentiment in the oil market has also become more bullish, with expectations for a tightening oil balance,” ING analysts said in a note.
A rare winter storm in Texas has caused U.S. crude production to drop by more than 10%, or 1 million barrels per day (bpd) last week, the Energy Information Administration said. [EIA/S]
Fuel supplies in the world’s largest oil consumer could also tighten as its refinery crude inputs had dropped to the lowest since September 2008.
The Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, is due to meet on March 4.
The group will discuss a modest easing of oil supply curbs from April given a recovery in prices, OPEC+ sources said, although some suggest holding steady for now given the risk of new setbacks in the battle against the pandemic.
Extra voluntary cuts by Saudi Arabia in February and March have tightened global supplies and supported prices.
(Reporting by Florence Tan)
Australian media reforms pass parliament after last-ditch changes
By Colin Packham and Swati Pandey
CANBERRA (Reuters) – The Australian parliament on Thursday passed a new law designed to force Alphabet Inc’s Google and Facebook Inc to pay media companies for content used on their platforms in reforms that could be replicated in other countries.
Australia will be the first country where a government arbitrator will decide the price to be paid by the tech giants if commercial negotiations with local news outlets fail.
The legislation was watered down, however, at the last minute after a standoff between the government and Facebook culminated in the social media company blocking all news for Australian users.
Subsequent amendments to the bill included giving the government the discretion to release Facebook or Google from the arbitration process if they prove they have made a “significant contribution” to the Australian news industry.
Some lawmakers and publishers have warned that could unfairly leave smaller media companies out in the cold, but both the government and Facebook have claimed the revised legislation as a win.
“The code will ensure that news media businesses are fairly remunerated for the content they generate, helping to sustain public-interest journalism in Australia,” Treasurer Josh Frydenberg and Communications Minister Paul Fletcher said in a joint statement on Thursday.
The progress of the legislation has been closely watched around the world as countries including Canada and Britain consider similar steps to rein in the dominant tech platforms.
The revised code, which also includes a longer period for the tech companies to strike deals with media companies before the state intervenes, will be reviewed within one year of its commencement, the statement said. It did not provide a start date.
The legislation does not specifically name Facebook or Google. Frydenberg said earlier this week he will wait for the tech giants to strike commercial deals with media companies before deciding whether to compel both to do so under the new law.
Google has struck a series of deals with publishers, including a global content arrangement with News Corp, after earlier threatening to withdraw its search engine from Australia over the laws.
Several media companies, including Seven West Media, Nine Entertainment and the Australian Broadcasting Corp have said they are in talks with Facebook.
Representatives for both Google and Facebook did not immediately respond to requests from Reuters for comment on Thursday.
(Reporting by Colin Packham in Canberra and Swati Pandey in Sydney; Writing by Jonathan Barrett; Editing by Leslie Adler, Stephen Coates and Jane Wardell)
OPEC+ to weigh modest oil output boost at meeting – sources
By Ahmad Ghaddar, Alex Lawler and Olesya Astakhova
LONDON/MOSCOW (Reuters) – OPEC+ oil producers will discuss a modest easing of oil supply curbs from April given a recovery in prices, OPEC+ sources said, although some suggest holding steady for now given the risk of new setbacks in the battle against the pandemic.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, cut output by a record 9.7 million bpd last year as demand collapsed due to the pandemic. As of February, it is still withholding 7.125 million bpd, about 7% of world demand.
In January OPEC+ slowed the pace of a planned output increase to match weaker-than-expected demand due to continued coronavirus lockdowns. Saudi Arabia made extra voluntary cuts for February and March.
Three OPEC+ sources said an output increase of 500,000 barrels per day from April looked possible without building up inventories, although updated supply and demand balances that ministers will consider at their March 4 meeting will determine their decision.
“The oil price is definitely high and the market needs more oil to cool the prices down,” one of the OPEC+ sources said. “A 500,000 bpd increase from April is an option – looks like a good one.”
A rally in prices towards $67 a barrel, the highest since January 2020, the rollout of vaccines and economic recovery hopes have boosted confidence the market could take more oil. India, the world’s third biggest oil importer, has urged OPEC+ to ease production cuts.
Saudi Arabia’s voluntary cut of 1 million barrels per day (bpd) ends next month. While Riyadh hasn’t shared its plans beyond March, expectations in the group are growing that Saudi Arabia will bring back the supply from April, perhaps gradually.
Some OPEC+ members also anticipate that the Saudis will be willing to ease cuts further, but it was not clear if they had had direct communication with Riyadh.
Saudi Arabia has warned producers to be “extremely cautious” and some OPEC members are wary of renewed demand setbacks. One OPEC country source said a full return of the Saudi barrels in April would mean the rest of OPEC+ should not pump more yet.
“The Saudi voluntary cut will be back to the market,” the source said. “I’m personally with no more relaxation, not until June.”
Russia, one of the OPEC+ countries which was allowed to boost output in February, is keen to raise supply and a source last week said Moscow would propose adding more oil if nothing changed before the March 4 virtual meeting.
(Additional reporting by Rania El Gamal and Nidhi Verma; Editing by Elaine Hardcastle)
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