many industries, offering efficiency and optimization in various processes like remote onboarding and client verification. While the allure of full automation is undeniable, there exist scenarios where its implementation faces challenges due to regulatory constraints or the specific nature of an industry. In such contexts, entrusting complete autonomy to AI systems can be daunting due to the inherent risks involved. This is where the concept of human-in-the-loop emerges as a crucial framework, providing a balance between technological innovation and human oversight.

In data preparation and AI training, the term Human-in-the-Loop (HITL) has garnered significant attention. But what if we extend this concept beyond machine learning and apply it to manual verification processes? Imagine a world where human expertise synergizes with technology to tackle complex and high-transaction-value verification tasks with precision and efficiency.

Welcome to the era of HITL IDV technology revolutionizing manual verification.

Identity verification is the bedrock of modern society, underpinning everything from financial transactions to healthcare services. With the advent of remote onboarding, this process has undergone a revolution, offering unparalleled convenience and accessibility to users worldwide.

HITL: Elevating Manual Verification

PwC reports that 76% of organizations have transitioned to automation in response to Covid-19 and the increased prevalence of remote work. This shift has yielded notable advantages in terms of efficiency, time saving and cost reduction. While embracing automation presents clear business-boosting benefits, achieving full implementation , due to regulations, or specificity of an issue, can pose challenges and may not always be the optimal solution.

While high-risk/high-transaction-value processes demand the sophistication of HITL technology, low-risk/low-transaction-value processes present a different narrative. Here, automated systems may suffice, offering cost-effective solutions without compromising accuracy.

Let's explore some examples of high-transaction x value cases:

1. Financial Transactions in High-Stakes Markets: In trading or high-value financial transactions, the stakes are high, so having an extra pillar of safety for low confidence cases, AI reverts to human expertise to scrutinize process and minimize the possible error,detect anomalies, and mitigate risks effectively. ‍
2. Healthcare Identity Verification and Onboarding: Healthcare regulations often require stringent identity verification processes. Risk of fraud and significant impact on individual health outcomes are real challenges that arise in this industry. Human-in-the-loop (HITL) plays a crucial role in healthcare onboarding customers. A great example of HITL is Video Know Your Customer (KYC) processes, which ensures a personalized epxerience for a customer and an efficient process for a business. As a testament to high-performing and demanding product that is Human-in-the-Loop, Identomat introduced Video KYC and teamed up with Georgia's public registry. Out of 265 services provided by the registry, 185 (and counting) are fully digitally accessible.‍
3. Legal Compliance and Regulatory Oversight: In industries such as banking compliance is non-negotiable. HITL identifies compliance gaps, and implementscorrective measures. Human reviewers leverage their legal expertise and industry knowledge to navigate complex regulatory frameworks, safeguarding organizations against legal risks and reputational damage
4. Corporate Mergers and Acquisitions: Extremely high value financial transactions and significant legal implications. Cybersecurity breaches in corporate mergers and acquisitions can result in various detrimental outcomes, including business disruptions, the compromise of critical data and information, financial setbacks, diminished brand value, reputational damage, and a decline in customer trust. The expenses associated with managing such incidents are substantial. Indeed, instances of fraud litigation following mergers and acquisitions have become increasingly prevalent. Identity verification is crucial to ensure that all parties involved are legally authorized to conduct the transaction and that the identities of key stakeholders are accurately represented.
5. High-Value Transactions: Large sums of money changing hands, such as in real estate or major investments are posed with risks, understandably so. According to a report by the FBI’s IC3 cybercrime unit, victims in the U.S. lost more than $213 million in 2020 because of fraud involving real estate investments or rental or timeshare properties. In these contexts, Identity verification is essential to prevent fraud, ensure compliance with regulations, and safeguard against money laundering.
6. Issuance of Passports and Visas: High security and fraud risk, with substantial implications for national security. Countries with weaker security measures used in passports and other documents usually have higher rates of forged IDs. The price of issuing legal identity documents indirectly reflects this. According to William Russel, an international insurer, an Australian passport is the most expensive travel document in the world now—$230 per issue.Identity verification ensures that individuals applying for passports or visas are who they claim to be, preventing identity theft and unauthorized entry into countries.
7. Access to Restricted Areas: Military and governmental facilities require stringent security measures. Identity verification is critical to grant access only to authorized personnel, preventing security breaches and protecting sensitive information.
8. Uncollateralized Loan Approvals: Significant financial risk and potential for large financial losses. Detecting fraud at the initial stage of the onboarding process can significantly reduce operational expenses in the future. By identifying individuals attempting to exploit new account openings for unlawful purposes, considerable time and financial resources can be saved.
9. Immigration and Customs: It is high stakes in terms of security and immigration control. Airport Security is one of the most significant security challenges faced by countries around the world. Airports, as the most important access point, remain a hotspot for criminal activity with millions of travellers travelling throughout the day. Face recognition technology finds itself at the heart of airport security, with governments realising the incredible benefits of implementing an automated immigration system.
10. Art and High-value Auctions: Significant financial transactions and risk of fraud. From phone bidders to actual visitors of the auction and sellers - anyone could be partaking in some type of a fraud, causing substantial financial risk; identity verification is essential in verifying the authenticity of buyers and sellers, preventing art forgery, and ensuring the integrity of auctions.
11. Insurance Claims: High financial value and risk of fraudulent claims. Creating numerous online accounts using stolen identities has become progressively simpler. Fraudsters obtain batches of stolen or leaked IDs and utilize them to sign up for online insurance accounts, subsequently filing claims.Therefore, having a robust IDV solution, would help reduce such risks by 85-95%.
12. Adoption Processes: These involve high personal and legal stakes, particularly concerning child welfare. Identity verification ensures the suitability of adoptive parents and protects the interests of children.
13. Employment Eligibility: Particularly important for high-security or sensitive positions, identity verification ensures that individuals are qualified and trustworthy, safeguarding organizational integrity and security.
14. Legal Proceedings: Important for ensuring justice, though often not directly related to high transaction values. While not directly related to high transaction values, accurate identity verification is essential in legal proceedings to ensure fairness, protect individuals' rights, and uphold the integrity of the justice system.

This ranking takes into account both the direct financial implications and the broader risks associated with failure in accurate identity verification, which includes legal, security, and societal impacts.

‍

Embracing the Future of Manual Verification

The integration of HITL technology emerges as a game-changer.  Striking the right balance between AI-powered automation and human intervention is essential for organizations to elevate verification processes, mitigate risks, and drive operational excellence. Whether in high-risk financial markets or routine administrative tasks, HITL technology paves the way for a future where precision, efficiency, and human ingenuity converge.

Identomat has proven itself as a trusted partner in HITL technology. With its innovative solutions and unwavering commitment to excellence, the solution empowers organizations to achieve greater efficiency, security, and compliance in their verification processes. Identomat's HITL technology paves the way for a future where precision, efficiency, and human resourcefulness converge seamlessly.

To showcase the robustness of Identomat's AI powered end-to-end KYC platform and how it enables HITL workflows, below we created process flows for two common use cases:  1) Real-estate mortgage title closing and 2) Applying for loans online.

**Whether you're navigating high-risk financial transactions or streamlining routine administrative tasks, Identomat has the expertise and technology to meet your needs. Partner with Identomat today and unlock the full potential of HITL technology in your verification processes.

In the dynamic and often unpredictable world of financial technology, few events have had as profound an impact as the FTX scandal. This saga unfolded not merely as a cautionary tale of a single company's downfall but as a pivotal moment that highlighted the urgent need for robust governance, unwavering transparency, and stringent legal compliance in the cryptocurrency domain.

On March 28th, The New York Times reported, "Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange who was convicted of stealing billions of dollars from customers, was sentenced to 25 years in prison on Thursday, capping an extraordinary saga that upended the crypto industry and became a cautionary tale of greed and hubris." As this scandal continues to dominate the headlines, we aim to dive into where it all started and unfold the entire story for you.

As we embark on this comprehensive exploration of the FTX scandal, it's important to note that the insights and analyses presented are drawn exclusively from credible sources. These include detailed reports and articles from CNBC, Coindesk, CNN Business, official statements from the U.S. Securities and Exchange Commission and etc. Each of these sources offers a unique vantage point, piecing together a narrative that's both complex and instructive.

Understanding the FTX Collapse: A Fact-Based Overview

(From BBC, November 3, 2023 & CNN BUSINESS, February 23, 2023; Coindesk, Novembet 2, 2022)

In November 2022, balance sheet of FTX was leaked in the internet. CoinDesk released an article revealing that Alameda Research, also established by the CEO of FTX, Bankman-Fried, heavily relied on FTX's FTT token, with its assets pegged at $5 billion. A leaked FTX balance sheet exposed a significant lack of diversification, highlighting the intertwined nature of the two firms. The document detailed $9 billion in liabilities, $900 million in assets and vague entries reflecting a negative $8 billion balance.

A central factor in FTX's collapse was the inappropriate use of customer funds. Reports indicate that customer deposits at FTX were redirected to Alameda Research. This redirection of funds, typically meant for safekeeping and trading on the FTX platform, was a significant deviation from standard financial practices in customer asset management. A lack of clear financial separation between FTX and Alameda Research played a crucial role in the unfolding crisis. Alameda Research, a trading firm was trading billions of dollars from FTX accounts and leveraging the exchange’s native token as collateral, according to a source. Many employees and outside auditors were unaware that FTX did not have enough money to match customer withdrawals, the source says. The intertwining of these entities' finances led to a complex situation where the risks and financial health of one significantly impacted the other.

Neither FTX nor its affiliate companies adhered to the norm of publishing balance sheets delineating assets and liabilities. As a private entity, FTX never underwent auditing, leaving no verifiable documentation of cash flow or assets to prove its capacity to settle liabilities or safeguard customer assets. The available FTX balance sheets indicated assets were below the figures Bankman-Fried had declared.

As FTX's financial stability became a topic of concern, efforts were reportedly made to stabilize the market perception of FTX and its digital token (FTT). This included public statements aimed at maintaining customer confidence and preventing a rapid devaluation of FTT. Binance announced that it would be selling all FTT assets that it had. FTT price started falling down resulting in costumers withdrowal of their money from their deposits. During this mass withdrawal, FTX lost billions of dollars. Bankman-Fried ordered Alameda Research to sell assets to cover the needed capital from the withdrawals and he also looked for financing to cover the gap of what was owed and what could be paid.

On Nov. 8, FTX blocked customers from taking money out of the platform by removing that option online, which meant hundreds of thousands of customers did not have access to their money. When FTX could not pay the $8 billion gap, the company filed for bankruptcy. FTX crashed due to mismanagement of funds, lack of liquidity and the large volume of withdrawals. Binance announced it would buy FTX to prevent a larger market crash, but quickly bailed out of the deal as more news reports of mishandled customer funds surfaced.

On November 8, Binance, a rival cryptocurrency exchange and one of FTX's first investors CEO Changpeng Zhao, agreed to acquire FTX amidst emerging challenges. However, the arrangement collapsed, with Binance withdrawing due to concerns over how FTX managed customer funds and impending U.S. legal scrutiny.

The collapse of FTX has had a significant impact on the cryptocurrency market, raising questions about regulatory oversight, market stability, and the management of crypto platforms. The event has spurred discussions about the need for clearer guidelines and stronger governance structures in the crypto industry to protect investors and maintain market integrity.

The Legal Case Against Sam Bankman-Fried: Charges by SEC and Conviction
(From SEC, December 13, 2022 &  From BBC, November 3, 2023)

On December 13, 2022, the SEC charged Sam Bankman-Fried with orchestrating a scheme to defraud equity investors in FTX. According to the SEC's complaint, Bankman-Fried, from at least May 2019, raised over $1.8 billion from equity investors for FTX, including approximately $1.1 billion from about 90 U.S.-based investors. The SEC accused Bankman-Fried of misrepresenting FTX as a safe and responsible crypto asset trading platform. In reality, he allegedly used FTX customer funds for undisclosed venture investments, real estate purchases, and political donations.

The SEC's complaint highlighted several key allegations:

• Diversion of FTX customer funds to Alameda Research LLC, Bankman-Fried's privately-held crypto hedge fund.

• Special treatment for Alameda on FTX's platform, including a virtually unlimited line of credit funded by customer funds and exemption from certain risk mitigation measures.

• Risk exposure from FTX’s dealings with Alameda’s holdings of overvalued, illiquid assets, including FTX-affiliated tokens.

SEC Chair Gary Gensler commented on the case, stating, "Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto." He emphasized the importance of compliance with laws to protect investors and maintain market integrity.

Trial, Conviction and Sentencing

Bankman-Fried's trial, as reported by BBC, revealed a clear pattern of deception. He was found guilty of lying to investors and lenders, leading to the theft of billions from FTX and precipitating its collapse. The jury's verdict, delivered after less than five hours of deliberations, marked a dramatic fall for the former billionaire, once dubbed the "King of Crypto." This guilty verdict encompassed seven counts of fraud and money laundering, carrying a potential maximum sentence of 110 years, though a more lenient sentence is expected. On 28th of March Sam Bankman was sentanced with 25 years in jail.

Regulatory Reactions and Repercussions

The FTX scandal triggered a significant regulatory response, highlighting the need for stringent oversight in the rapidly evolving cryptocurrency sector. This response underscored the importance of legal compliance and investor protection, shaping the future landscape of digital finance.

SEC's Call for Compliance
(From Coindesk, November 9, 2023)

In response to the unfolding FTX scandal, SEC Chair Gary Gensler issued a stern reminder about the importance of legal compliance in the cryptocurrency sector. His comments, as reported by Coindesk, were a direct response to the potential revival of FTX under new leadership and the bids being considered for the bankrupt crypto exchange.

Gensler emphasized, “If Tom [Farley] or anybody else wanted to be in this field, I would say, 'Do it within the law.' Build the trust of investors in what you’re doing and ensure that you’re doing the proper disclosures — and also that you’re not commingling all these functions, trading against your customers. Or using their crypto assets for your own purposes.” This statement highlighted the SEC’s unwavering focus on operating within the boundaries of the law, emphasizing the need for transparency and integrity in business practices.

Gensler's commentary reflects a broader regulatory perspective on the crypto industry, advocating for a framework where investor protection and ethical business practices are paramount. His stance signals a shift towards more rigorous enforcement of securities laws in the cryptocurrency domain, stressing the importance of compliance as a cornerstone for building trust and credibility in this evolving market.

The SEC Chair's call for adherence to legal standards is not just a regulatory mandate but also a strategic imperative for the long-term stability and growth of the cryptocurrency sector. In a landscape marked by rapid innovation and emerging technologies, Gensler’s words serve as a guiding principle for businesses seeking to navigate the complexities of the crypto market while maintaining the trust and confidence of their investors.

Looking to the Future

Going forward, Identomat aims to learn from the FTX case. We recognize that the fintech landscape is constantly changing, and staying competitive requires a commitment to innovation as well as to high standards of governance and ethical practice. Our goal is to create a culture where transparency, accountability, and compliance are fundamental to all our activities.

According to Thomson Reuters, 89% of clients go through an onboarding that creates friction and frustration, and as a result, 13% choose to switch for a competitor. These numbers might sound shocking, but research and evidence show that most companies lose clients before acquiring them. 

According to research by McKinsey & Company, every one-point increase in customer onboarding satisfaction on a 10-point Net Promoter Score (NPS) scale equaled a 3% increase in customer revenue. That’s huge. 

What makes a good customer onboarding process, what are the challenges, and why do companies keep on underperforming in this specific part of their customer acquisition? Let’s shed some light. 

1. Information Overload

It makes perfect sense that when you are onboarding a new client, you have a lot to tell them, show them, and share with them. Do not let your eagerness share all the exciting things about your product/service be the reason people jump off the onboarding ship. 

Keep in mind that people can lose their concentration and can get overwhelmed very quickly. Dropping a ton of information might be an attempt to help and educate them, but the way you share that information can be crucial in whether it has a positive or negative impact. 

For instance, according to Wyzowl, 97% believe video is an effective tool to welcome and educate new customers. Pack a lot of information into video content, or even use video as one of the KYC steps necessary to onboard clients. It’s easier, faster, and as research shows, it is highly effective. 

2. Inaccessible Customer Support 

Customer support is often associated with existing customers. The truth of the matter is that people trying to become customers and are going through the onboarding process need help and assistance as much, if not more, than existing customers. Any difficulty in accessing customer support can create reasonable frustration. 

Easy access to customer support can prove to be pivotal during the onboarding process. 

3. Long, Arduous Process

Onboarding duration is critical in the decision-making process of a prospective client. The longer it takes, the greater are the chances that someone will drop out. How do you cut this process short? How do you optimize it? 

• Be digital-first - Eliminate all manual processes. People should be able to start and complete the onboarding process digitally. It’s fast, it’s accessible, and it takes a fraction of the time. 
• Use simple language - Avoid jargon, corporate lingo, and talk to people directly and conversationally. Get them to act instead of scratch their head.
• Give them feedback during the process - Interacting with people who complete the necessary steps is essential in urging them to take another action forward. Offering advice, pointing mistakes, and clarifying different sections can fast-track a person’s journey and cut the total time significantly. 
• Make sure they interact with your product, not simply create an account - Onboarding should have a clear finish line, and that line should be when the new customer interacts with your service. Going through the KYC process, account verification, and profile creation should not count as a successful onboarding process.  

Choose Identomat For A Smooth Customer Onboarding 

Our team here at Identomat is at the forefront of modern onboarding solutions that ensure you stop losing customers and, instead, increase retention and traction. Feel free to reach out, and inquire about our solution, the features, the technology, and areas we can help you with.

The meaning, impact, and benefits of artificial intelligence change depending on context. AI is such a diverse breed of technology that it means different things to different industries. Today, we’ll investigate how AI is changing the ID verification space for the better and what we should expect going forward.

Data Accuracy

Picture this: a new client is submitting their passport, government-issued ID, and proof of residence for review. In a non-AI world, these documents would have to be checked by a human being. What are the two obvious problems with that? Firstly, it takes a lot of time, and secondly, there is always the possibility of human error. 

Here comes artificial intelligence. With AI, this process is automated. Documents are uploaded through an app or a website, the review happens almost instantly, and the possibility for error is minute. What you have as a result is the opportunity to onboard more clients at a faster pace. From a client-facing perspective, you get happier and more satisfied people who no longer have to wait for ages for their accounts to be approved. 

Building Risk Profiles

Verifying a potential customer’s identity and onboarding them to your company is simply the beginning of a long relationship. Once the customer is onboarded, there needs to be a real-time evaluation of their activity, risk status, and a constant re-assessment of eligibility. 

This process is extremely complicated as it is practically impossible to manually monitor clients, keep track of their activity and record data to build a risk profile. Artificial intelligence can process unstructured data and create these risk profiles on the fly. Just so you get an idea, here are a few external sources AI technology can access to build these risk profiles. 

• PEP lists
• Corporate registries
• Deep web search
• Government data
• Sanctions lists 
• Ultimate Beneficial Owner data
• Adverse media

The sources mentioned above would take time, effort, and resources to access, let alone isolate and analyze. What AI can do is amass the necessary information, build the profile, and afford you the time to assess it critically. Compliance and KYC teams are offloaded from the burden of building these profiles and are gifted with the time and peace of mind to make informed decisions based on the data. 

Workflow Automation

ID verification and KYC are processes that involve a series of steps. These steps need to happen in a specific order, and each stage requires time, effort, and resources to be executed. In a world where people have no patience and an excess of options and alternatives, there is a realistic chance that you will lose potential customers during these steps if you are not making their life easier. 

In an ideal world, people would want to breeze through this process, click “Next step” as quickly as possible and find themselves on the other side of the process in a few minutes. What artificial intelligence does is make each step of the process more efficient and streamline the entire process end-to-end. It creates a seamless workflow where users jump from step to step, decreasing the chances of them switching to another provider. 

From OCR checks and 3D liveness detection to gathering personal information, AI is unifying the process, making it flow. 

Cutting Costs

ID verification and KYC cost a lot to companies. The untrained eye might not see the costs associated with these processes, but a lot goes into it. Here is a list of the main components that contribute to the total cost of KYC:

• The salaries and wages of compliance teams dedicated to reviewing documents and managing the process.
  
• The cost of outsourcing or developing the necessary technology for identity verification and KYC processing.
  
• The loss of revenue from an inefficient onboarding process causing potential customers to quit or switch providers.
  
• The regulatory fines associated with an inadequate verification process.
  
• The reputational harm and loss of customer trust due to a security-related incident such as a personal data breach. 

These components might not sound like a lot, but they have many zeros attached to them. According to Fenergo, financial institutions have been hit with $10.4 billion in global fines and penalties related to AML, KYC, data privacy, and MiFID regulations in 2020. 

According to Autonomous, a financial research firm, by the year 2030, financial institutions can cut up to 22% in costs. Here’s how the report breaks down those cost savings:

Front Office – $490 billion in savings mainly from cutting back on retail branch networks, security, tellers, and cashiers.  

Middle Office – $350 billion in savings by simply applying AI to compliance, KYC/AML, authentication, and other data processing forms. 

Back Office – $200 billion in savings. $31 billion of this will be attributed to underwriting and collections systems.

The potential is endless. AI is not only making the process faster and better, but it’s obviously making it way more affordable. AI is changing the ID verification industry for the better and you should be looking at solutions that have AI at their core. 

Check out our free Identity Verification & KYC Solution Buying Guide. 

What is identity proofing? Why is age verification required for digital platforms?  What are the other methods of avoiding fraudsters carrying out a digital process on behalf of others?

In the era of digitalization, creating a safe and secure environment is a key to success. This is not a new concept, however. Verifying one’s identity has always been a part of the modern world, for instance, visiting your healthcare provider, opening a bank account, or even going to a club - checking your physical ID is what gets you places.

Digital identity verification is simply a process that guarantees the realness of a person behind an action. Modern identity verification software helps businesses to avoid fraudsters carrying out a digital process on behalf of others without their consent while averting fraud or stealing identities.  

What Is Identity Proofing?

With the rise of online platforms, identity proofing services have been implemented in our daily lives. The simple identity proofing definition is the following: a system that ensures that the user is who they claim to be. 

Digital identity verification is everywhere nowadays. This has also resulted in emerging identity-proofing products, as well as different companies that strive to be creative, innovative, and effective. 

What Is Age Verification?

Age verification is one of the identity proofing services. This is a system that ensures that the people using a digital platform or a service are above a certain age. In other words, age verification software makes sure that users consume content that is appropriate for their age.

Age verification systems, otherwise known as age gate, offer a variety of different methods in order to restrict certain age groups from viewing materials that might not be suitable for them.

The most popular methods of verifying one’s age are:

• Birth Date Verification
• Credit Card Verification
• Federated Identification
• Face Recognition

Identity Verifying Software

Finding reliable digital identity verification software is not an easy task. But, with the help of Identomat our digital space can certainly become safe and secure. 

Our AI-powered identity verification and KYC solutions offer never-before-seen benefits for companies looking into investing in identity-verifying software. 

Firstly, with Identomat, account activation is a quick and smooth process rather than annoying and time-consuming. Companies often fail to understand that taking safety measures is usually boring for customers. The identity verification process results in a 68% abandonment rate from end-users. It is undeniable that customer happiness is the determining factor of business success, so losing customers over a tedious and slow verification process is disappointing. 

Although, Identomat allows companies to create a more welcoming and friendly atmosphere for new users. Using our software means that the verification process does not require high effort or much of customers’ time anymore. 100x faster account activation and customer happiness are guaranteed with Identomat identity verifying software. 

Secondly, the manual identity verification process means lost opportunities. Because of manual identity checks, over $100B in opportunity costs are incurred. Identomat can save your company from these losses. With the software, businesses do not have to use a massive amount of human resources, transaction time, and revenue. Identomat gives your company employees a chance to focus on other tasks, which results in increased productivity and a gain in opportunity cost.

However, this isn’t all - Identomat’s functionalities are vast and diverse, created to match your needs, prevent fraud, and make identity verification a crucial part of your journey towards safety. Let’s go over some of the key functionalities Identomat offers.

Selfie to ID Match

Nowadays, ID Verification can be found practically everywhere, in all sorts of different ways. This tool allows us to verify not only the identity of the user, but also their age, and the validity of their document.

With the help of Identomat’s Selfie to ID Match solution, and its AI-powered system, a user is asked to capture the front and the back of the ID document so that it can be matched with a selfie according to the similarity score.

Active Liveness Check

Over the past years, liveness checks have gained rising popularity in the digital realm. This quick and easy-to-use tool guarantees the realness of a person by providing a biometric check through the camera.

With the help of Identomat’s Active Liveness Check tool, a user is given a certain motion to repeat on camera to verify their identity in real-time.

According to Identomat, Active Liveness Checks provide the highest accuracy.

Passive Liveness Check

Another way of a liveness check is a Passive Liveness Check functionality that Identomat introduces. This tool allows the user to simply take a selfie in order to verify who they claim to be with a faster, more seamless experience.

Video Verification

Not every identity verification tool is AI-powered. There are times when a company or even government regulations come into play and this is exactly where the Video Verification tool shines.

With Identomat’s Video Verification functionality, there’s another, a human layer that plays a huge part in verifying one’s identity. A built-in video chat tool perfectly paired up with an AI guarantees the visual checks to be performed quickly and correctly.

OCR

Optical Character Recognition, otherwise known as OCR, has been around in the world of identity verification for quite some time. We’ve seen OCR being used in search engines, translation, and photo editing apps.

Identomat offers its users OCR that can make your journey quick, productive, and secure, by allowing necessary information from the documents to be extracted accurately in order to be turned into data.

ID Validity Check

With the assistance of AI-powered technology, ID Validity Checks have never been this accessible!

Identomat introduces an automatic technology that captures ID documents in a high-quality resolution. Additionally, the biometric data and identifiable information is extracted from the document in order for its validity to be fully assessed. 

Sanctions and PEP Screenings

In a digital world, where anyone can claim to be someone they’re not, it is also possible that we encounter those that have a history of fraud, especially associated with money laundering and criminal activities. We understand how concerning this issue is.

This is why Identomat offers Sanctions and PEP Screenings, allowing one to check each prospective client through sanctions lists, as well as politically exposed persons databases, in order to support the safety for all!

Specialized Watchlists

Last but certainly not least, Specialized Watchlist is an important tool provided by Identomat that adds another layer of security. 

Specialised Watchlist is similar to PEP and sanctions screenings. However, this technology is more broad, allowing the software to cross-check every customer’s identity. 

Identomat makes sure that prospective customers are checked against custom databases of high-risk persons. This way your company is safe from being exposed to dangerous individuals and the data is secured. 

Modern challenges require modern solutions - Ideontomat is your modern solution.

As described above, Identomat offers technologically advanced software that enables companies to save time and resources by automating old-fashioned, manual tasks. In the end, identity verifying software attracts more customers, makes them feel safe, and increases customer satisfaction. 

With Identomat software, human error, the chance of betrayal, unforeseen expenses, and tiring slow processes are all eliminated. As depicted throughout the blog, Identomat never fails to recognize risky behaviour. Hybrid, remote, and digital identity verification options and the seven modules listed above make Identomat software a top favourite for modern companies. 

More and more companies are shifting online, and the demand for automated identity checks is increasing. Level up technologically and competitively with Identomat by including identity verifying software in your company’s daily routine. Results, such as decreased labour cost, speedy customer onboarding, and increased revenue, are only the beginning. 

What Is Liveness Detection? 

Liveness detection is a method of verifying that a person is actually present and not just a photo or video. It is a common tool used  in security applications, such as proving that someone is who they claim to be.

In our fast-paced, constantly-connected world, security is more important than ever. The numbers of online attacks and cyber scammers are only increasing and becoming more dangerous: According to the FTC’s Consumer Sentinel Network report, the reported identity theft doubled from 2019 to 2020 and is expected to grow in the coming years. That's why more and more businesses are turning to liveness detection as a way to protect their data and build trust between the company and their customers.

But How Does It Help With Security?

Liveness detection verifies human identity and avoids deepfake scammers by asking the user to perform a specific action, such as smiling or blinking.

Smiling and blinking, in fact, has become one of the most used practices in the liveness detection process. The reason behind the fact is that both of these actions are very specific and it is almost impossible for hackers to imitate each motion of face muscles while the person is smiling or blinking. The movements focus on micro-movements of the individual’s face muscles, making it unique for every single person. 

This is especially important when it comes to KYC (Know Your Customer) processes. By verifying the data, you can help to prevent fraud and ensure that your customer data is safe.

Liveness detection can also be used as a way to verify the identity of someone who is logging into a system. This is especially important for sensitive systems, such as those used by banks or other financial institutions. For example, banks have been using liveness detection systems for many years now. Also, as online national elections are becoming more popular, liveness checks have also become a priority. In addition to key government and public organizations , many apps and services for everyday life, such as dating apps, mobile-banks, and social media apps, have also been actively adopting the liveness detection practices. 

In the past, people have been able to use stolen photos and videos to impersonate someone else and gain access to their accounts. But with liveness detection, this risk of fraudulent actions can be substantially reduced.

What Makes Liveness Check Valid? 

There are several different liveness detection software solutions on the market today. However, not all of them are credible. One of the most important requests for these kinds of systems to be accredited is a ISO/IEC certification. 

Identomat liveness detection software is iBeta tested and holds ISO 27001 and ISO 30107-3 standards. “ISO/IEC 27001 defines requirements for establishing, managing and maintaining an information security management system.” This certification that Identomat successfully earned, proves that the company follows the many complex and critical international regulations for managing security controls.

Moreover, Identomat is constantly progressing and pushing the cutting edge with proprietary technological advancements in identity proofing and KYC compliance pipeline. 

What Are Different Types Of Liveness Detection?

There are two different ways that liveness detection gets done these days: passive liveness and active liveness. These liveness detection types are two ways to ensure you're dealing with a real person.

Passive Liveness Detection

Passive liveness detection is a less “active” way to detect fake identities. Users are not asked to execute additional motion activities due to passive liveness, and users do not know precisely how the system checks their likeness. Fraudsters have a more challenging time finding ways to get around this technology because the process doesn't inform the user in any way. 

Passive liveness detection is based on algorithms that recognize and evaluate elements of an image that reveal its content, including skin, borders, texture, the presence of masks or cutouts, and other clues that a false depiction of a user's face is being utilized.

Most of the time, companies/businesses prefer passive liveness detection to overactive ones. It is believed that passive liveness checks are more user-friendly, quick, easy, and “frictionless.” With passive liveness detection, the user abandonment rate seems to be lower. A 2022 case study by ID R&D learned that when they switched from active liveness checks to passive ones “customer applications went from a 60 percent completion rate to over a 95 percent rate.”

 However, as technology develops, passive liveness detection might not be the best choice for the more prominent brands because “face spoofing” (imitating or using a person’s face to pretend to be that person and trying to trick the biometric identification control systems) has become one of the leading security worries. 

Active Liveness Detection 

Active liveness detection comes in handy when the passive ones cannot handle deepfakes anymore. 

Active liveness usually asks users to perform 'challenge-response' tests that can be a series of actions in front of a camera to verify genuine presence. For example, an active liveness test may ask the users to smile, to look to one side or towards the ceiling, or to look upwards or downwards.

Active liveness detection can be used to detect a variety of deepfake attacks. These checks are happening in real-time and adds a layer of security to data protection. 

There is no straightforward answer to which of these two is better. Each company's consumer base and risk-based approach should be considered when conducting liveness checks. Companies usually strive to avoid a strategy that prioritizes one over the other and make an effort to achieve a balance between the two.

Threat Of Deepfakes To The Online Data Security

Deepfakes are fake videos or images created using artificial intelligence (AI) and machine learning algorithms. They can be used to initiate false or misleading content and can be very difficult to detect.

The internet has become a breeding ground for all threats, including deepfake attacks. Deepfake cyberattacks result in spreading misinformation and/or defaming the person depicted in them. Hackers have used deepfake technology to create fake videos of celebrities, politicians, and even ordinary people. Deepfakes can access any information by scamming the security systems and the data then becomes exposed to various dangers. 

Deepfake attacks can be challenging to detect, as they often look realistic. However, there are some ways to avoid this cyberattack. One way is by using liveness detection software. 

For example, Identomat liveness detection can expose fraudulent attempts by addressing non-living objects that might exhibit human traits and characteristics. These traits are called “spoofs,” and many companies struggle with these scams, such as masks, dolls, pictures, videos, and more.

Identomat software detects deepfakes such as:

• Paper masks
• Digital photos
• Deepfake puppets
• Lifelike dolls
• 3D masks
• Wax heads

It Is Time To Level Up Your Company’s Security Standards

Liveness detection is an essential tool in the fight against deepfakes and other, less sophisticated though more prevalent, identity fraud methods. It's a simple, effective way to keep your customers, business and data safe.

Identomat’sv KYC and Identity verification solution is trusted by industry leaders like TBC Bank, Bank of Georgia, Space Neobank, Aldagi, Silknet, and many more to protect their data and their customers. 

We offer hyper-configurable liveness detection workflows, so you can choose the one that best suits your needs. If you're looking for a way to improve your security and protect your data, liveness detection is a must have. Contact us today to learn more about our liveness detection software and how it can help your business.

The Benefits of Integrating ID Verification with AML/KYC Screening

March 13, 2023

Identomat’s end-to-end solutions enable frictionless onboarding and compliance.

Remote onboarding is increasingly the norm for financial services companies. Customers expect to be able to open an account, apply for financing, secure services, and transfer funds remotely. For companies, this presents a major challenge: balancing customer expectations of instantaneous service with mandatory Anti-Money Laundering and Know Your Customer (AML/KYC) screening requirements.

First, what are the differences between KYC and AML?

KYC verification: companies must collect information from customers, including ID details, collate that information with government databases, confirm that IDs are real and valid, and verify the customer’s identity.

AML screening: customers and their identifying information must also be screened against government watchlists to ensure that they are not subject to government restrictions or require additional due diligence (for example, in the case of PEPs).

Identomat solves for both by partnering with Castellum.AI to integrate its global financial crime prevention solution into Identomat’s ID verification solution.

New York City-based Castellum.AI is the most accurate, reliable and fastest financial crime prevention solution, built by former regulators and Wall Street data experts. They make AML/KYC compliance simple, accurate, and safe.

Why AML screening is a necessary component of onboarding

Businesses, and especially any type of financial institution, are obligated to comply with watchlist screening requirements.

This includes screening customers against relevant national and international sanctions lists, law enforcement wanted lists, export control restrictions, and identifying whether a customer is a politically exposed person (PEP) requiring additional due diligence.

The risk for companies and financial institutions that don’t comply with AML requirements is significant. In addition to reputation damage from violations, fines can reach millions of US dollars.

In 2022, fines issued by the US Department of Treasury’s OFAC alone totaled over $38 million and targeted US and foreign companies ranging from banks to payment processors to hospitality companies like Airbnb.

Moreover, the number of sanctions has grown significantly in recent years. In 2022, over 11,000 new targeted sanctions were introduced. While the majority of which targeted Russia over the invasion of Ukraine, the locations of sanctions targets spread across 106 countries, from Azerbaijan to Turkey to the UAE.

Companies must comply with sanctions enforced in the country in which they operate.

Additionally, if an organization has overseas customers, is providing cross-border transactions or services, or handles transactions in foreign currencies (particularly the US Dollar), foreign sanctions regimes also need to be screened.

In addition to local lists, most organizations also screen The Big Four, which are:

1. UN sanctions

UN sanctions are applicable to all 193 UN member states.

2. US OFAC SDN

All US citizens and corporate entities must adhere to OFAC sanctions. Entities that have US affiliates, trade in US dollars, and/or use US services must also comply with OFAC regulations. The importance of US dollars in global trade and finance extends OFAC’s reach globally.

3. EU sanctions

EU sanctions are applicable to all EU citizens and corporate entities operating in any of the 27 EU member states.

4. UK sanctions

UK citizens and all individuals/entities located within the UK must comply with HM Treasury OFSI (Office of Financial Sanctions Implementation) sanctions. Foreign branches of entities established under UK law must also adhere to HMT sanctions.

Streamlining AML Screening within ID Verification

As part of Identomat’s KYC and ID verification solution, customers’ identifying information is already collected and standardized.

This same information can be screened against Castellum.AI’s risk database to meet AML requirements, including:

Names: Customers’ full legal name should be screened against sanctions lists.

ID Numbers: government issued IDs, including passport numbers, driver license numbers or tax numbers should be screened.

Dates of Birth: this information increases accuracy and minimizes false positives, particularly for common names.

Locations: Customers’ addresses, including street address, city of residence, province, and country – both support identity verification and can be screened against global watchlists.

Identomat’s integrated verification and AML screening solution

Identomat’s integrated AML screening solution provides the most accurate, reliable, and fastest results, enabling businesses to meet consumer expectations for a seamless onboarding process, all while meeting compliance regulations and saving resources.

This partnership encourages:

Seamless onboarding

Improved compliance process

Ease of integration

Global coverage

Flexible coverage

Trial access

In conclusion

This collaboration enables Identomat to access Castellum.AI's extensive library of high-quality and always up-to-date risk data which will assist in augmenting AML screening and monitoring capabilities to new heights

With this partnership, more organizations globally can automate their customer verification and regulatory compliance pipelines and/or equip their compliance officers with powerful tools for making more informed decisions about who to grant access to their services.

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For many, the holiday season is defined by time spent with loved ones, goodwill, and giving.

As retailers rollout their holiday sales,  nefarious actors look forward to snaring thousands of online shoppers with bogus sites, fake social media campaigns, and emails impersonating real brands. These "spoofing" sites and fake messages are designed to entice consumers to spend money on products that they will never receive. These actors are also apt to find victims through other means, including charity and travel scams.

Non-payment or non-delivery scams cost people more than $0 million in 2021 (IC3 report)

Tips  for  Shoppers  to  Prevent  Theft  and  Fraud  

1. be alert
   don't click on any suspicious links or attachments in emails, or on websites and social media. These links compromise your information, such as your name, password, and bank account number. This includes requests from companies asking you to update your account. Additionally, you may unknowingly download harmful malware to your device by clicking on these corrupted links.
2. Verify who you're buying from  
   For each site you plan to order from or donate toward, check to see that the URL is secure and genuine. Optimize a website reputation check, such as URLVOID. Do research and check to see if there are reviews available, avoid businesses or charities with no ratings at all. If you are really wary of a website, look up a business phone number and call them.
3. Be careful with how you pay
   Use a credit card while shopping online and regularly check your bank statements for suspicious activities. Remember to NEVER wire money directly to a seller. Verify the charge with the intended recipient, verify that email address are valid. We also advise against using pre-paid gift cards to purchase items as well.
4. Monitor the shipping process
   Once you make a purchase, always record the tracking number so you can track the delivery process. Learn to identity the red flags and remain vigilant during the season of giving, let's examine the number of creative ways that criminals are manipulating buyers and sellers worldwide.

Business and email compromise

Business email compromise (BEC) and email account compromise (EAC) are elaborate scams aimed at businesses and individuals performing money transfers. While the scams used to involve simple hacking, it has evolved into a much more sophisticated scheme, compromising legitimate business email accounts through tech intrusion techniques to perform unauthorized transfers of funds.

In the past, actors had simply spoofed business accounts. Now fraudsters are optimizing virtual meetings to hack emails and will act as business leaders to instigate fraudulent wire transfers. Often these wire transfers are converted into crypto wallets and are ultimately deposited into anonymous crypto wallets, making tracing extremely difficult for authorities.

Ransomware

Ransomware is an invasive software, or malware, that encrypts unwanted data on a computer, making it unusable. Cyber criminals will withhold the data until a handsome ransom is paid. If the ransom is not paid, the victim’s data remains untouchable.  

$0M lost in 2021, with 3,729 complaints identified with ransomware documented by the IC3

These criminals are willing to go through great efforts to pressure and intimidate victims into paying their fee, and will threaten to destroy the sensitive data or to release it to the public.

Steps  to  take  against  Ransomware  

                        1.  Update your operating system and software                    

Having an outdated operating system puts you at risk not only for business disruptions and system failure, but prime for a cyber attack or security breach as well. Think of it as leaving your back door unlocked. Keep your system safe by regularly updating and upgrading.

                        2.  User training                    

Train your staff to properly identity, avoid, and respond to the signs of a ransomware attack. Even the most sophisticated networks could be vulnerable to an attack if an untrained eye clicks a suspicious link or mistakenly opens an infected attachment. Make it easier for your employees to do the right thing rather than make a mistake.

                        3.  Have an offline backup of your data                    

Back up your data early and often. It is your best line of defense against ransomware attacks. Organizations and individuals who have sufficient offline backup can restore their data and operations without paying the ransom money. However, it is crucial to understand that backups alone don’t ease the restoration process or mitigate extortion tactics. The best solution is to prevent the initial breach.

Tech support fraud

This holiday season, fraudsters will be posing as customer, security, or technical support roles with well-known tech companies, with the intent to defraud individuals.

Victims are deceived by these bad actors into giving away their valuable personal information, and many report being instructed to make wire transfers to overseas accounts or to purchase large amounts of prepaid cards.

Most victims of tech fraud, almost 0%, report to be over 60 years old

The elderly are notoriously targeted by these criminals and they experience at least 68% of the total losses of tech fraud costs (almost $238 million). You can report any fraud targeting older people to the Federal Trade Commission online or at 877-382-4357.

Confidence fraud and romantic scams

These are scams aimed to "tug at one's heartstrings," taking advantage of people's emotions, only to ultimately empty their pockets.

0 victim reports collected by the IC3 in 2021

Con artists are prevalent on most dating and social media channels, adopting an identity to prey on victims, hoping to gain affection and trust. Last year, thousands of reports were taken by the IC3, who received thousands of complaints from victims of online relationships resulting in sextortion or investment scams.

These charming, persuasive con artists weasel their way into people's lives quickly and effectively. These scams are time-tested and heavily-scripted, with the intent to establish a romantic relationship as quickly as possible. There may even be a marriage proposal and plans made to meet in person, but that will never happen. However, eventually, these actors will ask for money.

More than $0 million in losses to confidence/romance scams in 2021

Grandparents also fall into this category. Grandparent scams are when criminals impersonate a panicked loved one and claim to be in trouble, pleading for money immediately. These actors are knowledgable, obtaining pieces of information from the social media accounts of family members, using details as leverage.

Charity fraud schemes seek out donations for organizations that do little or no work, instead the funds are transferred to the fake charity's creator. While these scams could happen at any time during the year, folks tend to be most charitable during the holiday season, and scammers are looking to take advantage of people's goodwill.

To check the validity of a charity, check out  organization CharityWatch or follow the advice provided by the Federal Trade Commission.  

Cryptocurrency

Among the 2021 complaints received by the IC3, ransomware, business e-mail compromise (BEC) schemes, and the criminal use of cryptocurrency where the top incidents reported. In fact, con artists had a landmark year, the IC3 received a record number of 847,376 complaints.

0 complaints recorded involving cryptocurrency (IC3 report)

While that number showed a decrease from 2020’s crypto victim count (35,229), the loss amount reported in IC3 complaints increased nearly seven-fold, from 2020’s reported amount of $246,212,432, to total reported losses in 2021 of more than $1.6 billion.

Record losses exceeding $0 billion, a 7% increase from 2020 (IC3 report)

Global cybercrime costs are expected to grow by 0% per year over the next five years

The most proactive solution against this overwhelming threat is to prevent an attack in the first place. Identomat's AI-generated end-to-end verification solution has helped a number of businesses upscale their KYC and AML routine and helped them achieve success.

If something is too good to be true, it likely is.

The holiday season is not only a hectic time for your business, but it is a bustling time for cybercriminals too. Cyber incidents are absolutely crimes deserving of an investigation, leading to judicial repercussions for the perpetrators who commit them. When in doubt, remember the golden rule of the Internet...

Want to speak with our fraud prevention experts?

Get In Touch

As a banking operative, you have the reputation of helping individuals and families establish and meet their financial goals.

Whether it’s assisting a college-bound student with their first savings account, helping a young couple invest safely in their starter home, or supporting a recent retiree as they plan the tropical vacation of their dreams, the accessibility of your bank’s services directly impacts your company’s reputation. While you want to preserve the stellar interpersonal banking experience that you’ve upheld for years, you should also consider how your client base and their unique needs are evolving, by introducing KYC banking. As tech-natives are becoming a larger part of your clientele, they are used to consuming information digitally through their computer and mobile devices. They want to work in a way that works for them, including their banking-- that's why you need a powerful AI-powered eKYC / AML solution.

Banking should be a frictionless experience for your customers.

Deloitte found that 43% of Gen Z’ers and 30% of Millennials are working multiple jobs to make ends meet, living paycheck-to-paycheck to compensate for increasing expenses and low wages.Customers take notice when their time is being valued, and they will be more inclined to embrace eKYC processes that save them time and that are simple to use. Identomat's AI-powered ID verification solution improves the activation process for your customers, saving them the trouble of collecting documents and registering in person, and effectively onboarding them remotely in mere minutes while providing trustworthy results. Most importantly, you can utilize other features of our remote solution while still preserving a sense of community, no matter the size of your institution.Expanding your digital presence means opening up to a global market while investing in the business health right in your local community.

Share of Loans by Community Banks 

77%

Agriculture Loans

50%

Small Business Loans

Don’t underestimate your power: a Harvard Kennedy School study found that community banks provide 77% of agricultural loans and over 50% of small business loans. 

With so muchpersonal information being easily accessible online, KYC and AML regulations are becoming even more prevalent and overarching.Your bank needs to verify the identities of your customers while improving the user experience, and you can greatly benefit from our eKYC and AML solution each and every day. By offering digital lending services, you can make an impact right in your own community, fueling the economy and growing small businesses like yours.

Our system detects a truthful client profile and can verify and onboard without complications, no matter where your customers are located.

Identomat's solution can do this all the while protecting you and your innocent clients from a breach. Offer your customers digital lending benefits with trusted remote identity checks, and you will be able to make safer, faster business decisions about commercial and investment banking loans. COVID-19 is to blame for a 238% increase in cyberattacks against banks, so with bad actors becoming more confident and efficient than ever, spoofing and identity fraud detection and aversion are vital.Identomat can help you become proactive in your response and block out an attack before it even infiltrates your systems.These looming threats directly affect your bank’s reputation, so it is important to prioritize privacy and never underestimate a bad actor’s skill set. Identomat can provide full identity proofing across the globe, anywhere at any time, and our system recognizes over 8,000 ID types from across 200+ different countries and territories. Understand the importance of KYC in the banking sector, you can’t afford to take the risk of being unprotected.

Cyberattacks can result in costly and, sometimes, irreparable damage and many institutions do not realize the severity of a breach until it is too late. Many businesses believe that they are too small to be affected by a cyber incident, but that is simply not true. In fact, small financial service firms are 300x more likely to be targeted than other companies, according to the Boston Consulting Firm. Forbes states that 35% of all data breaches impact the financial services industry. Investing in cyber security is necessary-- a breach can result in the theft of valuable, sensitive data, but it could end up costing your bank a lot more than that.

The National Small Business Association shows that the average cost of cyber attacks has risen significantly, from $8,699 in 2013 to $20,752 last year—an increase of almost 140 percent in just one year. 

Bad actors are not slowing down, and our services protect your notoriety and preserve your customer’s livelihood and dreams. Industry leaders trust Identomat’s fraud protection for detecting impostor attempts and suspicious accounts.Our system can be used for the verification process altogether or alongside verification experts, all while ensuring seamless KYC and AML compliance in banks.

You're selling, but do you know who you are selling to?

Our services can align with your business goals while providing an effortless onboarding experience for your customers whilekeeping them safe and satisfied.With Identomat, you can still play a role in the verification process by configuring our tools toward your industry-based KYC and AML needs.Don’t allow bots to break your bank. We can make digital-native customer account origination and recovery fast, safe, and reliable for your bank, no matter the size. Schedule a demo today to see how you could benefit from our AI-powered identity verification solution.

Identomat Can Help

Book a meeting to learn more about how to effectively onboard customers, stop fraud, and navigate compliance requirements worldwideRequest Demo

FinovateSpring is returning to San Francisco this coming May to reunite the Fintech community and plot a course for the future. The event brings together financial services professionals, investors and Fintech enthusiasts to spread awareness about new tech advancements in the financial field and try to build better, more sophisticated and accessible services.

Identomat offers a wide range of powerful solutions for streamlining KYC and ID verification process for businesses. Our cutting-edge AI-fuelled platform enables companies of any size safely and rapidly onboard customers, all while being compliant with regulations. As a growing startup that pocketed many achievements during the Covid pandemic in 2020-2021, including raising $3.2M, it is another milestone to demo our ever-evolving platform on a major stage in Silicon Valley.

'It is thrilling to be a part of the company at the cutting-edge of digital transformation revolution and showcasing our progress on such a massive stage. At Identomat, we are dedicated to enhancing and optimizing customer experience in Financial (and dozen other industries) services. While the opportunity to Demo our platform is an honour and pleasure, FinovateSpring is also a great place to connect, learn, grow and gain insights into the future of fintech. It is an incredibly exciting opportunity for all of us at Identomat and we're looking forward to the event.' - says David Lomiashvili, CEO.

'As the Fintech market is expanding and becoming more refined and complex, we are ramping up our resources to adjust to the market needs as quickly as possible. For instance, as the USA and its allies have been ramping up their sanctions on the Russian economy, the need for a somewhat regulated DeFi arose to block the entities or individuals trying to evade the imposed bans. Our system plays a major role in how these circumstances will play out, so it is a big responsibility to be as ready as we can be to take on the duty.' - says Zura Kotaria, COO of Identomat.

Why Finovate Spring?

Finovate Spring 2022 is a great chance to re-connect with the Fintech community and introduce our leaps in the identity verification technology space. It is exciting to showcase how Identomat has become a one-stop shop for all things KYC and how our milestones have propelled our company. Fostering digital transformation is one of Identomat's core missions, so to actually be a part of Finovate and demo for the room that thrives in this field, is an opportunity and an honour.

As the Russian aggression against Ukraine continues, USA and its European allies have been ramping up their sanctions on the Russian economy.

To force the Kremlin stop the war, these packages go beyond just sanctioning government operatives and oligarchs and are designed to cut-off the whole Russian population from the international financial system.

As the financial reality of most Russians is toughening daily, what are the chances of them using Cryptocurrency as the way out of this isolation?

After its invasion of Ukraine, Russia has been sanctioned by the majority of the international community. The aim of economic sanctions is to cut off the country from the global financial system to cause it to end the war and withdraw its military forces from Ukraine. The said sanctions involve removing SWIFT (interbank messaging system) access from Russian banks, prohibiting corporations from doing business with Russian figures and FI-s from the U.S. Sanctions list, etc.

Needless to say, the sanctions have caused the Ruble to plunge, most large multinational corporations have left the country,  and now the Russian business community is scrambling to keep themselves afloat in the financial world.

Based on these circumstances, many fear that Russians (especially the ones with significant resources) can use crypto as an escape route, , since it is not issued or controlled by a central bank entity.

According to Jesse Powell, CEO and co-founder of Kraken, they are not willing to halt crypto exchange for Russians, unless legally required to do so. The company is making sure that the sanctioned individuals don't fall through the cracks relying on the ultimate shield - screening policy of people who sign up for their services. Using global watchlists, transactions and users, from IP addresses that may belong to sanctioned individuals or entities, are blocked and barred from access to crypto exchange. 'cutting out a whole country, people, who may not be supporting the invasion, is not what our company stands for. We take cutting out people from, possibly, their last financial account very seriously. ', - states Kraken.

As the latest news goes, another big crypto exchange company, Coinbase will block 25 000 Crypto addresses, that are connected to the Russians or Russian organizations. After Russia's invasion of Ukraine, Coinbase has investigated addresses that directly or indirectly were akin to sanctioned Russian individuals or entities. As the representative of Coinbase has expressed 'sanctions and their fulfilment are crucial in preventing the aggressor, our company fully supports this decision of our government'.

As per US officials, they are unanimous about the idea of cryptocurrency not being a powerful escape route for the Russian state of sanctioned individuals. The main reason behind that is that Russia is a huge country with a $1.5 trillion GDP, frankly, there just aren't enough dollars in the crypto trading system to meet the needs of a country of Russia's size. Making it implausible that the Russian Federation could evade sanctions using crypto at the scale that would be needed unnoticed.

Though the idea and the fundamentals of Crypto - being decentralized and under no scrutiny of government entities - remains a dilemma. Washington, according to Crypto analysts and leaders, 'doesn't understand how heavily regulated and traceable Crypto already is' and additional centralization could create unnecessary obstacles. Yet, crypto companies assert that all sanctions will be fully met to whom they are imposed on.

To be more realistic, Coinbase and Kraken are one of the largest Crypto exchange companies and it would be easier for them, given their resources, to respond to sanctions accordingly. So, how shall small, new crypto startups operate? It would be challenging for them to be compliant with the imposed sanctions on Russia, all while concentrating their energy on ensuring not only AML, but also consumer protection, investor protection, market integrity and other important safeguards that can and should be applied to businesses who handle funds for people.

As a relatively new startup ourselves, we fully understand the challenges that are being faced. As much as we respect the concept of cryptocurrency, crypto communities and DeFi, we also stand by our strategic allies and as our duty goes, we want to extend our support and give a 3-month-free-of-charge trial access to Crypto startups who are trying to stay compliant and act with the frame of the US and EU sanctions.

Don't hesitate to reach out to our team for more details at info@identomat.com. 

2021 was an extraordinary year for Identomat – starting from numerous new partnerships, and finishing with attending the Money20/20 USA in Las Vegas. Though, the biggest news would be coming at the very beginning of 2022: Identomat and the team behind it raised $3.2 million in seed round, making history by raising the biggest sum as the Georgian-American startup.

We had hoped for the excitement and interest from our partners and the public, but what happened right after sharing these news, exceeded our expectations.

We sat down with Identomat co-founders – David Lomiashvili, CEO, Zurab Kotaria, COO and Rezo Imnadze, CTO – to discuss the inception of Identomat, the road to fundraising success, and what’s to come.

How was the idea to start Identomat born and what purpose does it serve?

DAVID – In 2019, while helping a large financial organization automate their manual credit approval process, we noticed that the biggest source of friction for their customers was identity verification and compliance data collection that were done manually and took up to a few days.

That’s when we realized that helping organizations enable their customers to access their services instantly and remotely was not only going help their bottom line and improve their business resiliency, but also allow them to acquire happier, more satisfied customers and grow their business even amidst the global pandemic.

How did Covid-19 Pandemic fuel the company’s growth since its’ inception?

REZO - When we had started, there was a  gap between our and customers’ sense of urgency. Although, as soon as the pandemic started, local (Georgian) companies reached out to us already knowing what they needed. Yes, Covid did help our cause become more common, but had there not been the health emergency, it was a matter of time that businesses would choose remote customer verification.  

ZURA - The pandemic had an immense impact on Identomat’s growth. Covid-19 just eliminated the need for convincing companies in the benefits of remote onboarding. The question for the businesses was not ‘why to use’ Identomat, but rather ‘how to’.

What was the biggest challenge for your team when it comes to meeting the needs of your customers?

REZO -There are always challenges (laughs). In a way, that's what makes this whole thing interesting. Globally speaking, the main difficulties arise when a partner operates in a region where a considerable portion of their customer base uses outdated, non-standard, identification documents. All of them are particular and need separate or extra elements to be fully analysed and processed. But, once we complete such custom partner/country onboarding, this nuisance actually becomes our competitive advantage. This was the case in Georgia, Ukraine, and several other European and CIS countries.

From the customer’s side, were there any specific needs/wants that you would have to add or work on?

ZURA - Good question. Actually, that is how we operate. There’s a very long wish list of what features we (and potential customers) would want/need to have. So, we are following that list and trying to improve, refine and better our platform. Usually, we prioritize which functions are in the highest demand from the customer side. Practically speaking, there have not been any features in the wish list that were not wanted by the consumer. This helps us to be in-sync with the market.

Identomat is a digital KYC and ID verification platform. It stands on the team of IT professionals. So, as a CTO and a leader of the IT team, what are the values that you instil in your co-workers?

REZO - Goal-oriented, efficient, productive. When facing a problem, not brushing it off saying that it’s impossible to fix – there’s no such thing for me. Also, cultural compatibility with our goals and the company means a lot. There have been instances, when someone would be skilled and talented but culture and values would not match up with us; or the other way round. We are looking for a package deal, all-while knowing that it's a two-way street.

What, do you think, is unique to Identomat that attracts customers?

ZURA - The biggest part is that the entire technology behind Identomat is proprietary. We don’t use third-party services or providers, which grants us with great flexibility in system deployment and process building. As well as commerciality-wise, Identomat is very resilient, which gives us an edge over other alike services. We also take pride in being ISO-27001 certified and GDPR compliant and we also hold the seal of approval from the State’s Inspector Service of Georgia on compliance with the Georgian Law on Data Protection.

What was, in your opinion, the key factor for investors to invest in your company and what was the biggest push-back?

DAVID - There were multiple factors that led to the successful raise. However, if I had to pick one question that we got asked the most, it is definitely - "How do you differ from the competition?".

From what I have seen, which granted, is based on a limited experience, it is usually harder for international founders to convince US-based investors to trust them with their money. And we were not the exception, even though all of the few dozen investor meetings we had were from inbound interest.
That's why we had to present a bulletproof case and that involved having found a product-market fit that led to a strong traction and growth momentum, having a massive addressable market with a lot of room to grow, showing that we have a team that can overcome challenges and deliver on a global scale, and that our technology can compete with anyone on the market.

How did attending international fintech events impact Identomat’s investability?

ZURA - Obviously, it impacted Identomat greatly. It grew the brand awareness as well as the receptiveness. We made sure that we were seen on the international platform, so the decision to attend conferences and exhibitions was a natural continuation. Identomat had to assert itself as THE KYC and identity verification platform so, I think participation in major events definitely accelerated the quality of being attractive and profitable to invest in.  

DAVID - Investors started noticing and reaching out to us right after our first public event when we competed in TC Disrupt Pitches & Pitchers in 2020. That was followed by a rapid growth of our customer base given a very positive word-of-mouth and numerous other conference and trade show appearances. I would especially emphasize exhibiting at the largest fintech show in the world, Money20/20. Announcing our strategic data partnership with Equifax and getting selected as a finalist in NXTSTAGE competition were also big catalysts for investor interest.

Once there was this inbound interest from investors, then all we needed to do was to make our case clearly. This is where "the packaging" matters. Putting together a killer pitch deck and an exhaustive and sensible financial model is not only important for pitching but also for the investors to see that you know the ins and outs of your business both from the financial as well as marketing/PR perspective. Luckily, all of us had extensive experience in this from our previous ventures.

What are the plans for the future of your company?

REZO - Thanks to the funding, it’s going to become possible to expand our coverage across all industry verticals and organization types. We would love to see our platform as the go-to KYC and Identity Verification service. There’s still a gap, I think, between market needs and accessibility of services, so if we could fill that gap, it would be amazing.

ZURA - Expansion, expansion and expansion on the global market. Acting on and answering to the market needs, even further simplifying the verification process, despite taking only several seconds now. I would also want to emphasize that our minds are set on helping out startups that are in need of custom KYC and ID verification service. Identomat is accessible to all types of industries and our team is up to any challenge should it arise. Speaking of our team, we are currently working on a unique verification flow, that we are planning to obtain a patent for. So, this will be one of our biggest focus for this year.

DAVID - This funding allows us to put in motion our longer-term strategy and develop new strategic partnerships to grow market share in the US, Europe, and Central Asia, and enter into Latin America, and Middle East. We will also be putting a substantial amount of effort and resources into hiring new talent. Only by nurturing and growing our already amazing team, can we achieve our mission of making digital identity proofing as ubiquitous and effortless as online payments.

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We would like to thank everyone for sharing our success and the continued support. This is a great encouragement for our entire team to keep pushing for more. Identomat will stay true to its values and continue hard work towards providing seamless, easy and, most of all, safe service to its clients.

Money 2020 in Las Vegas this past October was one of the largest live events that has happened since the beginning of the pandemic. Thousands of attendees had the opportunity to interact and connect with potential clients and strategic partners. Hear directly from the industry thought leaders and learn about new experiences of major companies and present their own start-ups at the exhibition. 

The event ran from October 24th-27th alongside panels, discussions and plenty of networking opportunities. 

So, what does it take for a first-time exhibitor start-up to make a splash at one of the biggest Fintech trade shows in the World? This piece covers the do’s and don’ts of preparation, what worked better at the actual event, and finally... would we recommend it as a must-do fintech show? 

Let’s dive in!

Missed Marks 

Making a decision to participate in a large-scale event in the US is not easy.

However, the actual preparation, thinking through all the details and trying to be perfectly ready for everything is a mammoth task of its own. Hence, do start planning months ahead. As soon as the idea to take part in the event arises, begin arranging or estimating what you, as a company, might need. For instance, in our case, we didn’t have enough time to order some of the merch since it would take a longer time to prepare. 

Therefore, be ready for things to go wrong. Even during the actual event. 

‘The exhibition seems like a live organism that moves in its own direction and tune. So, don’t be surprised if something goes awry. In our case, we had our dedicated power line not working in the morning on two occasions, but upon being notified the staff reacted promptly and fixed the problem. So, I’d have the contact information handy.’ – Says Identomat’s CEO, David Lomiashvili.

As mentioned, the event is a great opportunity for making new, meaningful business-connections. To help the networking process, the Money 20/20 team did a great job designing and implementing much needed meeting arrangement and scheduling features into their app. Nonetheless, one shouldn’t fully rely on dedicated event apps, given that for some people it’s not easy to adapt to new tools and user experience so quickly, especially in such a fast-paced environment as Money 20/20. It’s also easy to miss the meeting reminder notifications, while some   folks choose to just cancel the meeting right before or not show up at all. Make sure to salvage your connections during panels, live meet-ups at stands, after-parties and other junctions. Don’t forget to replicate them to an outside medium like LinkedIn, e-mail, etc.  

Panel talks are very appealing to attend and it can be extremely tempting to go to as many as one can. However, be aware that if you’re exhibiting, it will take a lot of time from your plans and wants. Instead, prioritize the talks that you really want or need to attend, that would be useful for your future business prospects and make time for them.  

Keys to Success 

Make sure to choose your merchandise wisely. Make it relevant. 

'For us, the obvious choice were the masks, since the pandemic was still raging and let’s be honest, many people forget to bring one of their own.’ – Says David Lomiashvili.

It’s great to have a well thought-through plan of how to stand out at the event. Videos are generally a great tool that catch many eyes. So, as a business presenting at an exhibition, likely with better funded competitors with shinier booths, it’s only logical that you’re hunting for as many eyeballs as you can.  Do as much as possible to be distinct – one of them is having a quality video demo about your company. 

Alongside merchandise, don’t forget about printed goods, like business cards and brochures. People are not keen to walk around a huge exhibition and collect papers to then carry around, it’s uncomfortable. We’re in the digital age. Consider using small promo cards with QR codes as links to your digital promo sheets, landing pages etc.

Networking at the event and building a relevant base for future prospects is one of the reasons why attending Money 20/20 is so appealing. Some of the most interesting conversations, surprisingly enough, happen when you least expect it. From our experience, it was at the topical private parties. Make sure to go to as many as possible – it’s likely that you will get invited to some by your existing connections, but put effort in seeking some out yourself. 

Now, as for your social media. Planning out your SM strategy is a great idea – diversify your posts throughout the event, be proactive and reactive. Prioritize the platform that has the biggest concentration of your target audience, this way you will get better reach and coverage. Keep in mind that candid photos from the event floor (e.g. behind the scenes) trigger great engagement and reach. 

Don’t forget to brainstorm relevant hashtags, after all it’s the tool to keep your posts easily-seen and identifiable. For more excitement or buzz, it’s great if you can come up with a ‘merged’ hashtag of your company and the event that you’re attending or presenting at. 

“Hunting for eyeballs” probably applies to social media even more so than to the real world these days. So, our marketing team came up with an unusual tactic to showcase our technological concept and the event branding while tapping an underutilized channel - they created a custom, interactive filter for Instagram and Facebook Messenger. Filter allowed users to record a short video reel of themselves being (pretend) biometrically scanned for liveness (assessment of human/non-human). Unfortunately, we published it kind of last minute, so it didn’t have enough time to garner the momentum needed for any level of virality. But creating a custom filter is something not many teams can ideate let alone deliver. So, we’ll put this one down as a viable tactic that needs to be timed better next time. 

‘...creating a custom Filter is something not many teams can ideate let alone deliver.’ – David Lomiashvili

Keep in Mind

While it is easy to get caught up in the event-planning details and preparations for the company, take into account Visa paperwork if you’re traveling. It takes time to collect all of the documentation and arrange the US visa appointment at the consulate. The bureaucracy can be extremely frustrating and time-consuming. 

‘We always planned on going to Money 20/20 with all 3 of us co-founders, but as usual, the bureaucracy intervened. Our CTO, Rezo Imnadze, couldn’t get a US Visa appointment because the consulate was backed up until 2023.’ – states Identomat’s CEO, David Lomiashvili. 

At the end of the day, in business, it’s all about the ROI. So, the big question is: was Money 20/20 USA 2021 a good investment for Identomat? Well, given that we’re already looking forward to next year’s event, the answer is not that hard to guess. 

Collectively,  Money 20/20 USA was an amazing avenue for brand visibility, direct outreach, market research, and competitor analysis. It was also a great learning experience. We are glad that we decided to sponsor a large-scale exhibition, networked with meaningful businesses, and  fostered  strong connections. 

And last but not least, the Identomat team would like to thank the Money 20/20 USA organizers for implementing detailed COVID-19 health and safety guidelines and attendees for upholding them to keep an event of this proportions feel safe and comfortable to attend during an ongoing health crisis. 

If you sit back and really think about the impact of last year, the acceleration of financial and health services has been the two areas that really took off in response to Covid-19 pandemic. Identomat has been gathering momentum by expanding the horizons of easy and accessible online identity verification and KYC and has been waiting for a chance  to be introduced on a bigger platform.

So, without further ado, we are happy to announce that Identomat will be exhibiting at  one of the most prominent Fintech events of all – Money 20/20.

About Money 20/20

For years the event has been described as ‘where money meets technology’, highlighting the point of financial institutions and financial technologies intertwining. In other words, Money 20/20 is the place to be if you’re willing to be the part of the community who will make decisions that shape the future.

Money 20/20 was founded in 2012 by Payments and Fintech veterans from Google, TSYS and Citi. Considering that traditional business conferences were spiritless and unexciting, they brought to the table a new, fresh and unparalleled experience ‘built for the industry, by the industry’.

The event has hosted C-level executives, acclaimed speakers and innovators from across the world who have been in the drivers’ seat of altering the future of money. The 4-day long event in Las Vegas, Nevada has connected the right people, who had the right conversations and made right discoveries enabling start-ups, individuals and organizations to grow, thrive and achieve their goals.

Identomat’s approach

It is very exciting to be living in the era of digital transformation. As a fintech start-up, Identomat team realises the significance of attending Money 20/20 event and meeting service providers who share the value of security, fraud prevention and safe money transfer practice. The event offers more than a high-level view of the global financial industry – its networking and in-depth insights carry immense value. According to the Money 20/20 report, the prior ‘wave’ of financial technology aimed its attention on the digital distribution of existing products and services, but nowadays, it seems like the industry is shifting towards ‘digitally native financial services’.  

As a start-up established only a couple of years ago, Identomat has been lobbying for the normalization of digital-only services across most industries. In fact, our team members have taken part in several conferences covering the topics of the digital onboarding toolset for the insurance industry, future of digital lending, and how customer onboarding should be the new normal via digitizing services. 

“The great thing about Money 20/20 is that financial world shapers are all at one place at the same time. Needless to say, it is an amazing opportunity to showcase our cutting-edge identity verification solution to the leading financial organizations and be seen side-by-side with our biggest competitors. This is one of the few places where getting to speak directly to the potential customers is not about who has the biggest enterprise sales team, but rather about who can deliver the most value for the customer. And it’s already clear that the Money 20/20 team has done an amazing job organizing digital pre-event and in-person on-site networking channels.  It is another great milestone for Identomat and we’re looking forward to the opportunities the event will present. There are only a few relevant large-scale fintech conferences in the world and Money 20/20 is definitely one of them and the place to be.’ – says Identomat’s CEO, David Lomiashvili.

The Identomat team is thrilled to share mutual goals on such a worldwide platform and go back home richer with more information and like-minded connections. 

Do you wish to connect with us and gain knowledge about fast-developing best practices in identity verification and KYC in post-pandemic industries? Swing by our booth K1923 at The Venetian Resort in Las Vegas., anytime between October 25-27. Follow the link below for details about Identomat’s booth and more:  

UAINSUR.TECH DAY - Eastern Europe’s premier event of the year in the field of insurance innovation was held on June 30th and Identomat’s COO, Zurab Kotaria was invited to present about the subject of digital customer onboarding in the insurance industry.

UAINSUR.TECH DAY is the window into the industry’s most influential views that shape the future of insurance transformation and InsurTech’s direction. Covid has forced almost all sectors of business and the economy to swiftly change and adapt to the new reality. By accepting the inevitability of implementing the latest digital solutions and working with digital channels, insurance companies are able to expand their customer base, generate new sources of income, and offer innovative products. 

Zurab’s speech began by highlighting how the global insurtech industry has developed through the years, making it easier for the public to access it and for businesses to provide it. 

Before diving into separate topics, Zurab reviewed the process of customer journey upon receiving an insurance policy: onboarding, data collection & input, risk assessment & categorization, insurance score-based pricing and policy purchase; 

‘ Each of these components can be automated or digitized, including even the claim processing and insurance history/score update. As a result, these services are provided remotely, making them less time-consuming. ’ 

Online insurance tools can be divided into three main categories: 

• ID verification and KYC
• Customer scoring and risk-based pricing
• Claims processing and policy maintenance. 

What is KYC and why do companies subject their customers to identity proofing? 

The main reason behind it is fraud prevention: businesses must make sure that customers are truly who they say they are online. For example, how Identomat approaches KYC is, it asks the user to take a selfie, take a photo of their ID and within seconds (thanks to cutting-edge Artificial Intelligence) they receive a yes/no answer and are safely onboarded with access to their desired goods. 

The second component, customer scoring and risk-based pricing, has several inner layers: health insurance, life insurance and auto insurance being three in the highest demand. In its core, insurance score factors cover credit rating, health history, driving and criminal records etc. and based on these, risk category, policy options and pricing are determined. 

Last but not least, claims processing and policy maintenance, naturally, occurs after an insurance case (life event). In order to avoid piling up endless documents, receipts, reports etc. document OCR and Data API integrations make these processes extremely quick and analytically precise. As for the claim processing, for the majority of cases, it can be done through visual analysis using AI. For example, vehicle damage assessments and property value estimations can be self-initiated and completed within the provider’s app, using a common mobile phone camera and sophisticated machine learning algorithms. 

‘Claim processing can be fully automated or use the human-in-the-loop workflow -  for especially high-value cases, appraisers will be able to double check and avoid potential error.‘

So, what should insurance businesses' DX (Digital Transformation) toolset look like? First and foremost, a robust DX toolset should enable and amplify digital, remote and automated business activities. Furthermore, it should have flexibility to customize, provide modular architecture and adaptable pricing policy, good back-office dashboard to manage customer cases, have access for all major platforms like iOS, web, Android etc. 

How do insurance providers benefit from Digital Onboarding Toolsets? 

According to Zurab, insurance providers who go through digital transformation attain a far more transparent and faster decision-making model. This leads to accelerated customer onboarding and policy sales. Thanks to digital channels, target markets are vastly expanded. Due to fast and reliable service, customer satisfaction is higher and brand image improves proportionally. With AI based scoring, businesses are enabled to predict and mitigate losses deriving from risk exposure. 

Another side of the coin, and what makes digital toolset so striking and attractive, is that customers have a lot to gain too. They avoid long lines and waiting time is cut to virtually seconds, no need to collect stacks of paper documents and most importantly - instant claims and processing are widely available. 

What obstacles are there to overcome? 

Lack of trust in digital platforms remains one of the main challenges for the public. Understandably, in the age of frequent ransomware cyberattacks and corporate data leaks, trusting companies with personal information is not the easiest pill to swallow.  

On the government's side, the regulatory base is very dated in most parts of the world and needs refurbishment to be in line with the newest industry standards. And when it comes to companies, unwillingness to change organizational processes and the needed effort for workforce participation come to play a huge role in modernizing and streamlining business processes. 

As the market leader in up and coming Georgian insurance business, the biggest insurance company Aldagi has adopted Identomat to safely onboard customers remotely. The company was one of the first in Georgia to move to digital onboarding when Covid-19 first hit the country. Since then, other businesses followed in its footsteps - expanding Identomat’s partner network. Soon after, Identomat was officially approved by local and international regulators, such as National Bank of Georgia ; Recognized as compliant with the Georgian Law on Data Protection, GDPR (General Data Protection Regulation) and ISO-27001 certified. 
If you wish to learn more or have any questions regarding Identomat, our KYC modules, or pricing, don’t hesitate to reach out to our team by visiting our website: https://identomat-329a23.ingress-baronn.ewp.live/

The Open Web Application Security Project (OWASP) Tbilisi was held on June 10th and Identomat’s CTO, Rezo Imnadze presented his insightful take on customer onboarding in the Digital Age. 

OWASP works to improve the security of software through its community-led open source software projects by hosting local and global conferences as well as through many other resources. Identomat was invited to present at such a platform to highlight the importance of Know-Your-Customer and Anti-Money Laundering processes. 

The presentation began with the explanation of KYC and Identification and how it helps secure businesses from financial fraud through Identomat’s example. Before delving into how KYC has changed the client onboarding process, Rezo focused on prior KYC tendencies and the associated challenges, such as long queues at service branches, the need of gathering many documents etc.

‘ The interesting thing with digitizing services is that not only does it give an edge to companies, but also makes it easier for customers to access services without leaving the comfort of their home and saving funds. ‘

As for businesses, they are able to better secure their data, have a digital footprint of all actions in their workflow and also cut their expenses all while accelerating processes. 

So What Is KYC And How Does It Work?

Unfortunately, online fraud has been growing these past years and criminals are getting more and more creative with their techniques. What KYC does is that it  ensures that the person is truly who they say they are by using the latest AI technologies. For example, Identomat identifies hoaxes, such as corrected MRZ and papers, printed documents, other people’s documents shown through the screen. But since this is just one part of compliance, biometric parameters need to be taken into consideration as well. Therefore, masks, recorded videos, photos and other techniques are easily detectable by AI. 

Organizations need a reliable way to determine that the user is indeed who they claim to be online. To take our system for an example:

• The user is asked to take a photo of their ID
• A photo of themselves (selfie)
• The software checks the ID validity, cross-checks watchlists, performs liveness or similarity checks 
• If all the information matches, the customer is safely onboarded 

To ensure that the AI system does not go over the line, certain laws and regulations are in effect. GDPR (General Law on Data Protection) is one of them. Being GDPR compliant means that you, as a business, are required to protect the processed personal data and privacy. Another similar safety measure  is the ISO-27001 certificate that allows companies to demonstrate to regulatory authorities and the public that collected information is fully secure and adequate tools are in effect to address possible risks. Identomat is proudly ISO-27001 certified and GDPR compliant  and has the seal of approval from the State’s Inspector Service of Georgia on compliance with the Georgian Law on Data Protection. 

What challenges is KYC facing? 

According to Rezo Imandze, the main difficulty is distrust from the public’s side in digital services. Another major topic is the inaction from companies to change organizational practices. Though, the process was kickstarted by the pandemic and the need for business to adapt to the new reality in order to stay afloat. 

‘Overall, the greatest wall that we have to overcome is the public’s perception. The market size is huge, so we really need to tap into the unsalvaged territories that will truly make customer onboarding much safer.’

If you wish to watch the full OWASP Tbilisi 2021 meeting in Georgian, visit this link. 
If you have any questions about Identomat, our services or pricing don’t hesitate to reach out to our team by visiting our website: https://identomat-329a23.ingress-baronn.ewp.live/