Blog and Resources

Artificial Intelligence (AI) is one of those things that everyone recognizes as a name, but very few people seem to really know what it does. 

It’s something to do with smart robots, thinking for themselves that if we’re not careful enough, could turn into a Terminator sequel, right? Wrong. 

Don’t laugh just yet as misconceptions about artificial intelligence go well beyond The Terminator parallel universe. They are nothing more than a product of misinformation about this generational breed of technology.

Today, we’ll address 4 popular myths and give you the cold hard facts about what is true, and what is pure fiction. Let’s begin.

AI Myth #1: Artificial Intelligence is For NASA, Tesla & MIT 

AI sounds something out of a space movie and it comes as no surprise that most people think of it as untouchable, as something only the few can access and use. 

That couldn’t be further from the truth, as AI has come a long way since its inception, slowly yet steadily becoming a commercial product. Today, AI is found in everyday business tools that can transform your brand. 

Here are a few examples: 

• Conversica - with its army of Intelligent Virtual Assistants, Conversica helps organizations drive and convert customers at scale. The software can engage with leads, schedule meetings, and turn them into paying customers
  
  
• x.ai - your personal scheduling done right. x.ai is integrated to your calendar and emails and takes over the scheduling of your life without your involvement.
  
  
• Recorded Future - this is one of the best cybersecurity products on the market. Recorded Future provides real-time tracking, and analysis of massive data sets to detect potential threats and breaches of information.
  
  
• Identomat - with KYC being as dynamic of an industry as it is, Identomat has managed to streamline the onboarding process, building a solution that adapts and serves businesses of all industries and sizes. 

AI Myth #2: Artificial Intelligence Will Replace People in The Workplace

One of the most common misconceptions about AI is that it will end up taking away jobs from people. 

Once again, this is normal as AI does a lot of things that were traditionally performed manually. The truth is that AI will not steal jobs. On the contrary, it will create jobs. 

According to the World Economic Forum’s (WEF) 2018 Future of Jobs report, AI will be responsible for 133 million new jobs by 2022. 

The generational nature of AI technology means that job roles will evolve, not be abolished. People will have to adapt their skill-set and take on more decision-making positions. AI is not an enemy, but a friend. 

AI Myth #3: Artificial Intelligence Operates Autonomously

We’re back to the whole “machines taking over the world” argument. Don’t sweat it just yet. 

There’s a big difference between automation and completely autonomous machines. AI is great at making sense of large data sets, personalizing them to the user’s habits, and providing a seamless, faster, smarter user experience. 

When it comes to matters of critical importance such as healthcare and the military, the human element is still essential. Going back to the previous point, AI is creating jobs for people to create, operate, and interpret it. 

The whole idea behind the technology is predicated on the notion that a human will be at the tail-end of the process to make sense of the data and have the last say. 

IBM’s Senior Vice President for Watson and Cloud, David Kenny, stated the following in IBM’s Open Letter to Congress on Artificial Intelligence: “Critical decisions require human judgment, morals, and intuition—AI does not change that.”

AI Myth #4: Artificial Intelligence is a Digital Version of The Human Brain

This is a very inaccurate positioning of AI’s nature and capabilities. This misconception stems from the fact that we have frequently used the words “learn” and “think” in our descriptions about the technology.

That is a very free-form way of explaining the complex workings of artificial intelligence but it’s essential to understand the things that separate it from the human brain. 

Thankfully, a recent paper in Minds and Machines by David Watson of the Oxford Internet Institute and the Alan Turing Institute comes to the rescue. The paper goes into detail, analyzing the major differences in the level of understanding and perception between AI and the human brain. 

Here’s a quote by Watson that summarizes the essence of the paper: 

“Algorithms are not ‘just like us’... by anthropomorphizing a statistical model, we implicitly grant it a degree of agency that not only overstates its true abilities but robs us of our own autonomy... It is always humans who choose whether or not to abdicate this authority, to empower some piece of technology to intervene on our behalf. It would be a mistake to presume that this transfer of authority involves a simultaneous absolution of responsibility. It does not.”

Conclusion 

AI is no longer the future, it’s the present. It has infiltrated almost every single industry and it’s an essential cog of the business world. 

As it becomes more and more prominent it’s good to start familiarizing ourselves with what AI is, what it can do, and how it can ultimately help our business. 

Knowledge is power and debunking these myths is not just cool for a watercooler convo but the beginning of an exploration journey regarding AI. Our team here at Identomat are always ready and available to answer any questions you might have on the subject of AI.

Feel free to contact us. 

Online KYC has come a long way - from sending printed paper proof that was manually examined, we have reached a point where KYC onboarding happens in a matter of few clicks using the camera of your phone, pictures, and videos. Whilst this has been a brilliant first step for online KYC, it’s proving to have its shortcomings. 

The Problem

Passive liveness checks have been popular amongst online businesses as they have significantly reduced operational costs, abandonment rates, and onboarding time. Where’s the problem, you might ask? Online fraudsters and scammers have targeted the new technology and they have slowly yet steadily picked it apart. 

For the most part, liveness technology is structured around 2D projections that analyze images as flat. Whilst that type of tech can still detect movement, it can’t scan and process for depth and micromotions.

That immediately opens the door to several copycat techniques that are used to bypass the test: masks, printed images, pre-recorded videos, and avatars. What’s the solution? An active liveness check. 

Active Liveness Check

Active liveness detection mechanisms require the user to follow a more demanding process. These mechanisms usually consist of mirroring a certain movement on camera, smiling tilting your head, or replicating a gesture with your hand. 

Implementing these mechanisms has proven to be bittersweet for companies. On one hand, there’s no doubt that they raise the bar and quality of the identity verification process. On the other hand, they impede the speed and efficacy of the onboarding process, increasing abandonment rates. 

ID R&D’s whitepaper titled “The Important Role Of Liveness Detection In Face Biometric Authentication”, companies report abandonment rates as high as 50% for active liveness. The difficulty for companies does not stop there. 

Companies have to also consider the industry standard and regulation. The ISO/IEC 30107-3:2017 dealing with information technology — biometric presentation attack detection — testing and reporting, has been coined as tough and challenging to pass. The ISO/IEC 30107-3:2017 is not the only benchmark around.

The NIST contest known as FRVT 1:1 is one of the most reputable and credible benchmarks in the biometric and face recognition industries. Being ranked in their database is a hefty goal for companies, making the conundrum between quality onboarding and commercial success even tougher to crack. 

Where Do Liveness Checks Go From Here?

As you might have realized, there are two camps in the liveness check world: the commercial side and the technology side. From a commercial standpoint, companies want onboarding to be fast, easy, and user-friendly, converting customers. 

The technology side of the equation is a bit more cynical, focusing on the security of information, trying to make the onboarding process as robust and bullet-proof as possible. In an ideal scenario, a provider should be able to combine the best of both worlds and give you a mixture of passive and active liveness checks for optimal security and user experience. 

For more information on our technology, feel free to contact a member of our team. 

In the current times of uncertainty, not many would take the risk of starting a new business or expanding their existing venture. Covid-19 has hampered growth for many ventures, replacing potential with uncertainty. Yet, in some areas, the old adage that crisis equals opportunity has been proven to be true once again. The country of Georgia is one such example. 

If one goes over the statistics of how the pandemic had been handled by East European and Caucasus Region countries, it is clear that Georgia has been on top of the game. With one of the lowest infection rates in the Caucasus and Central Asia, the country has been praised by the Asian Development Bank and others for its early actions to combat the virus.

As businesses start to reopen, many research companies have begun studying the post-Covid countries and the likelihood of life going back to normal, the pace and how the tourism and business are going to recover. What may come as a surprise to some, Georgia has been named twice in such rankings Firstly, Tbilisi and Batumi as the Safest European destinations of 2020 (ranking 1^st and 7^th accordingly), according to Forbes.

The second mention concerns the potential of Georgia. Emerging Europe, a powerful news hub focused on social, economic, political and cultural issues of the Central and Eastern European region, has featured Tbilisi as the Number 1 in the Economic Potential category among 75 European cities . Highlighting the region’s innovation news, sustainability, challenges, opportunities and noteworthy projects, Emerging Europe is an online business-oriented hub of news to watch for, and the leading ranking of Georgia’s capital, based on a number of indicators, is quite an honour.

This title adds to the previous ranking carried out by the World Bank in 2019, naming Georgia the 7^th among 190 countries in the Ease of Doing Business.

Georgia has always been focused on improving and modernizing existing services to simplify the day-to-day, mundane processes for its citizens and businesses. And honestly, the country has been continuously thriving in this area. For instance, Identomat, an AI-based KYC and AML platform that helps businesses onboard their customers in a fraction of time. 

Simplifying customer experience has always been the focal point for any company. Take Aldagi, the leading Georgian insurance company. Aldagi has fully adopted Identomat’s AI technology and now, thanks to it, customers can renew their insurance agreement without the need of going to the branch office. These processes and multiple similar examples are the proof that innovation and modernization is the driving force of progress, which cannot be stopped even by the global pandemic. 

Since around the world, technology and financial business have merged and become Fintech, Georgia has quickly adapted the trend and showcased the readiness to become a reliable partner and a leader among the best. Being named Number 1 in the Economic Potential Category gives Tbilisi the recognition and acknowledged in this and many other fields, promising further growth and potential for Georgia and its capital.

Did you know that 40% of customers drop out during the onboarding process? The statistics are staggering, but we would be lying if we say we weren’t expecting it. To put it lightly, identity verification is a hassle for most people — providing ID documents, taking selfies and photos that are often declined. You would hardly call this a fun activity. The lack of clear directions and overall bumpy user experience create a frustrating procedure that almost half the people that go through it, decide to quit.

Could you, as a business, avoid the identity verification step of the onboarding process and immediately see your conversion rates skyrocket? Sure, if you are willing to bet your whole business on it. Identity Verification is an absolute must-have for your business. Besides being a legal requirement in a growing number of industries, it’s a necessity in the era of digital transformation, large-scale data breaches, identity theft, and account takeovers. Businesses need a reliable way to determine if a user is indeed who they claim to be online. The challenge is, how do you provide identity verification in a way that does not make your potential customers leave?

What you should be looking at is not trying to avoid the process, but rather reinvent it in a way that keeps the customer engaged.

How do you make the KYC process interesting enough so that customers don’t drop out?

At Identomat, we believe that it’s possible to turn the KYC process into a truly rewarding experience for the customer. Our flagship product was put together with the mission of enabling businesses to onboard customers faster and easier while maintaining the highest level of security. The secret to success is a minimal intuitive design and frictionless automation that can empower the user to seamlessly go through the process without roadblocks or hiccups.

In saying that, we understand that every business is different and brings its own set of challenges. This is exactly why we offer an end-to-end KYC & Identity Verification solution with enough flexibility to meet your unique business needs.

In the year 2020, where everything moves fast and people’s attention span keeps shrinking with every new app that comes out, having a cumbersome onboarding process can literally break your business. You can’t expect customers to compile documents that require any sort of manual processes. The entire procedure should happen online and this is exactly what Identomat can do: simplify and automate the process.

The latest advances in facial recognition and biometrics are creating ways for online business owners to run identity verification checks quickly and easily. A selfie, a photo of a government-issued ID/Passport/ Driver’s License, and a biometric check could save both the users and the operator numerous steps and time.

The idea that AI is a tech breed for the elite few is a thing of the past. You no longer have to run a Fortune500 company to offer it to your clients. With Identomat, you can easily help companies improve conversion rates, comply with AML and KYC regulations, and better detect fraud while delivering a definitive yes/no decision in seconds using artificial intelligence.

Identomat brings you the benefits of:

• Simplifying the user experience without compromising security
• Eliminating manual identity verification processes
• Accelerating customer onboarding and transactions
• Catching fake IDs and prevent fraud
• Industry-leading data extraction accuracy
• Omnichannel verification

https://youtu.be/jw5ZYSOiXs8

Your customers deserve a better onboarding process. Identomat delivers.

Follow Identomat on Social Media:

Facebook | LinkedIn | Twitter

The fight against financial crime is much like the 100m dash. Pardon our awkward analogy and give us an opportunity to explain. The 100m dash is a straight line foot-race were first and second place are determined by milliseconds. More often than not, the winner can’t even be determined in realtime, needing the assistance of video replay. The margin of error is minimal. How does that relate to financial crime, you might ask? 

Financial crime and KYC/AML security are exactly like the two athletes competing for the first and second position in the 100m dash. The margin for error is nonexistent and if one of the two blinks, the other one wins. The history of the rivalry is well-documented - from phishing scams and account takeovers to fake identities and financing terrorist activity, financial institutions have been asked to deal with a lot since the Internet became a big player in the way people and companies conduct business. 

The biggest ally in the world against financial crime is also the foe - technology. Tech has come a long way since the inception of the Internet and is the weapon both sides use to steal/safeguard data and information. Today, we’ll have a look at 3 challenges faced by financial institutions in their fight against financial crime, and the ways in which they go about resolving them. 

1. Irregular Regulation 

Whilst regulators around the world are essentially tackling the same issues and challenges, they are all doing it in isolation. Different jurisdictions call for different laws, and policies, creating a maze of compliance requirements for financial institutions and businesses. Take sanctions screening, for example, were each jurisdiction issues its own lists of sanctioned entities, making it increasingly difficult for FIs to check and investigate cases in realtime. 

Last year’s white paper by The Wolfsberg Group titled “Wolfsberg Guidance on Sanctions Screening” is a perfect example of the challenges that FIs need to maneuver through in order to not only comply with regulation but actively protect their organization from a possible threat. The need for a more uniform set of regulations is evident and has been the prominent industry subject for quite some time. Just have a look at the white paper by the  Institute of International Finance and Deloitte LLP titled “The global framework for fighting financial crime.” Here’s an excerpt from the paper, emphasizing the need for more consistent regulation:

“There is growing consensus that the current global framework for fighting financial crime is not as effective as it could be, and that more needs to be done at the international, regional and national levels to help identify and stem the flow of illicit finance.”

The solution is as clear as the problem. The only thing that remains that’s required, is action. 

2.Cybercrime & Protection of Client Data

Let’s start with some facts. 

In an article by USA Today, 2019 was coined as the worst year ever for data breaches with a 54% year on year increase in the first half of 2019. The article wasn’t wrong as what followed was a series of front-page, cyber-crime cases that have shaken the industry to its core. In July, came the New York Times exposé on the shocking Capital One data breach scandal compromising data worth over 100 million. In August, Monzo urged 500,000 customers to change their pin numbers, due to the internal mishandling of data storage. 

What’s the moral of the story? Financial cybercrime is at an all-time high and it needs to be addressed immediately if FIs want to keep their clientele. Security and confidence in their financial provider are two of the most important factors for people. In FIS’s “2019 Performance Against Customer Expectations (PACE)” findings revealed that 1/3 respondents surveyed has been a victim of fraud. Unsurprisingly, 90% claimed that a bank’s ability to keep their transactions safe and secure is a “very important” factor when choosing a financial provider.

The literature on how to avoid internal data breaches is endless but no matter how much you read and stay up to date, nothing will ever protect your company/FI better than an actionable plan. Cybercrime and client data protection go hand in hand and can prove to be critical in determining who comes out the other side as the winner. 

3.Rethink Operational Silos

Going back to our 100m dash comparison, much like athletes evolve, adapt, and break records, so does financial crime. The threat has become so diversified that it now looks like the Lernaean Hydra, the multiheaded monster from Greek mythology. What that means for FIs, is that they need to rethink their outdated operational silos. Compliance should stop operating in a vacuum, and it should take on an advisory role in the internal structure of the company. 

The legal, sales, and operations team should work in tandem with compliance and understand that they need each other to be more productive, safer, and more effective. Upper management needs to reinvent their roles and understand that their contribution in setting up a robust internal strategy system is essential. Compliance departments have always been considered as a defensive mechanism for companies, teams that react rather than proact. This paradigm is slowly yet steadily changing. Proactive governance reduces reactive compliance and the sooner FIs adapt, the sooner they will have a fighting chance against financial crime. 

Conclusion

Financial crime has been slowly yet steadily been growing over the past couple of years and COVID-19 has only escalated things. In a recent BIS white paper titled “Financial crime in times of Covid-19 –AML and cyber resilience measures,” this point was perfectly put forward and analyzed:

“The lockdown increases the scope for criminals to exploit vulnerabilities and commit financial crime. The increased online presence of virtually everyone has led to new, and in some cases more naïve, targets for online fraudsters. Work-from-home arrangements with remote access to corporate networks have significantly expanded the attack surface for cybercriminals. Money launderers can also take advantage of the increased need for financial institutions to identify and onboard their customers online. In normal times, cyber-attacks and AML violations expose financial institutions to significant operational and reputational risks. In exceptional circumstances like the current one, those risks could be further exacerbated.”

The challenges that could otherwise be set aside, can no longer be overlooked. If ever there was a time to address the challenges, regarding financial crime, the time is now. Depending on the phase your business is at, feel free to contact our team of experts and we will resolve any problem or question you have regarding KYC/AML.

The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog. This inter-governmental body is one of the most respected players in the field of online fraud and AML. With over 200 countries and jurisdictions committed to implementing its recommendations, it comes as no surprise that when the FATF Guidance on Digital Identity was released earlier this year, the world of KYC was listening.  

Let’s extrapolate some of the key points of the report. 

Bank The Unbanked By...Identifying Them 

One of the first, and strongest points of the guide is that traditional identification is limited, and is one of the main reasons, 1.7 billion people are unbanked. Growing up in developed countries, most of us take a lot of things for granted - a birth certificate for example. It’s something that most of us never even considered to be a luxury. A birth certificate is one of many documents required from a bank in order to open a simple bank account. 

According to UNICEF data, one in four children under age 5 do not officially exist in developing territories such as sub-Saharan Africa. This might come as a shock, but taking some time to think about it, will actually make sense of the whole situation. How long will it take for a farmer living in these territories to travel, on foot, in order to reach the city supplying a birth certificate? Even if they do, how much will it cost? Then, what about proof of residence? Is the farmer paying bills like electricity and water? 

It’s as if the banking system never thought of including people that live in developing countries. And this is where the FATF guide comes into play. The report mentions the following: “a robust digital ID can allow individuals without a traditional identification to nonetheless have a sound form of identification to access financial services and improve financial inclusion.”

It goes on to give examples of how this could actually work in developing countries. “For example, under the US National Institute of Standards and Technology (NIST) standards, ‘trusted referees’—such as village heads, local government authorities, judges/magistrates and employers can vouch for the applicant as a form of identity evidence.”

Whilst the humanitarian facet of this recommendation is both commendable and touching, there’s a business side of things that should concern every single business in the world. The companies that will manage to perfect the digital identification process will essentially unlock a  humongous, untapped market. The opportunity is big and the potential even bigger. 

A Need For Internationally-Agreed Standards For Developing Digital ID

Whilst the report makes mention of the need for a robust, internationally agreed framework for developing a digital ID, it does not go into great length in explaining what that would actually entail. Thankfully, this is a subject that has been floating around for quite some time, meaning there is the literature to explore it. 

The G20 Digital Identity Onboarding Report is a goldmine of information regarding the relationship and approach of governing bodies and the private sector, regarding the issue of digital ID. Here are two of the seven policy measures, that governments should consider in order to have an identity effective ID system that meets the needs of the financial sector:

1. Support and empower development of private sector led services to leverage the legal ID infrastructure for building out digital layers. In doing so, the public authorities should ensure that these services are safe, reliable and efficient; these services are interoperable; and that the market is competitive;
   
2. New approaches to ID are constantly emerging and public authorities should closely monitor these developments with a view to share knowledge and establish common legal frameworks at both the domestic and international level.

What becomes very apparent from these recommendations, is the need for collaboration and rapport between government and private sector. The good news is that governments are starting to pay more attention to digital identity. Norway-based telecommunications company Telia and identity verification experts Signicat partnerned and managed to reduce fraud cost by 4 million NOK in 9 months by leveraging digital identity. If that’s anything to go by, the potential is limitless. 

There is a Favourable Technology & Its Name is Artificial Intelligence

Going back to the FATF guide, one can’t help but notice the following statement: 

“The FATF Standards remain technology-neutral. We highlight examples but do not favour any technology or specific requirements for digital identity to be used for AML/CFT purposes.” 

The decision to stay away from siding with a specific breed of technology might have a lot of reasons attached to it but we’re not here to investigate those. What we are here to investigate, is the aptness and suitability of artificial intelligence in solving the problem of digital identity. The power of AI in shaping digital identification has been a subject in major conferences, reputable publications, and research. It is clear that AI has already taken the world of digital identification by strom and it’s only a matter of time before it becomes the de facto tech regarding digital IDs.

Our team here at Identomat is always willing and available to explain how AI plays a defining role in the making of our products and services. Feel free to reach out and initiate a conversation.

Tbilisi, Georgia - Identomat, a Georgian AI-based platform for Know-Your-Customer (KYC) and Identity Verification has successfully obtained the opinion of the State's Inspector Service and is now fully compliant with the Georgian Law on Personal Data Protection. Using the latest technologies, Identomat developed an AI-powered tool that onboards customers in a smoother and more streamlined way, without jeopardizing data protection law whilst guaranteeing the security of the collected data.

In an era where data breaches happen almost on a daily basis, organizations that provide financial or identity verification services are under immense pressure from regulators and legislators to focus on KYC and client due diligence. Identomat realizes the responsibility of data and information mining and values its security. Being fully compliant with the law of Georgia on Data Protection, ensures Identomat practices are in line with the business processes and technical safeguards outlined by the legislation. Identomat takes pride in being able to manage the delicate balance between fast, easy, and smooth KYC processes while simultaneously protecting and securing the collected data.

Not only does the aforementioned opinion of the State's Inspector Service of Georgia mean that Identomat complies with the legislation in Georgia, but it also sends an important message as the Company aims to expand internationally. Georgia's Law on Personal Data Protection is regarded as one of the most comprehensive pieces of legislation in setting the standard for the protection of customer data.

Georgian law on Personal Data Protection has been in force since 2012 and the following year the data protection office was founded, later renamed into the State Inspector's Office. The legislation aims to ensure human rights and freedoms are secured in the process of personal data processing. The Law of Georgia on Personal Data Protection states that data could only be processed fairly and lawfully, without degrading the dignity of a data subject.

"We aim to provide clients with great user experience, as well as a quick and super-light onboarding process. Yet, we do not take security lightly. We hold ourselves responsible for our customers' data and are guided by the highest standards in data protection - says Zura Kotaria, CEO of Raizomat, the company behind Identomat. "Obtaining the opinion by the State's Inspector Service is a natural milestone for us, while we are also awaiting for the ISO-27001 certification, and GDPR compliance as we prepare to offer our services to EU-based clients".

About Identomat:
Identomat is a KYC (Know Your Customer) and Identity Verification solution, developed in Tbilisi, Georgia. Relying on its proprietary technology, based on the latest advances in Artificial Intelligence and Machine Learning, Identomat streamlines the onboarding process, providing organisations and businesses with reliable identity verification and fraud prevention solutions. Please visit https://identomat-329a23.ingress-baronn.ewp.live/

What most people know about Georgia is that it has a long and proud history of winemaking. What people don’t know about the country of Georgia is that it sustains a business-friendly environment through flexible, thorough, supportive and far-reaching legislation. 

In 2014, the EU and Georgia signed a Deep and Comprehensive Free Trade Agreement (DCFTA) that guaranteed Georgia to be an inseparable part of the common market of European Union making the country very welcoming towards investors, encouraging foreign investment. Legislation supervising foreign investment has created appealing conditions giving foreign investors the same privileges and rights to locals. 

So, what are the things that you should know about? 

Starting a business in Georgia 

According to the World Bank Ease of Doing Business 2020 Data, Georgia ranks 7th in the list of countries that’s easy to conduct business. It only takes a day or two to register a business and the fair is quite low, ranging from 40-60 USD.

As for the rules concerning reorganizations, more information can be found in The Law of Georgia for Entrepreneurs. 

Taxes 

Tax and customs legislation is merged under a single tax code and is collected and supervised by the Revenue Service of Georgia. So, there is Corporate Profit Tax (15%), Value Added Tax (18%), Personal Income Tax (20%), Import Tax (0-12%), Excise Tax (on selected goods) and Property Tax (stopping at 1%). 

Permits, Certificates, Licenses

To-be-established companies that are going to have an impact on the environment, human life or health, are obliged to prepare an essential check called Environmental Impact Assessment and subsequently, present it to the Ministry of Environment Protection and Agriculture.   

Trade and Customs

Customs procedures in Georgia are pretty transparent and take no longer than 15-20 minutes. Taking into consideration the fact that Georgia has free trade agreement with Ukraine, Turkey, China, including EFTA and CIS countries, on top of the DCFTA with the EU, without imposing customs or import rates, Georgian goods are available to roughly 2.5 billion population markets. 

Data Protection Laws

The Law of Georgia about data protection aims to secure human rights and freedoms, including privacy if the personal data has to be mined. The law applies in these following cases: Automatic data processing, Semi-automatic data processing, Non-automatic data processing inside Georgia. The principles of data processing encompasses rules like data being processed for only the amount of time that is needed to process the data, without damaging subjects’ dignity, collected data, if not necessary or relevant, must be deleted, destroyed or stored in a way that guarantees anonymity of the person.  

In conclusion, Georgia is definitely open to foreigners and is ready to accommodate. Taking into consideration the tireless refinement and updating of the business environment it is definitely on the rise of becoming a reliable investment destination in Eurasia. 

The Sixth Anti-Money Laundering Directive is the EU’s latest iteration of a deliberate attempt to define crime related to terrorism and money laundering in the EU Member States, as well as to determine the liability and penalties of the parties involved in the aforementioned activities.

The 6AMLD came after just 6 months after the adoption of the 5th EU Anti-Money Laundering Directive (5AMLD), highlighting the speed at which things are evolving in the KYC industry. Financial crime coupled with the rise of cybercrime has threatened companies, governments and countries in recent years and these Directives showcase a concentrated effort to combat that. 

What changes does the 6AMLD propose? 

If you had to put a general title on the proposals of the latest Directive, you could safely say that it expands and digs deep into Predicate Offenses. You’re probably in the process of Googling the term ‘predicate offense’ so let us save you the trouble.

In simple words, a predicate offense is a crime that is part of or leads to a larger crime. More often than not, financial crimes consist of chained actions and reactions that eventually culminate in what we know as money laundering. 

What the 6AMLD was put together to do, is reverse engineer money laundering and break down the crime into smaller crimes, identify them, point them out and hold everyone involved in them accountable. The Directive defines and standardizes the following 22 predicate offenses for money laundering in all EU member states:

Impact on FIs: How Should They Prepare?

Even though the changes proposed by the AMLD6 are very particular, the learnings and takeaways for FIs are broad. If there’s anything to learn from the AMLD6 is that it won’t be the last time we will hear from the European Commission. The frequency and intensity of regulation will only escalate and FIs can’t afford to simply react to each and every new piece of regulation.

It is evident that the entire KYC and AML industry is under siege and FIs need to take a holistic approach in their planning if they want to stay afloat. The days of doing the absolute minimum for compliance are long gone, with RegTech taking a prominent role in this equation. 

RegTech should be seen as a revenue generator and key strategic differentiator, establishing compliance as one of the most important departments in the company. FIs should build around Regulatory Technology and aim to create a governance framework that emanates from the top, down. 

Buying the appropriate technology and establishing internal processes are the tools to achieving the goal but the cornerstone of success lays in understanding the importance and gravity of compliance as a function.

Is AI Worth The Hype? 

Yes. If anything, the importance and potential of Artificial Intelligence in the KYC space is underplayed and underrated. The industry has been under immense pressure in the past couple of years with regulations and scandals redefining the means and ways you go about Know Your Customer procedures. 

In the midst of this disarray, AI has emerged as the guiding light, the savior the compliance space was calling for. What does AI mean for compliance, what’s the role of this new3 technology and what problems does it really solve? Let’s investigate. 

Reassignment & collaboration

The idea that Artificial Intelligence will replace humans is ignorant, to say the least. Can AI machines sort through the tons of data better than humans? Yes. Does that mean machines will simply replace the people that have manually performed these tasks up until now? No. It’s important to understand that AI technology is not something you plug in and identity verification problems simply go away. 

AI technology is an ecosystem, it’s a framework built around people, their experience, skills, and ability to make sense of the data analysis and findings. People in the KYC, AML, and identity verification industries would not get replaced, but reassigned. Their roles would simply develop and evolve around the new technology. AI is not something that would take their jobs but a powerful tool that would help them do their job better. 

Identity verification is a problem that tantalizes companies across the globe. It’s a universal problem that has been dealt with in isolation up until now. One of the main ideas proposed by AI technology is the ability to deal with this problem on an international basis. Technological consortia may just be the solution to the problem. A scenario where banks and companies share their data, creating a centralized information center that is way more powerful than what each company could have ever achieved on its own. 

An appropriate term for it could probably be collective intelligence. A collaboration that benefits all partakers without meddling with competition principles or profit generation. 

AI & UX Are Best Friends 

Want some double-barreled words to describe the current KYC and identity verification process? Labor-intensive, time-consuming and error-prone. Unfortunately, all three words perfectly describe the process most financial institutions and companies use to onboard their clients. 

What’s interesting is that we always look at the onboarding process from the business side of the equation. Rarely do we take a step back to evaluate the user experience and how customers feel when they go through the long and arduous KYC process. 

In a world where everything is becoming mobile-first and people are used to interacting with apps, clicks, taps, and touches, the identity verification process for a customer that wants to open an account with an FI is long, manual and arduous. Many companies are subject to worrying drop off rates as users can’t be bothered to go through the entire onboarding process. In the UK, 25% of applications are abandoned due to KYC friction according to a 2017 report from Consult Hyperion. 

This is where AI can work its magic and not only simplify the process but make it modern, fresh and minimal. Manual checks such as photo/ID verification can happen within minutes and people can be onboarded on the system within hours. Running a name through huge databases, PEP lists, and adverse media articles used to be a long and exhausting task for compliance staff but it’s a basic task for AI. The automation of this process significantly minimizes the time people have to wait for being onboarded. 

Better user experience does not only create healthier customer retention numbers for companies but it builds a relationship of trust between user and company. A fast, hassle-free onboarding process leaves a sense of satisfaction and content in the customer. It builds a foundation for a bright future as the first time the customer was asked to interact with the company they walked away with a positive impression. 

Consolidate Data Silos

AI is known for going through humongous numbers of data and information, organize and structure them in a short period of time. Even though that’s impressive, that’s not where it stops. Through Natural Language Processing (NLP), it is possible to not only compile data but make sense of it. 

AI has the ability to comb through data and build risk profiles with just the relevant information about an entity, cutting through the noise and anything irrelevant. Apart from the obvious time-saving implications afforded by AI in this scenario, companies will also end up with more robust risk profiles - faster execution and better results all in one. Analysts will now be presented with an up-to-date, detailed yet relevant distillation of what they need to know about an entity without having to do any manual work. 

Mitigate False Positives 

Monitoring the transactions of a suspicious entity is a tricky affair. Manually following these entities is logistically impossible so FIs resort to a rules-based system where they set certain parameters that the entity needs to operate within. If for example, the system recognizes a transaction that is above the set parameter, it will flag the transaction and alert the FI. 

The problem with this system is that the rules-based approach is too simplistic and does not take into consideration variables that might explain these transactions. Even though a transaction might seemingly fall outside the rules, it usually ends up being not something the FI should be concerned about. These findings are known as false positives.

What was meant to be a solution for KYC monitoring ends up being a problem for FIs. Analysts have to go through an endless list of alerts that hold no value. According to Reuters, 95% of alerts are closed as false positives in the first phase of the review. 

How does AI solve this problem? First and foremost, it moves away from the preset, rules-based system as it’s obviously too rigid and does not match the live, on-going nature of monitoring. An AI algorithm will be able to monitor transactions and determine its risk relevance before flagging it. The fun does not stop there. AI has the ability to learn from patterns, trends and previous matches and build a database where it can draw examples and references more. The more the algorithm is used, the smarter it will get, building its own set of parameters on the go. 

Zura Kotaria, CEO and co-founder of Raizomat, the company behind Identomat, was a guest on a Facebook LIVE by Orient Logic, one of the leading Georgian companies in IT infrastructure and Business solutions. Mr. Kotaria spoke about founding Raizomat and the rising need for remote services, highlighting the fact that number one Georgian insurance company Aldagi has fully digitized its services through Identomat.  The main concern, when it comes to KYC and handling someone else’s personal data is data protection. Mr. Kotaria stated that Identomat guarantees mined data security:

‘As a company, we reached out to the state inspector of data protection and introduced how Identomat processes work. the inspector acknowledged that Identomat is fully compliant with the data protection law of Georgia. Moreover, since we are eyeing international markets, our company fully complies with international laws of data protection as well. ‘

Mr. Kotaria also mentioned branching out overseas, main focus being the United States of America and Europe:

‘The first stage of merging into the international market would be Eastern Europe and the United States where we have a partner organization. Also, Ukraine, where we have presented our project, and Baltic countries, since remote services for the financial sector are very popular there too. ‘

The live session can be watched here (in Georgian)

Contact us to learn more about Identomat and if it fits your business.

If you have been following tech news for the past five years, Artificial Intelligence and advancements in the said field have been the dominant topics. That being said, countries known for their proficiency in tech like the US and China are expected to make headlines. But what about not-so-well-known countries, like Georgia? 

The country of Georgia, has come a long way the past decade with a lot to show in the field of Artificial Intelligence. New labs, hubs, universities even, have been emerging these past 7-8 years in Georgia, especially in the capital, Tbilisi. The pioneer lab, GeoLab introduced and popularized the interest towards AI and continues to work on digital projects to attract more youngsters. 

Apart from educating its citizens, AI has been a thread of connection with the EU, since the European Union switched from a knowledge-based economy, to an AI-based economy. By creating a friendly AI-oriented environment, which is essentially a prerequisite for investments in the field, Georgia showcased readiness to become a reliable partner.

In order to reach international markets, the existing and upcoming businesses in Georgia, have been adapting AI technologies and really making it the basis of their products. Take IDENTOMAT for example – it takes everyday, mundane KYC-related tasks and completes them efficiently. 

As far as the public sector’s involvement, the Georgian government has an issue to address. The issue mainly being the support of the Georgian people in acclimating with AI-powered services. The concern is that not everybody understands or backs AI technology, creating an adjustment period.

Every confrontation is an opportunity for growth, right? AI is still in its infancy and Georgia has a unique opportunity to grow the technology with a clean slate. What will happen remains to be seen but if the current situation is anything to go by, Georgia has the potential of becoming a tech hub, a point of reference for companies interested in AI technology.

This year’s COVID-19 pandemic and subsequent lockdown, seem to have halted the global economy, resulting in dire projections for the year 2020 and beyond. Yet while things look uncertain in many areas, one thing remains true: life does not stop. Routine tasks pile up, bills keep coming, and the dates on the calendar just keep changing. This also means that regular insurance coverage packages expire just like they used to - be it health, life, or car insurance. 

In many countries, the only way to renew an insurance agreement is in-person. In the current environment, breaking quarantine to renew your insurance seems laughable to say the least. Fortunately, there’s Aldagi, Georgia’s leading insurance company.

Just days ago, Shota Chachkhunashvili, Director of Aldagi’s Strategic Development department, announced Aldagi’s full digitalization. This means that Aldagi has become the only fully digital provider of insurance services in the region, relying on the latest technologies of blockchain and Artificial Intelligence. 

From now on, all Aldagi’s processes will occur digitally, protecting the employees and clients both from exposure to the virus, as well as from unnecessary steps. Identomat is proud to be Aldagi’s partner in providing our artificial intelligence-powered solution for Identity Verification. 

As Mr. Chachkhunashvili has explained in his interview to Marketer.ge, one of Georgia’s leading online media, relying on the best and latest of the Artificial Intelligence and blockchain technologies has been a strategic decision. With the growing interest in affordable and accessible insurance products, digitalization had been the obvious next step for the insurance market leader. The pandemic merely accelerated the change. 

From now on, all transactions are verified and recorded via the blockchain (the main benefit of the blockchain technology is that its records cannot be altered thanks to cryptography). Thanks to Artificial Intelligence, which powers the Identomat solution, Aldagi is able to verify customers’ identity, accurately extract data from submitted documents, and process it according to all legal requirements and standards of online security and data protection. All insurance packages can be purchased and finalized online, including submissions of all related materials. When it comes to a car insurance package, for example, a customer can upload all necessary photos of the vehicle online and finalize the agreement. In the past, purchasing a car insurance package would require a company employee to examine the car and document the process, after which the documents were signed. 

“Identomat also provides identification of our clients and insurance subjects remotely, which is very handy in today’s fast-paced world, ” said  Mr. Chachkhunashvili. The key difference between prior service and the Identomat-provided service is that the customer obtains any type of insurance policy (price and insurance subject do not matter) without the need of bilateral signature, but simply through the web-application powered by Identomat - fast, easy and safe. 

Identomat was created by Raizomat, the company behind a number of innovative tech projects.  Raizomat is an expert in machine learning, data mining, robotic process automation. Businesses are increasingly adamant about implementing online KYC/AML compliance services, but it has never been as essential as it is today, when the world is facing the reality of the COVID-19 pandemic. 

At Identomat, we are proud to have contributed and collaborated with the most prominent insurance company in the country of Georgia and look forward to bringing digitalization to the next level in Georgia and beyond. If you are interested in how our technology can fit within your business flow, and help your company grow, contact us today.

A KYC process is not something that’s set in stone. It’s an ever-changing, always-evolving project that will always need fine-tuning and adjustments. Today, we’ll give 5 easy steps you can take in order to improve your KYC process. 

Create Audit Trails

Audit trails are a fairly simple concept but their value to the KYC process is immeasurable. An audit trail documents, records, and chronicles each and every step of the KYC process. From profile creation to monitoring and editing, the audit trail clearly maps the sequence of activities undertaken by the company, emphasizing the principles and values of transparency and clarity. 

Audit trails are not only valuable as a culture builder, but they are a tremendous tool when evaluating the quality of work that’s been done. Internally, it gives management clear insight into the steps undertaken by staff when dealing with an entity but the real merit of the trail comes when external regulators run their checks on the company. The audit trail is the single most important piece of evidence that the KYC policy has been executed according to the policies, guidelines, and requirements of the regulator. 

Failure to adhere to KYC regulation can undo months or even years of hard work for the company. Fines, financial but importantly reputational damage can prove detrimental to the progress of an organization that falls short of the proper KYC procedures. An audit trail is not a suggestion or something that ‘would be nice to have’. It’s a necessity and priority that can prove to be critical for the company’s future. 

Cloud-Based API Technology

The idea here is simple. Monitoring the news, feeding the in-house compliance workflow with industry-leading data and information and getting instant updates about new compliance regulations is a huge undertaking in its self. Instead of using your in-house resources to go hunt for this information, you can simply leverage cloud-based API technology. 

The KYC process instantly becomes faster, streamlined and more accurate, allowing compliance analysts to make informed risk decisions. Their skills can be used in analyzing the information, drawing inferences and conclusions instead of burning out, manually looking for information. 

Tailored Approach 

One of the most important steps in bettering your KYC process is understanding the intricacies of your own vertical, product and geography of conducting business. Even though there are best practices for conducting KYC that apply to every single company, in every single market, if you want to get serious about your KYC process, you need to dig dip into the identity and uniqueness of your industry.

What’s the financial and regulatory environment in the jurisdictions you’re selling? What’s the customer persona? Are you a B2B or a B2C company? Are you dealing with clients that possess a complex layer of ownership structure?

Answering questions in the same vein as the examples given above can essentially shape the way you approach and tackle your KYC process. Even though the end-goal of every KYC process is the same, the means by which you go about achieving that differ greatly when you drill down to details.

Employee Training 

We can’t stress this enough but the compliance industry is one of the rapidly evolving sectors in business. Reaching out to technology solutions in order to catch up is one way to go about it but you must never forget the most important asset your company possesses: people. 

Being a compliance analyst is similar to being a doctor or a software developer in the sense that you never stop learning. A degree and some years of experience mean nothing if you stop evolving and learning the new trends that unfold in your sector. Investing in employee training is investing in your company. 

The benefits are tremendous as not only will employees be upgrading their skill set but they will also feel an increased sense of motivation and value. When your employer allocates the time and resources to train you, you feel important and valuable, renewing your incentive to show up to work and do your best. 

Internal Assessment 

Once in a while, it’s good to take the time for some reflecting, do some cleaning up of our mess and evaluate our own performance. The same logic applies to companies. It’s important to establish a framework of governance and management where departments are assessed on goals, results, and performance. 

Even though this happens for the most part for revenue-generating departments like sales and marketing, this is often not the case with compliance. For the longest time, KYC was seen as something companies had to do rather than want to do. In recent years though, the perception seems to be changing and companies are more educated on the importance of a healthy, high-functioning KYC department. 

Implementing an internal assessment system will only help the department perform better and subsequently push the company to greater heights.

Located at the intersection of Europe and Asia, the country of Georgia is mostly known for its architectural treasures and picturesque landscapes with some of them even featuring on the UNESCO World Heritage list. Things seem to be changing though, as Georgia is making itself known for a lot more than its natural beauty. 

Despite the small scale of the country itself, the location is proving to be pivotal for Georgia's rising: right between Asia and the EU empowers good trade relations with Asian and European countries, following the free trade agreement with the European Union in 2014. 

Technology has been the focal point of NGOs, government and startups for quite some time. The Georgian government has achieved great results in helping businesses set up processes fast and easy, not just for the locals, but especially for foreigners. There are only several procedures to go through and your business could be up and running in no time. The high engagement in this field breeds growing business interests and attracts investments - making Georgia a tech-hub among non-EU countries. 

Besides the birth of dozens of new local tech startups every year, technology has been blooming in Tbilisi for the past 5 years. Emerging Techno Parks, innovative centers, Tech hubs, labs and more, are focused on developing and bettering technological ecosystems in Georgia. 

In recent years, many digital and tech seminars and projects have been held in Tbilisi, gathering not just Georgians, but internationals interested in technology advancements. Special notice is deserved by Tech Park of Tbilisi, that has invited international professionals to share their experience, for example Paolo Italiani, that spoke about innovation, inspiration and visualization. Italiani, who is an industrial designer, has a relevant experience in said field in the US and Italy. Also, Tech Park has hosted Encata, a Belorussian company that specialises in end-to-end product development and software engineering.  Projects and startups have been presented showcasing passion and true commitment to the current and upcoming news in technologies. Presented projects encompassed diverse fields, including medicine, PR, informational technology, entertainment, education, insurance, finances etc. 

Identomat is only one example of the many thriving tech startups in Georgia, bringing the latest technology trends to their clients, both domestically and worldwide. As more and more global businesses and investors turn their sights to Georgia, we’ll be bringing you more insights into the country we are proud to call home.

Identomat has been featured by a Georgian TV channel! Formula News ran a feature about our company and product on Saturday, April 11, 2020. The story can be viewed (in Georgian) here. 

For all our non-Georgian speaking readers, we are happy to share the translation of the TV spot, which included the detailed showcase of Identomat’s KYC solution, alongside interviews of our core team members:

***

How many of you had to wait in endless queues in the service centre to be identified as a customer? From now on, this can be done from the comfort of your home - using just your ID card and a selfie. 

Identomat is an online registration platform that allows the business sector to check authenticity of documents and liveness of customers. As a result, customers can undergo verification processes via a smartphone or computer, without having to go to the service center.

‘Identomat brings the benefit of simplifying user experience without compromising security, making it easy and fast as well. Identomat provides instruction on each step of the verification process. ‘ - Marika Sherozia, Senior Product Manager.

A new Georgian platform was created a couple of months ago, that complies with international standards and stays relevant to the recommendations of personal data inspectors. 

Identomat’s team principle is that there is no such thing as an unresolved problem. So despite many obstacles, like lack of qualified personnel and legislative system, the platform was created, and is capable of user verification, liveness check as well as determining the authenticity of a document. 

‘Liveness check is crucial, so that someone else would not use your face to authorize an account. There are many methods to do that, but our team and many tests have concluded that contingency is key. Therefore, we decided on a smile, because when one smiles all face muscles work. And it is impossible to fake it. ‘ - Rezo Imnadze, co-founder of Raizomat

Identomat was created by Raizomat, who has implemented many other innovative projects.  Raizomat is an expert in machine learning, data mining, robotic process automation.

‘As a rule of thumb, assessing risk used to take about 40 minutes. With Identomat the time is reduced to seconds. ‘ - Zurab Kotaria, co-founder of Raizomat. 

Businesses are more and more adamant about instilling online KYC/AML compliance services, but it has never been as essential as it is today, when the world is facing the reality of covid-19 pandemic. In crisis and post-crisis times, Raizomat is prepared to help out businesses with the Identomat platform for free. 

***

We are excited about our first major media feature, and can’t wait to share with you what’s in store for Indentomat in the coming months! Stay tuned, and follow us on Facebook, Twitter, and LinkedIn, to never miss the news.