April 21, 2020

Global financial crime-fighting body backs digital onboarding call

The Financial Action Task Force (FATF), the multinational body charged with setting the global approach to fighting money laundering and terrorist financing, has backed a call by leading Regtech firm SmartSearch for businesses to employ digital customer onboarding processes.

As the coronavirus pandemic forced the UK into lockdown in March, anti-money-laundering (AML) specialists SmartSearch warned that it is no longer safe to rely on physical documents for onboarding customers and urged businesses to make the switch to digital Know Your Customer (KYC) and AML processes.

The FATF has now echoed SmartSearch’s warning that criminals are likely to seek to take advantage of the crisis and that vigilance against fraud and money-laundering is more important than ever.

In a statement issued earlier this month, the FATF warns against “criminals attempting to profit from the pandemic by exploiting people in urgent need of care and the goodwill of the general public and spreading misinformation about COVID-19”.

To combat this threat, the FATF explicitly “encourages the fullest use of responsible digital customer onboarding and delivery of digital financial services in light of social distancing measures”.

The statement goes on to say that national governments should promote “the use of technology, including Fintech, Regtech and Suptech to the fullest extent possible”.

SmartSearch chief executive, John Dobson, commented: “The FATF’s guidance is as clear as day. Criminals are looking for every opportunity to get round AML defences, and the best – indeed the only – way to stop them is to use digital onboarding and KYC processes.

“Electronic verification allows firms to continue ‘business as usual’, with all necessary checks carried out remotely, and no physical documentation required. Firms can be up and running with our system in less than 48 hours, and a full individual AML check – including global Sanctions and PEP screening – takes just a few seconds.

“The coronavirus poses a serious threat to people’s health but it should not be an excuse to water down defences against financial crime.”