On 12 June 2019, we attended and sponsored the MLROs.com Conference Two, hosted at Winckworth Sherwood in London.

Rapid enhancements to technology, particularly around face and voice recognition, are set to change the way we interact with the financial system. Our CEO Vipul presented our thoughts and vision on future proofing robust onboarding and how we can begin to put the ‘Know’ or ‘K’ back in ‘KYC’.

Here’s a recap of some of the key themes we covered…

The Landscape then vs. now 

Years ago, the banking landscape looked very different. Community-based banking meant that bank managers and employees within the banks got to know their customers, their networks and their character face to face. With the emergence of technology and digital banks, this has since changed. Relationships are very much built online. Take for instance the digital-only bank Monzo – they onboard thousands of customers a week, all through their online portal. This makes getting to know customers very difficult, but not impossible with the help of online due diligence.

What could Online Due Diligence reveal?

There are many instances where online due diligence, through the right blend of technology and human analytics, could have revealed characters, traits and behaviours of customers that are unfavourable to say the least. For financial crime practitioners and those working in fraud prevention, it’s vital to consider the wealth of untapped, unstructured and underutilised data that exists and sits on the largest database of them all – the Internet. Did you know? Only 4-6% of the whole Internet is indexed by search engines, leaving a vast amount of publicly available data across the wider Internet and the deep web.

What are the challenges? 

Online due diligence and open source intelligence is not without its challenges. Finding the right ‘John Smith’ can be an issue, especially for those working in AML and financial crime prevention solely using structured database checks. However, following an individual’s digital trail means that only that ‘John Smith’ is checked and insights gleaned will provide zero false positives. The blend of machine learning technology, human analytics and cyber intelligence skills that Neotas deploys ensures that the risk of human bias and false positives are removed, and it provides time and cost efficiencies in the customer onboarding process.

The Regulators are calling for it…

This slide is often a talking point. The regulators, from the EBA to FINRA, are beginning to call for the use of open source checks to help pinpoint and mitigate risk, from employees to customers. This is a key development that we’ll be watching closely.

The MLROs.com event was brimming with financial crime practitioners keen to understand new trends and topics and practical ways to implement some of the tools and systems being presented. We are delighted to have been a part of this year’s conference, to help raise awareness on the importance of timely open source Internet checks to help fight financial crime on a wider scale.