# Criminals and terrorists on the back foot thanks to innovative identity check tech for e-money, prepaid and fintech financial services     
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2019-02-26
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: Innovative KYC Technology Thwarts Criminals in E-Money Sector
Meta Description: Discover how innovative technology is defeating criminals attempting to use e-money for illegal activities. PIF's detailed review shows firms are winning
URL: https://financedigest.com/criminals-terrorists-back-foot-thanks-innovative-identity-check-tech-e-money-prepaid-fintech-financial-serviceshtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/biometrics-1736839139916-compressed.jpg)

New research by Prepaid International Forum (PIF) reveals how innovative technology is successfully thwarting and discouraging criminals seeking to use e-money or prepaid financial services to launder money or commit fraud.

PIF, the not-for-profit trade body representing the prepaid and fintech industries, reports that as the market for e-money products grows (including prepaid bank accounts and digital wallets), so does the potential for attempts by criminals and terrorist groups to harness this sector for their own aims.

However, a detailed review of the sector’s KYC compliance measures, produced in association with identity verification specialist HooYu, shows that prepaid and fintech firms are winning the war on identity fraud thanks to a wide range of innovative technologies combined with best practice principles, due diligence and governance.

Diane Brocklebank, spokesperson for PIF, says:

_“The [sector is at the forefront of developing innovative](https://www.financedigest.com/why-the-finance-sector-must-prioritise-mobile-security-over-innovation.html "Why the finance sector must prioritise mobile security over innovation") financial services to harness new technology in ways that better meet customer needs and changing lifestyles._

_“As an industry, we are also very aware that this [innovation needs](https://www.financedigest.com/why-covid-has-increased-the-need-for-corporate-sustainability-innovation.html "Why COVID Has Increased the Need for Corporate Sustainability Innovation") to go hand-in-hand with proportionate compliance measures to prevent its misuse by those seeking to move money for criminal and terrorist purposes._

_“In order to track progress against this objective, PIF has undertaken a detailed review of the [technologies and procedures being used to on-board new customers](https://www.financedigest.com/the-advanced-wound-management-technologies-market-to-grow-based-on-customized-digitization.html "The Advanced Wound Management Technologies Market to grow based on customized digitization")._

_“The results highlight the [sector’s success](https://www.financedigest.com/is-automation-key-to-esg-success-in-the-banking-and-finance-sector.html "Is automation key to ESG success in the banking and finance sector?") at balancing the need for compliance with providing an optimum user experience by allowing legitimate customers to get up and running (in the majority of cases) within 15 minutes. Those requiring [additional security can be cleared as quickly as possible](https://www.financedigest.com/antimicrobial-protection-additives-for-adhesives-market-incredible-possibilities-growth-analysis-and-forecast-to-2028.html "Antimicrobial Protection Additives for Adhesives Market Incredible Possibilities, Growth Analysis And Forecast To 2028") (100% within 2 days) or, in the case of dishonest users, refused.”_

The survey includes businesses representing the full spectrum of e-money and prepaid providers, varying in size, [product and business](https://www.financedigest.com/fortified-dairy-products-market-outlook-cover-new-business-strategy-with-upcoming-opportunity-2022-to-2032.html "Fortified Dairy Products Market Outlook Cover New Business Strategy with Upcoming Opportunity 2022 to 2032") model. The research found that 100% of prepaid fintech firms are achieving [Customer Due Diligence](https://www.financedigest.com/why-due-diligence-is-so-important-for-direct-debit-customers.html "Why due diligence is so important for Direct Debit customers") compliance requirements, with many firms going above and beyond minimum compliance requirements.

Of those applications failing initial database checks, 14.3% are cleared to be opened within 15 [minutes and 100% of valid applications are cleared within two days](https://www.financedigest.com/nz-aussie-dlrs-have-busy-day-fed-minutes-loom.html "NZ, Aussie dlrs have busy day, Fed minutes loom"), dependent on the speed at which applicants return appropriate documentation.

An increasing number of prepaid fintech firms use a range of innovative techniques that are harder to cheat (especially when used in combination) but are still quick and easy for customers without damaging the [customers’ digital](https://www.financedigest.com/the-cervical-total-disc-replacement-market-to-grow-based-on-customized-digitization.html "The Cervical Total Disc Replacement Market to grow based on customized digitization") journey. For example, 43% of checks will use geo-location to check the customer location tallies with the data given in their application.  Even newer technologies are being used whereby 57% of firms will examine the applicant’s digital footprint and [social media](https://www.financedigest.com/top-social-media-growth-companies-in-the-uk.html "Top Social Media Growth Companies in the UK") accounts to gain further confidence in the customers’ identity.

David Pope, marketing director at HooYu, which advised on the research commented: “It’s important to show the extent that [regulated firms](https://www.financedigest.com/evolving-ransomware-and-regulations-is-your-firm-ready.html "Evolving Ransomware and Regulations: Is your firm ready?") use innovative KYC technology to quickly identify and accept genuine users whilst also cracking down on potential criminal activity”.

PIF’s findings are corroborated by the recent [Financial Conduct Authority’s (FCA) report on Money Laundering and Terrorist Financing Risks in the E-Money Sector](http://www.fca.org.uk/publications/thematic-reviews/tr18-3-money-laundering-and-terrorist-financing-risks-e-money-sector).  The report found that the sector had [effective controls and a good culture of compliance](https://www.financedigest.com/ifrs-15-moving-away-from-short-term-fixes-is-vital-for-effective-compliance.html "IFRS 15: Moving away from short-term fixes is vital for effective compliance").

Diane Brocklebank, added:

_“The FCA’s comprehensive review is a great endorsement of the work being done to tackle potential crime._

_“It found that the majority of the firms they visited had effective [anti-money laundering systems and controls to mitigate money](https://www.financedigest.com/are-compliance-and-anti-money-laundering-aml-regulations-hurting-your-sales.html "Are compliance and anti-money laundering (AML) regulations hurting your sales?") laundering and terrorist financing risk.  Also, that there was good awareness and understanding of financial crime and that firms generally demonstrated a low financial crime [risk appetite](https://www.financedigest.com/u-s-dollar-climbs-to-two-year-peak-as-risk-appetite-tumbles-yuan-drops.html "U.S. dollar climbs to two-year peak as risk appetite tumbles; yuan drops") with financial crime prevention “well embedded” in company culture._

_“The majority of firms with outsourced distribution of e-money and compliance to programme [manage](https://www.financedigest.com/extended-reality-applications-in-risk-management.html "Extended Reality Applications in Risk Management") rs had adequate governance and audit measures to manage the risks.”_

**Download the full report by visiting** [https://hooyubusiness.com/prepaid-fintech-kyc-technology-report/](https://hooyubusiness.com/prepaid-fintech-kyc-technology-report/)


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---