webinar key takeaways from our - identitymind · spreadsheets are dead, long live spreadsheets know...

Key Takeaways from our Webinar

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Setting the Table

Many financial institutions (FIs) are using spreadsheet programs for compliance activities.

These tools are not built for for this purpose and can leave your business at serious risk of enforcement actions.

● Financial Institutions○ Money Service Business, Money

Transmitter○ Banks: Digital and Traditional Companies○ FinTechs○ Payments: Processors, Gateways, ISOs

● Spreadsheet programs like Excel, Sheets, Libre Office

Who is Using Spreadsheets? What Are They Using?

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Spreadsheets are Dead

What do compliance officers use spreadsheets for?

Know Your Customer

Transaction Monitoring

Fraud Prevention

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Spreadsheets are DeadWhen do compliance officers use spreadsheets for KYC?

Know Your Customer

Spreadsheets are used to keep track of the personally identifiable information (PII) collected as part of the onboarding process. This may include name, date of birth, email, address and an identity document (ID).

Spreadsheets, however, are cumbersome when it comes to handling PII, including IDs and transaction histories.

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Spreadsheets are DeadWhen do compliance officers use spreadsheets for transaction monitoring?

When monitoring transactions, FIs must capture sender & receiver PII, as well as the amount and time.

This information helps FIs understand who their customers are, and helps with qualifying ‘suspicious behavior’.

However, monitoring transactions and creating rules in spreadsheets is highly labor-intensive and not acceptable by most state regulators.

Finally, as the volume of transactions increases, this function becomes impossible to run efficiently in spreadsheets.


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Spreadsheets are DeadWhen do compliance officers use spreadsheets for fraud prevention?

Analysts use spreadsheets for seeing large amounts of data to draw patterns that can lead to new rules.

Spreadsheets cannot easily provide the visuals necessary to spot patterns, identify risk factors, or classify users.

In the event of a fraud attack when quick responses are needed, spreadsheets do not allow for fast reactions.Fraud

Prevention

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Spreadsheets are Dead

Multi-Jurisdiction Complexity

Managing a global operation is no longer a problem exclusive to large global institutions. FinTech has opened the door for small companies to sell anywhere in the world as well.

The opportunity to grow quickly brings the challenge of complying with multiple sets of regulations. Regulatory and risk frameworks differ across jurisdictions, creating further complexity in manual efforts.

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Spreadsheets are DeadOther Disadvantages

1. Data outside systems can be easily lost or compromised, a huge regulatory risk (GDPR, security breach notification)

2. Data outside systems can be easily manipulated (useful for analysis, but also poses risks)

3. Susceptible to human errors4. Lack of version control, not designed for

collaborative work5. May not be physically accessible in case of

emergency6. Scales poorly

Data held in spreadsheets will not provide confidence during a regulatory examination

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Benefits of RegTech

Automation Recording & Reporting

Real-TimeInformation

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Benefits of RegTech

Automation

Integrating a RegTech solution automates data capture and processing into one platform. This means that transaction data and KYC information is automatically recorded, freeing analysts to spend time on cases, not pivot tables.

Multi-jurisdiction operations become manageable as KYC and Transaction Monitoring requirements are set for each geography.

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Benefits of RegTech

Case management means that notes can be shared within a team, leading to pre-populated reports that can be automatically generated and sent to regulatory agencies. Access to sensitive data can be adjusted by team member.

When reporting to examiners, analysts can be confident of finding all the relevant information and that the data is correct.

Recording & Reporting

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Benefits of RegTech


The platform addresses issues with version control, and the centralized real-time information it makes available means that analysts can have an up-to-date view, with the ability to focus on the information that is important to them when detecting fraud.

This means financial institutions can build risk-based approaches, customizing the user experience based on the fullest set of data possible.

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Benefits of RegTech

KYC: ICOs

AutomationRecording & Reporting


Risk-Based Approach Data Security Risk All KYC Data In One Place

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Benefits of RegTech

KYC: ICOs

Automation

Risk-Based Approach

When launching an ICO, a process has to be in place to perform KYC for people from potentially over 100 countries, with a huge variance in transaction amounts, all as quickly as possible.

Our platform performs the correct KYC regardless of customer or company jurisdiction.

Higher risk contributors can automatically be put through enhanced due-diligence.

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Benefits of RegTech

KYC: ICOsRecording & Reporting

Data Security Risk

The platform keeps a record of every potential sign-up, what tests were run, and what the results were.

Information can be exported via API, which avoids the risk of having KYC data on a spreadsheet on a sole machine, which could be lost or accidentally sent out.

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Benefits of RegTech

KYC: ICOsReal-TimeInformation

All KYC Data In One Place

Customers expect a quick onboarding process from ICOs and a failure to do so can cause a bad impression.

Having real-time information driving aresponsive escalation process allows KYC to be performed quickly and with better results.

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Benefits of RegTech

KYC: ICOsWe have built a plug-in tool for ICO KYC. By copy/pasting 45 lines of code, information is automatically sent to IdentityMind, no integration required.

The results update in real-time, and the system displays the results of all the security tests which were run. Case Management also exists with notes and attachments available.

All of this can be shown to regulators to prove you’ve done the right thing.

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Benefits of RegTech

Transaction Monitoring - MSBs



Jurisdictional Rule-set Avoid Regulatory Enforcement Actions

All Customer Datain One Place

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Benefits of RegTech


Automation

Jurisdictional Rule-set

The limited usefulness of spreadsheets is most apparent when we consider the case of AML transaction monitoring.

Even within the US, an MSB needs to ensure they are catching the regulatory variations across states. Running an international operation requires tracking regulations, what rules apply when, not to mention exchange rates.

Using a RegTech platform automates almost all of this, only leaving alerted transactions for manual review.

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Benefits of RegTech

Transaction Monitoring - MSBsRecording & Reporting

Avoid Regulatory Enforcement Actions

We have seen regulators issuing findings and fines for MSBs using spreadsheets for transaction monitoring. Data in this format does not provide the information they expect to see alongside the transaction data, such as timestamps, associated KYC data, and a unified system.

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Benefits of RegTech



All Customer Datain One Place

Having all the information in one system means that it is easy to trace customers from the initial onboarding to every subsequent transaction. Based on alerts, a case can be created and a SAR can be filed.

Because everything is tracked, you know which agents at your institution performed what actions and when.

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Benefits of RegTech


The platform allows granular configuration of alert parameters, for example by geographies and risk profiles, with transactions entering a queue when flagged.

We provide multiple ways for analysts to examine their transactions, such as a graphical comparison of a user’s activity against a peer’s over time.

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Benefits of RegTech



Sorting large data sets

“Building reports shouldn’t be this

hard” Reactive vs Proactive

Fraud Prevention: Payments

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Benefits of RegTech


Automation

Sorting large data sets

Fraud analysts love to export data to spreadsheets and manipulate it with pivot tables, but you cannot get that new data back into your system.

Instead of keeping track of multiple tabs and spreadsheets that are close to their maximum size, using our platform lets you work with your dataset inside the system, whether your volume is 1,000 or 10,000,000 transactions a day.

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Benefits of RegTech

Fraud Prevention: PaymentsBuilding reports is critical to prevent fraud and report information upwards, and analysts need to pull a lot of information to do their jobs.

A single platform makes it easier to gather and filter the information needed, calling up transactions between a certain amount, or see what has been flagged with certain risk elements or tags.

Recording & Reporting

“Building reports shouldn’t be this

hard”

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Benefits of RegTech

Fraud Prevention: PaymentsInstead of only creating new rules in reaction to fraud losses, technology like machine learning can be used to stay ahead of fraudsters.

RegTech enables fraud analysts to anticipate potential risks by monitoring risk factors, track chargeback behavior, and shows you the customers who are connected to known bad users.


Reactive vs Proactive

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Benefits of RegTech


Each transaction on the IdentityMind platform can be opened to display additional information, displaying information in a format configurable by analysts.

The entity graph shows the connections between key attributes and provides an associated reputation score. From a fraud perspective, larger graphs with more links may be more risky.

The panels showing historical behavior, the distance between street and IP address, and what rules fired provide extra context.

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Benefits of RegTechBitcoin Exchange -



Onboarding, Monitoring,and Fraud

Reports that SpanTransaction Types

All the Information You Need, In One Place

These benefits all came together with a client of ours, a large bitcoin exchange who had a risk and compliance team of one who used our

platform and was able to pass state and Federal audit

KYC, Transaction Monitoring & Fraud Prevention

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Benefits of the IDM Platform

Automation Recording & Reporting


DigitalIdentities

API Third PartyEcosystem

Other RegTechSolutions

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DigitalIdentities

Trusted Digital identities form the foundation of IdentityMind’s platform.

Trusted Digital identities (TDIs) are entities that perform transactions online, and that you want to do business with. These entities may be individuals, businesses, affiliates, and others. TDIs combine an individual’s digital activity with real world, static information.

It validates that individuals are a real identity, are allowed to use the presented information, are not affiliated with untrusted entities, and do not pose a risk for your business.

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API

Third PartyEcosystem

The core technology can also be accessed through an API if there is already a risk and compliance system in place.

Our Third Party ecosystem allows you to benefit from 20+ more data sources, all through a single API, and a single contract.

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Spreadsheets are Dead, Long Live Spreadsheets

Know Your Customer


Fraud Prevention

Spreadsheets are an ubiquitous tool, but generate a lot of issues when relied on as a compliance and fraud prevention tool. Transitioning to a platform like ours lets you run your compliance and fraud operations more quickly and securely.

webinar key takeaways from our - identitymind · spreadsheets are dead, long live spreadsheets know...

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