Open Password – Monday November 22nd, 2021
#1001
CRIFBÜRGEL – CRIF – Deltavista – Risk Management Solutions – DACH Region – Frank Schlein – B2B2C Identification – Holistic Customer Experience – Ecosystem Approach – Pandemic – Carlo Gherardi – Fin Tech and Insur Tech Businesses – BIIA – Google – University of Halle-Wittenberg – Yandex – Corona and society – lateral thinkers – internet users – University of Hohenheim – Tilman Klawier – Fabian Prochazka – disorientation – invisibility – trust – left-right spectrum – Corona – media use – Telegram – Federal Government
- Title
Digitalization of “Know Your Customer” processes: Trends in the KYC market – simplifying KYC checks in digital workflow steps – By Salvatore Saporito
- Economic information
CRIFBÜRGEL Is Changing its Name to CRIF – A Reflection of a New Strategy
III. Health information
Don’t trust Google and Yandex
- Corona and society
Anatomy of lateral thinkers and their sympathizers – pessimistic, critical of the system and disoriented
Digitalization of
“Know Your Customer” processes
Trends in the KYC market –
Simplify KYC checks in digital workflow steps
By Salvatore Saporito*
The digitization of almost all professional processes, including the digitization of the KYC process, is becoming increasingly important and increasingly urgent. Digitalization makes KYC checks efficient and supports legally required due diligence obligations. These are intended to prevent money laundering and terrorist financing. Of central importance for the KYC process are reliable data and documents that are regulatory compliant and minimize the validation effort for the groups of parties obliged to do so under the Money Laundering Act.
Know Your Customer ( https://www.validatis.de/kyc-process/news-fachwissen/kyc-know-your-customer/?utm_source=password-online.de&utm_medium=referral&utm_campaign=partner&utm_id=fa-kyc ), in German : “Know your customer” means identifying and checking new and existing customers to see whether they meet the requirements of money laundering law. A KYC check helps to identify fake companies and uncover funds from questionable sources. It is important to clarify whether the beneficial owners have investments and other connections to companies that pose a risk.
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Trends in the KYC market
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As regulatory requirements continue to increase, KYC processes are becoming more complex. What is the best way to keep the financial, time and personnel effort in the KYC process within limits? Digital workflow tools as well as digitized process steps help reduce effort. Instruments that provide a valid database and are based on the needs of the obligated groups have a promising future in the KYC market. The central features of the database must be reliability and security in order to achieve a realistic risk assessment in the KYC verification process.
Artificial intelligence (AI) and machine learning (ML) technologies can help check and verify the identity of customers and also recognize patterns. The use of instruments based on these technologies cannot be avoided when combating money laundering and terrorist financing. However, these can only be used sensibly if the database has been prepared accordingly beforehand and new insights have thus been made possible.
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Simplify KYC verification in digital workflow steps
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In the event of a large volume of remediation and onboarding cases being examined, companies should pursue a largely digitalized, risk-based approach. This is particularly true for KYC checks on low or medium risk customers.
- The use of end-to-end digital KYC verification processes makes it possible to achieve the common goal of preventing the misuse of the financial system for the purposes of money laundering and terrorist financing.
- KYC should be standard and an integral part of a comprehensive due diligence in the compliance management process to prevent money laundering, terrorist financing and counteract further economic crime.
Digital KYC processes that are precisely tailored to the requirements of the obliged entity and are based on a valid database help to fulfill due diligence obligations with the least possible effort.
The automated determination of the following data is essential for the efficiency of the KYC check process and the minimization of liability risks:
- Identification of the contractual partner
Contractual partners must be identified using information from public registers. See Section 11 Paragraph 4 GwG. The identity check must be carried out on the basis of an official register extract. See Section 12 Paragraph 2 GwG.
- Identification of representative bodies
All persons acting on behalf of the contractual partner must be identified and checked in the KYC process. See Section 10 Paragraph 1 GwG.
- Determination of ownership
- Determination of the beneficial owner
The focus of the KYC check is on clarifying and identifying beneficial owners. See Section 10 Paragraph 1 GwG.
- Risk assessment
The examination of the risk factors, cf. Section 5 Paragraph 1 GwG, the clarification of the PEP status of the beneficial owners, cf. Section 10 Paragraph 1 GwG, and the risk assessment, cf. Section 5 Paragraph 1 GwG, are an indispensable part the KYC check
- Careful and audit-proof documentation of the KYC check.
All relevant information and documents regarding contractual partners, representative bodies and beneficial owners must be recorded and retained for five years. See Section 8 GwG.
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Digital Fit Meets Regulatory Fit.
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In addition, the mapping of company information from “primary sources” in particular provides the obligated groups with a particular cost and efficiency advantage.
In a purely digital KYC process, the obligated party receives regulatory-compliant information content through direct purchase of primary sources and their integration with corresponding data, so that the internal validation process is much more efficient. In the end, a lean, digitally efficient and regulatory-compliant KYC process is achieved – digital fit meets regulatory fit.
The following points are crucial for the selection and introduction of completely digitalized KYC processes:
- Is the KYC data used valid and up-to-date?
- Does data collection rely on primary sources and is access documented?
- Do all digitized workflow steps cover the entire KYC verification process?
Only if these criteria are met can high process costs be sustainably reduced and can it be ensured that the KYC check is compliant with regulations and that the liability risk for the obligated party is minimized.
*Salvatore Saporito is Managing Director at Validatis, an independent division of the Bundesanzeiger Verlag (Cologne).
(University of Business Information
CRIFBÜRGEL Is Changing its Name to CRIF
A Reflection of a New Strategy
(BIIA) Founded in 2016 from the merger between Bürgel Wirtschaftsinformation, a company with a track record of more than 130 years, and Deltavista, a specialist in risk management solutions, CRIFBÜRGEL has refocused its service portfolio in recent years and launched numerous innovations on the market. The time was therefore right to redefine the company’s positioning, and changing the company name was the logical consequence. This aligns the name of the operating base in Germany more closely with the globally operating group and for the first time creates a uniform brand for the entire DACH region together with the locations in Austria and Switzerland.
“When it comes to information services, it is becoming increasingly important to think and work across borders. With the new name, we are clearly demonstrating that we have the necessary networking capabilities to do this,” explains CRIF GmbH Managing Director Dr Frank Schlein. “We are using this step as an opportunity to reposition ourselves as a partner for end-to-end digital customer journey management with the help of integrated B2B2C identification, credit risk and fraud prevention solutions from a single source.”
In the future, CRIF in Germany will take an even more integrated approach to identification, credit risk and fraud management with the aim to create a holistic customer experience along the entire customer journey. Information on private individuals and corporate customers is made available in a flexibly combinable range of services. Through an actively implemented ecosystem approach, the solution portfolio is enhanced by first-class services from external partners and service providers. Instead of multiple interfaces, all platforms are integrated into a common user space with the help of so-called APIs. Furthermore, greater emphasis is given to the analytical expertise and personal advisory services provided by CRIF
experts.
“With this offering, it is our aim to associate our new name from the outlet with an exceptional range of services,” continues Dr Schlein, describing the background to the strategy. “CRIF is the only service provider on the German market currently able to offer this combined added value from a single source.” This positioning is underscored by the many innovations CRIF has launched on the market in the past two years in particular, whether in the area of digital onboarding, open banking, compliance or ESG. A large number of new customers in this highly competitive market confirm that the solutions offer the right answers to the current challenges faced by corporates and financial institutions.
“Despite the pandemic, CRIF has accelerated the expansion of both its traditional suite of information solutions and of its range of innovative services. In this regard, the considerable investments made over the years to develop advanced digital and open banking solutions and to diversify activities on a global level are enabling us to consolidate our positioning,” comments Carlo Gherardi, CEO of CRIF. “Moreover, in addition to the acquisition and partnership program that over the years has allowed the company to develop its ecosystem of innovative end-to-end solutions, in the last year CRIF launched an ambitious start-up acceleration project aimed at developing synergies with FinTech and InsurTech businesses in a number of countries, including Germany. Thanks to this strategy and the strong commitment to serving the financial industry through a data-driven approach, state-of-the-art technology, and a strong propensity for innovation, for the ninth consecutive year CRIF has been included in the prestigious top 100 IDC FinTech Ranking on a global level.”
BIIA (Hong Kong) is the international partner of Open Password.
Health Information
Don’t trust Google and Yandex
(University of Halle-Wittenberg) The search engines Google and the Russian Yandex are not reliable sources of health information. Often the small snippets of text that are displayed as previews for search results contain incorrect or inadequate information.
The information on home remedies or so-called alternative treatment options is particularly problematic, as researchers at the Martin Luther University Halle-Wittenberg (MLU) and the Ural Federal University in Russia have discovered. They therefore advocate clearer warnings about possible health risks.
Corona and society
Anatomy of lateral thinkers and their sympathizers: Pessimistic,
critical of the system and disoriented
(University of Hohenheim) Only twelve percent of German internet users understand the lateral thinkers, around three quarters are rather negative towards the protest movement. This is shown by a representative online survey conducted by the University of Hohenheim in Stuttgart among just over 2,000 Internet users. Those who sympathize with the lateral thinkers are more aligned with the right-wing political spectrum and consider the German social and political system to be unfair. They also believe that they can exercise little political influence, have little trust in politics, journalism and science, and they see their economic future threatened. They get more information on social media than other internet users.
Many people who criticize the Corona measures gather in so-called “lateral thinkers” groups. They feel their freedom is restricted and are protesting nationwide against the measures taken to contain the pandemic. They not only demand the immediate lifting of all measures, but also criticize the political system itself.
Who are the people who sympathize with these groups and what are their attitudes and beliefs? Tilman Klawier and Dr. Fabian Prochazka works at the University of Hohenheim. In their representative online survey in spring 2021, just over 2,000 Internet users commented on their attitudes and understanding of the “lateral thinkers” protests. _____________________________________________________
Pessimistic view of the economic situation, critical of the system and lacking direction
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There are hardly any differences to the average population according to gender and age groups. But “among them we find a disproportionate number of people who are rather pessimistic about both their own and Germany’s economic future,” says Klavier, summarizing one of the results of the study. “40 percent assume that their economic situation will worsen. Of all respondents, this is only 28 percent.”
There is a great feeling of disorientation and incomprehensibility of social developments among those surveyed. They view the political and social system rather critically. There is also a strong feeling of disorientation.
“So it didn’t surprise us that these people tend to have less trust in science, politics and journalism,” says Prochazka, “with trust in politicians being particularly low. Although lateral thinker sympathizers more often believe that they understand political processes, they see themselves as less able to exert influence.”
People who sympathize with lateral thinkers are significantly more likely to place themselves on the right of the political center than the total number of Internet users surveyed. In contrast, the left edge of the political spectrum is somewhat less pronounced among the lateral thinker sympathizers. AfD voters are the most strongly represented among them, while voters from the Union parties, the SPD and the Greens are underrepresented. “But almost every fourth person who sympathizes with the lateral thinkers cannot or does not want to place themselves in the left-right spectrum.”_______________________________________________________
The view of the lateral thinker sympathizers on Corona
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Lateral thinker sympathizers are significantly less willing to be vaccinated against COVID-19. Conversely, not all people who show understanding for the lateral thinkers reject vaccination. At least 15 percent of them showed a high willingness to be vaccinated, another 14 percent were undecided. Likewise, not all people who are unwilling to vaccinate express understanding for the lateral thinkers.
The belief that Corona is no worse than the flu and that mouth and nose masks are harmful to people is particularly pronounced among those who sympathize with lateral thinkers compared to all Internet users. Statements such as “The corona vaccination is intended to implant microchips in people” and “5G masts spread the coronavirus” also find little approval among them. However, belief in supernatural powers and spiritual experiences is somewhat more pronounced among lateral thinker sympathizers than on average among all respondents. _____________________________________________________
The role of the media_________________________________________________________
Lateral thinker sympathizers use television, newspapers and news websites less often than all Internet users surveyed. However, they often find out more about political events on social media. The instant messaging service Telegram in particular serves as a news channel here. Other media offerings that reported critically on the government’s protective measures during the corona pandemic are significantly better known among lateral thinker sympathizers compared to the general population, but the proportion of users is still relatively small. Likewise, only a minority follow people on social media who publicly express fundamental criticism of the federal government’s Corona protection measures. More at: https://www.uni-hohenheim.de/Expertenliste-corona-kritik
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