We sat down with the Chief Risk and Compliance Officer at Holvi, a leading digital banking service for freelancers and small businesses, to discuss fraud, compliance, and the strategies needed to stay ahead in an evolving financial landscape.
As an avid sailor, René knows that navigating risks is all about reading the conditions, adjusting course and staying prepared for unpredictable challenges.
“There’s no business without risk – it’s just part of the game,” says René. And in the financial industry, it’s a high-stakes game with ever-changing rules, where the cost of losing is staggering. In fact, $1.03 trillion was lost to scams globally in 2024 and between €715 billion and €1.87 trillion of global GDP is tainted by money laundering each year – an amount so massive it rivals the economy of entire countries like Italy or Switzerland.
The risk is not just a challenge, but an existential threat that can erode customer trust, destroy businesses and fuel further crime. Every laundered euro is not just a loss on a balance sheet, but also in human lives, as it funds human trafficking, terrorism, drug trade and more, devastating real lives of entire communities.
Plus, the opponents are relentless – always innovative, mastering the art of exploiting vulnerable individuals through psychological manipulation and constantly finding new attack techniques – even as regulations tighten. “In this era, new fraud patterns arise and disappear faster than static processes and systems can evolve,” René explain. Traditional fraud prevention simply can’t keep up. Especially now with the rise of AI-driven fraud and synthetic identities, it’s like racing against a fleet of expert sailors in ever-changing winds. The right strategy isn’t just about reacting to sudden gusts, but about reading the conditions, adjusting sails early, and maintaining an edge to stay ahead of the competition. For René, the only way forward is to fight fire with fire, with “detection and analysis capabilities needing to make use for the same technology” in order to keep pace and eventually overtake malicious actors.
For René, the key to success isn’t eliminating risk – it’s managing it. “You need to see the full picture, not just individual threats. Some risks are worth taking, while others need to be mitigated.”
Just as in a regatta, where a sailor may take a longer route to catch the best wind or make tactical manoeuvres to gain an advantage, navigating risk in finance means knowing when to hold steady and when to change course. So, there’s always a trade-off: security versus customer experience, compliance versus agility; “Balancing security with a smooth customer experience is always a challenge, especially in a regulated industry,” René acknowledges.
Some friction is unavoidable, but what matters is how we handle it – making sure it’s transparent and makes sense to the customer.
René Hofer, Chief Risk and Compliance Officer at Holvi.
In fact, friction can sometimes be positive, as it can reassure customers that the process is thorough. And research shows that when friction enables decisions, customer satisfaction can improve. Ultimately, this approach ensures that the balance between efficiency and trust is maintained. “At the end of the day, safety comes first. There’s no way around that,” says René.
This challenge is further complicated by a fragmented regulatory landscape. Even within the European Union there are countries like Germany enforcing strict regulatory measures under the GDPR and AML directives while other countries such as Ireland offer more flexible interpretations of these rules. “Honestly, it’s frustrating,” René admits. “Identity verification should be standardized, but it’s not – so we work with flexible solutions that adapt to local requirements without adding unnecessary complexity for customers.”
Staying ahead of evolving regulations is like sailing in unpredictable waters – you don’t always know when the wind will shift, but you must be ready to adjust your sails. Only those who anticipate changes and prepare accordingly will keep moving forward instead of being caught adrift. “It’s about being informed and ready to adapt,” says René. “You can’t predict every regulatory change, but you can build a system that adapts. That means staying ahead of trends, designing flexible processes, and making compliance part of everyday decision-making.”
Businesses must leverage technology and the expertise behind it, with software providers acting as key teammates in staying connected with regulatory bodies for timely product updates. “We rely on tech, strong data sources, and – most importantly – people who know how to interpret and act on that information. Regulations will always change, so the best approach is to embed flexibility into how we operate rather than treating compliance as something we “catch up on” later.”
Despite these challenges, René remains optimistic. The financial industry, regulators and businesses all share the same mission: securing a trustworthy financial ecosystem. The key is collaboration. “If you demand adaptability, show that you’re willing to adapt, too,” he advises. “Engage early, share insights and build relationships based on transparency.”
The challenge of risk and compliance is never over, and the conditions will always shift. But as René puts it, the real question isn’t whether businesses can avoid rough seas – it’s whether they’re charting a course for success or just trying to stay afloat.
We sit down with an Indian pioneer of forensic analysis to discuss the country’s most common scams, the successes and limitations of the world’s largest biometric ID system, andwhy it’s unfair to refer to Kolkata as the call center scam capital of the world.
Back in 2005, when Mayur Joshi founded Indiaforensic – India’s first training and educational hub focused on financial crime investigation – the concept of forensic accounting was relatively unknown in the country.
Despite this, Mayur knew that due to increasing rates of financial fraud and India’s lack of domestic fraud prevention specialists, the launch was essential.
“The initial reaction to the launch was mixed and met with both curiosity and skepticism due to the novelty of the concept. However, as financial fraud became increasingly sophisticated and prevalent in India, the need for specialized education became clear,” said Mayur.
Twenty years later, Indiaforensic has over 5,000 members from a range of industries, including the public sector, non-banking financial companies, payment aggregators, cooperative banks, multinational banks operating in India, fintech companies, fraud control teams, chartered accountancy firms, telecom companies and retail organizations.
In this interview, we discuss India’s most common compliance mistakes, the role that technology plays in the proliferation and prevention of new fraud attacks, the importance of enabling organizations to combat financial crime and maintain robust compliance standards, and much more.
What would you say are the 3 most common compliance mistakes that organizations make in India?
The three most common compliance mistakes made by organizations in India, particularly within the financial services, are:
Inadequate training: One of the most significant gaps in India’s compliance sector is the lack of advanced training for employees. Many compliance professionals are trained primarily in basic Know Your Customer (KYC) regulations, but advanced topics like sanctions compliance and Trade-Based Money Laundering (TBML) often remain underexplored. This results in a narrow understanding of the broader compliance landscape, making it difficult for employees to effectively handle more complex issues like international sanctions or intricate financial crime patterns. Without comprehensive training, compliance teams are not equipped to address the evolving and multifaceted challenges of global financial crime.
Inadequate testing: A major issue in the Indian compliance sector is the proliferation of certification courses that fail to adequately test the knowledge and skills of participants. While these certifications may appear beneficial, the lack of rigorous testing means that compliance professionals may not be fully prepared to handle real-world scenarios. This becomes particularly problematic in high-stake situations, such as when an organization is under regulatory scrutiny or when dealing with complex fraud cases. The absence of practical assessments during training means that employees may struggle to apply their knowledge effectively in critical situations, leading to costly errors or regulatory breaches.
Inadequate due diligence: A common mistake in compliance practices is an over-reliance on databases to conduct due diligence, often at the expense of more in-depth investigative skills. While database searches are essential, they don’t always provide the full picture. Compliance teams may fail to connect the dots or identify red flags that are not present in the databases but can be uncovered through a more thorough investigation. This could include deeper inquiries into the business relationships, transaction histories, or risk profiles of clients or partners.
Failing to conduct comprehensive due diligence can leave organizations exposed to financial crimes like money laundering, fraud or terrorist financing.
How about financial crime, what trends are you seeing right now?
In India, digital fraud has rapidly emerged as one of the most common forms of financial crime, driven by the increasing use of digital payments and online platforms. United Payments Interface (UPI) fraud is a major concern, where fraudsters trick victims into sharing their UPI credentials or One Time Passwords (OTPs) through fake links or impersonation.
Similarly, OTP fraud, often enabled by SIM card swapping or phishing attacks, allows criminals to intercept OTPs and complete unauthorized transactions. Fraudsters also exploit digital payment systems by manipulating payment gateways or using fake payment links to steal users’ financial details. Phishing attacks, where fraudsters impersonate legitimate organizations to steal sensitive information, have also seen significant growth.
Another concerning trend is the rise of SIM card swapping, where criminals gain control of a victim’s mobile number to intercept OTPs and access bank accounts or payment platforms. Digital blackmail or fake arrests are also becoming common, with fraudsters using threats to extort money or personal details from victims. Fake job offers and investment scams, especially involving cryptocurrency or high-return schemes, have targeted individuals looking for employment or investment opportunities.
These forms of digital fraud highlight the need for stronger cybersecurity, increased public awareness and more robust regulations to protect against emerging financial crimes.
The delay in prosecuting financial fraud cases in India can be attributed to several factors, including the overburdened judicial system, complex legal procedures and resource constraints. The Indian legal system is often slow due to the sheer volume of pending cases, which leads to prolonged trial timelines. Additionally, financial fraud cases are inherently complex, involving intricate details that require meticulous investigation, expert testimony and specialized knowledge, all of which can delay the process. Moreover, a lack of adequate resources and skilled personnel in investigative agencies can contribute to the inefficiency in handling cases.
To speed up the prosecution process, India could benefit from establishing specialized courts focused on financial crime, allowing for more efficient and faster trials. Capacity building for law enforcement agencies, including providing training on financial fraud detection and investigation, would also help improve case resolution. Legal reforms that streamline procedures and introduce stricter timelines for trial completion could further expedite the judicial process. Enhanced coordination between financial institutions, law enforcement and regulatory bodies would also ensure quicker identification and prosecution of fraudsters. These measures would significantly reduce delays and improve the overall effectiveness of the judicial system in tackling financial fraud.
Building trust through KYC in banking.
How can you set up a KYC process that satisfies your customers, fights fraud and meets regulatory requirements? Download now to discover:
What do you say to those who claim that India, and Kolkata specifically, is the call center scam capital of the world. Is this fair? If so, why do you think this is? What steps can be taken to tackle it?
Labeling Kolkata as the ‘call center scam capital’ is an unfair generalization. While some fraudulent call center operations have been uncovered in India, it overlooks the vast number of legitimate call centers that operate ethically and serve various industries globally.
Kolkata, being a significant hub for business process outsourcing and call centers, does have a higher concentration of such operations, but I guess it’s not alone. These operations are spread throughout all major metro cities, including Ahmedabad, Bengaluru, Chennai, Mumbai, Noida, Gurugram and Pune. Fraudulent operations are conducted by a small minority of unscrupulous individuals, and they do not represent the entirety of the industry.
What are some of the main 2025 financial crime trends in India? What part does technology play in both the proliferation and prevention of new fraud attacks?
In 2025, digital fraud is expected to see significant growth in India, largely driven by the increasing reliance on digital platforms and online transactions. Traditional fraud is being rapidly replaced by tech-enabled scams, with fraudsters leveraging advancements in technology to exploit vulnerabilities in digital payment systems, mobile apps and social media platforms. This shift is particularly evident in areas such as UPI fraud, OTP phishing and identity theft, which have become increasingly sophisticated with the use of tools like malware and social engineering techniques.
The rise of cryptocurrency also opens new avenues for fraudsters to manipulate digital assets and launder illicit funds, posing a significant challenge to regulatory bodies.
Social media platforms and the rise of ‘finfluencers’ — social media influencers focusing on financial advice — are expected to play a larger role in perpetrating fraudulent activities. With their widespread influence, finfluencers could be used to promote fraudulent schemes or investment opportunities, often without proper scrutiny or regulation. These influencers, who have large followings, may inadvertently or intentionally contribute to scams such as Ponzi schemes, fake investment platforms, or high-risk financial products that target unsuspecting investors.
India lays claim to the world’s largest biometric ID system. What would you say are some of Aadhaar’s greatest successes and conversely weaknesses/ limitations since launch?
One of its greatest accomplishments is its role in financial inclusion, enabling millions of people in rural and remote areas to access banking services. It is also one of the best tools in performing e-KYC. With Aadhaar, users can be onboarded in minutes. Plus, by linking Aadhaar to various government welfare schemes, subsidies and services, it has helped reduce corruption and leakages, ensuring that benefits reach the intended beneficiaries directly. The system has also facilitated the streamlining of processes, such as tax filings and identity verification, making them faster and more efficient.
However, one of the major concerns is its privacy implications. The vast amount of sensitive personal data collected for Aadhaar, including fingerprints, iris scans, and demographic information, has raised questions about the potential security and misuse of such data.
By extension, what role does identity verification and KYC technology play in the fight against fraud? What do you see as the limitations/ threats to their efficacy?
Identity verification and KYC technology plays a crucial role in the fight against fraud, acting as the first line of defense for financial institutions and businesses.
By accurately confirming the identity of individuals or entities before they can access services, identity verification and KYC technologies help prevent fraudsters from exploiting financial systems. For example, biometric systems, such as facial recognition or fingerprint scans, along with document verification tools, make it harder for fraudsters to impersonate others and gain unauthorized access to bank accounts, loans, or other services. KYC technologies also help institutions assess the risk associated with a customer, ensuring they are not unknowingly facilitating money laundering or financing illegal activities. Indiaforensic offers the certification program in KYC, which is one of the most exhaustive programs guiding the students about the use of regtech in KYC.
However, while these technologies have certainly strengthened fraud prevention, they are not without their limitations. One major challenge is the growing sophistication of fraud techniques. Fraudsters are increasingly using advanced methods like deepfakes or synthetic identities, which can bypass even the most robust identity verification systems. Another limitation is the reliance on databases and digital records, which may not be completely accurate or up-to-date, allowing some fraudulent identities to slip through the cracks.
Additionally, the increasing use of digital platforms has led to concerns about data security and privacy. If the data used for KYC processes is not securely stored or transmitted, it could be vulnerable to breaches, exposing customers’ sensitive information to cybercriminals. To maintain the efficacy of identity verification and KYC technologies, ongoing advancements in security measures, continuous updates to databases, and proactive monitoring for new fraud tactics are essential.
If you’re interested in more insights from industry insiders and thought leaders from the world of fraud and fraud prevention, check out one of our interviews from our Spotlight Interview series below.
IDnow sits down with Brandi Reynolds, CAMS-Audit, CCI, CCCE at Bates Group to discuss what traditional banks can learn from crypto asset providers, and the unlikely role of blockchain technology.
What are some of the unique challenges that financial institutions must face in developing an effective compliance program for cryptocurrency?
Financial institutions must take steps to understand the unique AML and compliance risks associated with cryptocurrency, especially around transaction monitoring rulesets and the fragmented regulatory landscape.
Would you advise financial institutions tackle cryptocurrency separately, or attempt to bring crypto into the fold of an existing compliance program?
Crypto will require unique policies and procedures, especially around transaction monitoring, but it can be incorporated into an existing compliance program. However, this is contingent on the types of products and services being offered – for instance, a crypto product which includes both traditional (fiat) as well as digital assets may be able to draw on elements of an existing compliance program, but a product that is purely digital will likely require, at minimum, an expansion of policies and procedures to address its specific risks.
What is your opinion on the pace of the global development of regulations and compliance best practices, as they relate to cryptocurrency?
The pace of regulations and best practices is irregular and fragmented, since the development of regulations is proceeding at radically different pace across the globe, and even within individual countries (such as the varying levels of state-specific regulations in the US)
Is there a particular region, or country that you would consider further along in its journey toward offering a safe and compliant regulatory framework for cryptocurrency?
Singapore and Estonia represent the most developed and stable regulatory frameworks globally. Within the US, while the regime is strict, the New York BitLicense represents the most well-developed regulatory framework for cryptocurrency, to the point where other states such as California are using it as the basis for their own comprehensive regulations.
If a financial institution was deliberating as to whether to either accept, or launch a crypto trading platform, what would you say are three major advantages (rewards) and three challenges (risks) of doing so?
The three main advantages would be: large amount of available potential investor capital, expanding use cases and user base for crypto products and services, and the diversification of investments and revenue streams.
For disadvantages, I would say: increased regulatory scrutiny, highly volatile markets with a high risk of business failure, and increased exposure to AML and fraud risks.
How important is the role of technology, and in particular KYC onboarding platforms, in enabling crypto firms to offer a safe and secure crypto customer experience?
Technology is critical for operating a risk-based crypto compliance program. In particular, blockchain monitoring software, which allows firms to risk rank wallet addresses and analyze their transaction activity, is becoming de facto required by regulators.
Blockchain monitoring should be incorporated into the KYC process and should be seen as essential as practices such as collecting and verifying a photo ID.
Brandi Reynolds, CAMS-Audit, CCI, CCCE at Bates Group
Are there any things you think the traditional banking sector could learn from the crypto space regarding best compliance and anti-money laundering practices?
The use of the blockchain as a recordkeeping system is revolutionary from a compliance standpoint, in that it allows a firm to instantly trace the movement of cryptocurrency through every wallet address it has ever interacted with. This makes identifying exposure to sanctioned, criminal, or high-risk entities much easier than in the traditional financial system, where a similar investigation could take months if not years. Thus, while crypto may have a higher inherent risk of being exploited by bad actors, this is offset by the ability to more easily identify suspicious activity on the blockchain.
With so many different rules and regulations pertaining to cryptocurrency across the world, how can financial institutions ensure they continue to operate compliantly and adhere to KYC best practices?
Financial institutions should carefully consider the types of crypto products they would like to offer and assess their inherent risk, including their customer bases’. This should include an assessment of the jurisdictions where the products would be offered and associated regulatory risks and requirements.
How would you assess the MiCA regulatory framework? Does it go far enough? Are there any glaring loopholes, or omissions?
It’s still too early in the development process to assess its impact.
While MiCA will apply to all member states of the EU, there is no requirement that it be implemented at the level of national law, which presents potential restrictions on the passporting of licensing through the EU.
Brandi Reynolds, CAMS-Audit, CCI, CCCE at Bates Group
It may also present additional regulatory burdens on firms due to its emphasis on consumer protection. However, MiCA will present a unified framework which will greatly simplify other aspects of regulatory compliance.
As the UK is no longer part of the EU, and therefore subject to its AML and crypto regulatory requirements [especially MiCA], would you say this puts UK crypto shops, and UK crypto consumers at an advantage or disadvantage?
There is a disadvantage in that UK crypto firms must pursue two tracks of regulatory registration and approval, one in the UK and one in an EU country. This increases the regulatory burdens on firms as they must comply with two distinct sets of regulations and increases the possibility of conflict between regulations, especially given that the UK is currently considering regulatory changes.
IDnow sits down with David Gyori, CEO of Banking Reports to discuss upcoming trends in fintech, the importance ofmulti-jurisdictional solutions, and why the current state of crypto reminds him of the 17th century tulip mania crisis.
As a fintech consultant and thought leader, what first attracted you to the industry, and how have you seen the world of fintech change since you first became involved?
So, the most beautiful thing about financial technology is that bankers and experts around the world underestimate the complexity of it. Fintech is about payments technology; new channels like augmented reality, virtual reality; all the regulatory issues, including eKYC, AML, onboarding; wealth tech, wealth management, including open banking, access to account, asset tokenization, decentralized currencies, roboadvisors, personal financial dashboards, data tech, big data, AI, machine learning, neo banks, core banking technology, and even quantum finance, which is an upcoming new arena within financial technology. So, from POS innovation to central bank digital currencies (CBDC) from video banking to virtual reality, and metaverse, it’s more diverse, more complex [than people think].
And this complexity attracted me.
You are the CEO of Banking Reports London, which provides fintech training for retail and investment banks; what types of subjects and themes are covered in the course?
My training programs deal with strategy and tactics of digital transformation, financial technology, and emerging innovation in banking all around the world. I provide training programs to bankers in well over 50 countries face to face and online. I am always learning things myself.
What are some of the major UK and European fintech trends that we can expect in the coming few years?
So, the major trends will revolve around two things: one, Profitability, two, Regulatory environment. These two components will determine the next five years of financial technology. Following the 2008 crisis, there was abundant funding, there was a lot of liquidity, interest rates were low, and investors were in a growth mindset as opposed to a value-investing mindset and investors wanted companies with great growth potential. Now, with a higher interest rate and more inflationary environment, investors want prompt profit.
So, profit is king. Looking at the 50,000 small, nimble, flexible creative, intellectually inspiring fintech startups, we will have to be selective to find the ones that can become profitable or at least offer a potential roadmap to profitability in the short run or maximum midterm. Probably, of the 50,000 candidates, there will be around 5,000 – 15,000, the rest will go down or be acquired, or merge into potentially profitable ones.
On the other hand, the second trend, Regulation will be equally as important. Regulators are waking up, incumbent credit institutions (ie banks) are waking up and learning the name of the game. As they want to go ahead in a fully compliant, well organized, regulated, supervised way, regulators will have to up their game and create a safe and crystal-clear environment for emerging digital innovations, and this is very exciting.
Good regulators now have a chance to create a global best practice environment. Some of the emerging countries now have the chance to jump ahead; to leapfrog, and to produce an environment that attracts the best companies. Others will fall behind or fall further behind. So, this is a regulatory point of division, and more than ever in the past 30 years, we need smart and visionary regulators.
Preparing for the known: Operating in a world of crypto regulation.
Download to discover how UK crypto exchanges can prepare for the brave new world of crypto regulation.
How about challenges? With increasing importance placed on fintech [partly due to pandemic-induced acceleration], what are some of the dangers and challenges associated with banks and financial institutions rapidly implementing fintech and regtech solutions?
Regulators should focus on the areas that are valuable, that have real potential, such as CBDC, Fiat currency, as well as blockchain. Blockchain as a technology, as a distributed ledger technology is making banking safer, if applied well. So, blockchain technology has great potential for trade finance, through securities clearing, to interbank clearing, from smart contracts to registering derivatives, and even KYC-related activities. Blockchain has great potential if it is compliant and applied well, and can make banking better, more transparent, more professional, more trustworthy, safer, and more compliant, and that’s good.
Learning from some of the key innovations in the crypto world is also a great opportunity. But, cryptocurrencies, as decentralized, haphazard, no intrinsic value, no Fiat, no sovereign-appointed value in the background are dangerous, and probably the greatest bubble ever in history. I like to compare it to the tulip seed crisis in 17th century Amsterdam, when the price of tulip seeds went up to the price of residential real estate, and then it all crashed. A reason why cryptocurrencies in their current format are non-viable is a lack of material compliance; a lack of nominal price stability by design, which is a core characteristic of money as per money in terms of payments; a lack of sovereign control over monetary supply, which is very important in certain points in history.
Now we are battling inflation, but there is only one thing worse than inflation – deflation. Look at the energy crisis and look at how Bitcoin is eating up countries’ energy. Look at environmental considerations and try to put it together with servers running to the fullest across the world. Material costs, real cost of transactions, not illusory, imaginary costs, but real-life costs.
Look at all the fraud cases intended, unintended, deeply criminal, somewhat criminal, gray area, black area, full of fraud, and there is something very important, which is hidden and very important – a lack of interest rate content and lack of intrinsic value. An asset lacking interest rate content can be valuable, for example, gold is an asset lacking intrinsic value that can be valuable. Think about modern currency, it has very fractional reserves in the background, basically it lacks classic intrinsic value, but throughout history, throughout monetary history, assets without any of these two – interest rate content as well as intrinsic value – have been doomed to fail.
Current decentralized cryptocurrencies can be characterized by a dual lack of characteristics: interest rate content and intrinsic value. Warren Buffet and Charlie Munger are perfectly right about cryptocurrencies.
David Gyori, CEO at Banking Reports
However, regulators still have a great chance to focus on the good areas from blockchain to CBDC, from meaningful asset tokenization to certain synthetic units of corporate settlement. So, there are still great opportunities, but in this arena, regulators themselves must be selective, and selective in a conscious, premeditated yet strategic, tactical, and programmatic way.
Are there any countries that could be considered more advanced in the regulation of cryptocurrency?
This is a difficult question because we are in the process, and regulators are now trying to work out their positions. What we do see is that in terms of certain sub areas like CBDCs, certain countries are one or two steps ahead. For example, China has done some amazing research on CBDCs, the Bank of England is doing amazing research, also the Federal Reserve, some of the South Asian countries, such as Singapore. So, in terms of CBDCs, we are already seeing some interesting and meaningful attempts, but these are baby steps. We are in the nascent stage.
In terms of judging regulators, we must be very careful. In fact, one of the regulatory environments I’m expecting a bright future from is the UK regulatory environment, but I am also expecting some good things to come from Brussels, from the European union. PSD 3 (Payments Services Directive) is already in the making, and the UK is going ahead on its own path. I see some very good and smart signs that they’re supporting a vivid and valuable market structure in the future.
Customer onboarding processes remain a much fought-over area of a service provider’s customer experience. How can banks balance their customers’ desire to be onboarded in the automated and digital-only manner that they have become accustomed to, with local regulatory and KYC + AML requirements?
So, digital onboarding is paramount. Young people want simple, straightforward, easy to understand fun, one click, instant, digital, global best practice-level onboarding experience, and when they get it, they extend this experience to the product or service. So, they will think your product and service is amazing if your onboarding process is amazing. However, when your onboarding process has friction, when your onboarding process is slow, when your onboarding process is not digital, when your onboarding process is complex, when your onboarding process is nerve-breaking, when your onboarding process is not intuitive, you know what happens? According to research, millennials extend this to your product or service, in terms of perceived quality and content.
We call it the digital halo effect: extending one characteristic of a person, product or service to the entire entity.
David Gyori, CEO at Banking Reports
If the onboarding experience is positive your clients will become active users of your products and services and produce a positive lifetime value – they will be your profit drivers. If your onboarding experience is negative, clients, especially the young ones under the age of 35, will turn away from your products and services no matter what the quality is. Their lifetime value will be negative, and they will drive losses. So, [digital customer onboarding] is a tactical element of excellence with a strategic importance.
How important is it for banks to invest in multi-jurisdictional fintech and regtech solutions?
So, this is a unique time in terms of the relationship between regulators and regulated entities in the arena of financial services. Why? Because things are changing in such a complex, such a dynamic way. Can you remember what I said about the complexity of fintech? It’s so complex and so dynamic that regulators are actually open to discussion with mature, trustworthy, wise market players.
You can engage with the regulators now, and hand-in-hand, the market and regulators can forge safely ahead. For this reason, we are always searching for solutions that have been proven to be safe, trustworthy, compliant, and customer and regulator-friendly in other jurisdictions, [in order] to implement them in our jurisdictions.
David Gyori, CEO at Banking Reports
Multi-jurisdictional solutions are more important than ever. Regulators are learning from each other. Market players are learning from each other. We need solutions that can be used in different countries at the same time. So, there are vertical and there are horizontal arguments for multi-jurisdictional, trustworthy, stable, safe, and customer friendly, intuitive, seamless, and well-designed solutions.
What are some of the major issues with current KYC processes?
This question is very important and it’s a very smart question, because there is a shift in the paradigm of KYC processes. There is the old school, and there is the new school. The old school was face to face physical processes are safe, and digital processes are dangerous. Be very careful with digital onboarding, put additional guards there. Regulators would try to slow it down, try to tame it, try to moderate it, but there is a change in guard. There is a change in paradigm, and there is the new paradigm: eKYC (Electronic Know Your Customer) digital-only onboarding. The more people you include in an end-to-end digital financial services onboarding, the more transparent and safer your entire financial ecosystem will become.
So, onboard, onboard, onboard, onboard, of course do it as well, and as professionally as you can. Document everything, keep GDPR, be privacy compliant, but store everything that is legal and ethical to store, make it as safe as possible, and do it 24/7/365.
Do it as much as you can because the more people, the more young people, the more unbanked people, the more underbanked merchants involved in the end-to-end digital financial services, the more transparent, safer, more compliant, more professional your entire financial ecosystem will become.
This 180-degree shift in the paradigm of KYC, particularly eKYC, is very important.
What have you heard of IDnow?
IDnow is put together in a very smart way, and designed in a very safe, business-friendly, yet compliant and secure way.
We must recognize that a well-designed eKYC digital onboarding solution provides a safer identity environment than traditional channels; this is a 180-degree paradigm shift from digital being dangerous, to digital being best practice when done well. But, to do it well, you need a world class partner, and in my opinion, IDnow is one of those world class players and partners.
What is KYC?
The importance of KYC in the banking sector
Regulatory impact on KYC processes
