Beyond Reasonable Doubt
Scenarios -
The Banking and Finance sector has a long history of regulation regarding Anti Money Laundering (http://www.legislation.gov.uk/uksi/2017/692/contents/made) and customer due diligence is performed by long established practices such as Know Your Customer (KYC). The processing of this Personal Professional Identity Data (PPID) is also subject to the latest, hardened Data Protection Legislation in the UK, EU and other parts of the world, and directly impacts traditional KYC procedures. High value financial transactions require assurances about the genuine identities of all parties engaged in such transactions. Some financial institutions have suffered (in tens of millions) from well organised money laundering schemes between transacting parties where it was later discovered that those identities could not be relied upon as genuine.
The Banking and Finance sector is also experiencing disruption from the new challenger online banks – the new FinTech sector. The emergent FinTech sector is spurred by the recent (2018) EU Payment Services Directive known as PSD2 which aims to liberalise traditional retail banking. The account owner can consent to sharing their bank account information with another online banking service. What has not changed is the underlying reliance on customer due diligence that identifies genuine account holders that satisfies Anti Money Laundering obligations. Whilst retail banking serves the consumer market (B2C) the exchange of identity and account information between banks and payment service providers (competitors) is the B2B aspect where some assurance about identity is provided and relied upon (traded).
Establishing and maintaining accurate identification information about customers has become more critical to the new, more liberalised financial services sector so that it remains safe from financial crime. There is further reading on the subject by Bruce Hughes of KuppingerCole in this KYC paper of 2nd September 2016
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