Talent Acquisition Fraud – Hiring Legitimate Candidates with Identity Verification

Along with the rise in virtual and remote work, the number of cases of recruitment fraud is increasing at an unprecedented pace, urging authorities to take decisive action against criminals. Especially the pandemic resulted in huge mass layoffs giving setbacks to many sectors, ultimately creating massive inflation across the globe.

Now that the pandemic’s effects are diminishing, 97 million new job roles are to be expected by the next year, which will expedite fraudulent practices in the talent acquisition sector. Companies should be on their guard and implement a joint action plan to counter rising recruitment scams to secure their onboarding process.

How do Online Recruiting Scams Work?

The scammers fraudulently use an established company’s name, logo and even the details of real employees working in human resource departments to post jobs on recruiting websites or other social media platforms.

Keeping their credentials almost identical to the official company’s details, they send emails to job-seekers or post fake jobs. As soon as interested candidates apply, they conduct interviews to get sensitive information about candidates through telephonic or on-site interviews.

Through fake interviews and telephonic/email conversations, criminals ask for sensitive personal information, particularly social security, ID number and bank account details that job seekers often provide, paving the way for identity fraud.

In some cases, the scammers even seek money from the candidates in the name of background checks or certifications which directly cost them financial losses. In the US alone, users lost $86 million due to fake job opportunities posted on the internet.

Spotting the Signs of Recruitment Fraud

Recruitment fraud is the most unfortunate part of modern job hunting, where criminals prey upon candidates’ eagerness to find work for their living by creating scam job opportunities.

Here are a few signs that can help job seekers spot fraudulent elements during the recruitment process:

  1. Legitimate hiring managers and employers never ask applicants to make any financial transaction in their personal or company account. Always say No to any person who is asking you to send money for any recruitment purpose.
  2. Although the majority of companies ask the candidates to provide their personal information, this step usually comes when the recruitment process is near to complete. Any person asking for sensitive information like bank account details, social security number, date of birth or identity details could be a scammer who must be turned down.
  3. The majority of companies recruit their employees using their official email accounts; rather than contacting the person through common numbers or email addresses. Any job letter/offer from any such account could be a fake one.
  4. Legitimate recruiters always follow a comprehensive plan to get all the relevant information about the candidate. Any person offering you a job without following a standard hiring process raises suspicions.

High Profile Criminal Cases of Recruitment Fraud

After the Russian invasion of Ukraine, petrol prices ballooned worldwide, increasing inflation and the number of desperate job seekers. Through fake job postings, criminals exploit such individuals and get involved in recruitment fraud.

Several cases of talent acquisition fraud have been witnessed in the recent past encouraging global law enforcement authorities to take firm action against them. Let’s have a look at some of the high-profile cases:

1. Europol Arrested a Gang Involved in €20 Million Employment Fraud

In 2021, law enforcement authorities of the European Union dismantled a gang which was involved in an employment scam. The criminals were offering fake jobs in the construction sector to labourers while demanding an initial fee to pay.

It has been estimated that they illegally stole €20 million from the people in a few years, urging authorities to take strict action against them after the victims filed multiple complaints. The case is still in court, where their penalties are yet to be decided.

2. Hampton Gang Member Convicted for Pandemic Employment Fraud

Law enforcement authorities in the US have arrested a criminal for his involvement in a pandemic-related employment fraud. The Police have also stated that the criminal has a whole gang behind him, and they are trying to bring them under the law as well.

As per the investigation, the criminal was taking money from people to get jobs for them by submitting fake documents to various companies. The court has sentenced him to 27 months in jail and vowed to take down the whole gang working behind him.

Talent Acquisition Fraud and the Role of Law Enforcement Authorities

Due to the rising cases of recruitment scams across the globe resulting in financial losses of millions of dollars, law enforcement authorities of various jurisdictions are taking stringent action against criminals.

1. FBI Issued Instructions to Avoid Employment Scam

Federal Bureau of Investigation (FBI) has warned people to beware of cyber criminals using fake job listings to target applicants’ Personally Identifiable Information (PII).

FBI has instructed the common people to only apply for jobs through the official channels of companies and not pay attention to any emails, phone calls or messages received through unofficial accounts.

Employment fraud has been termed as a potential crime by the FBI, costing US citizens $59 million in 2020. The authorities have also instructed citizens not to provide any sensitive personal details like bank accounts, social security or identification number to any job recruiter through emails or phone calls.

2. UK Government – Raising Awareness of Employment Scams

The UK government has also taken drastic steps to guide their citizens about employment scams and how to avoid them. It has been strongly recommended that people apply for jobs only through the official portals or companies’ websites.

In their detailed guidance, the government has also guided job seekers to verify any email, phone call or message through certain checks, including verifying all details from the company’s websites.

It has also been instructed to the people not to proceed with any job application asking for money or any other personal details from you and not even open any spam link attached to the email.

How Shufti Pro can Help

With transforming technologies, the overall market is growing to produce more job opportunities for interested candidates. As per the surveys, this number is expected to grow in the coming years, increasing recruitment fraud risks.

Through talent acquisition scams, criminals not only defraud job seekers but also damage the reputation of established companies. So it is in their higher interest to find and implement a credible solution that efficiently mitigates the risks of stolen identity or credentials.

Shufti Pro’s identity verification services present an ideal option to counter this problem through its advanced identification features, including document authentication, facial recognition and address verification.

Want to learn more about identity verification services for eliminating recruitment fraud?

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KYC For Sharing Economy – Building a Safe & Trusted Environment that Retains Customers

“Sharing Economy” is a term that has become popular in recent years, and the current digital world is highly dependent on this advanced concept. In this system, different stakeholders cooperate to provide services and benefit each other. The primary parties involved in the sharing economy are the hosts, customers, drivers, and couriers, who connect to each other through a digital system. The significant services in sharing economy may include; ride-hailing apps, food delivery, and house rental facilities. All of these businesses are widely used across the globe, and with emerging technologies, operations are getting easier for users.

Uber, Airbnb, and Bolt are some common shared economy services used frequently by customers on a routine basis. The global revenue of sharing economy was $18.6 billion in 2017, which has increased to $40.2 billion in 2022. However, multiple security issues are associated with this business model, particularly identity theft, money laundering, and other financial losses. Unlike other sensitive financial organisations such as banks, the sharing economy lacks stringent rules and regulations, which has encouraged criminals to carry out scams without leaving any trail. It has become essential to regularise this growing sector through efficient Know Your Customer (KYC) solutions and make it a secure place for customers.

Sharing Economy – An Overview

Sharing economy is a system that works on the principles of P2P providing services to users through online mobile apps or websites. eBay is considered the first sharing economy platform to offer services in the field of household goods, automobile parts, and many others. In a few years, this trend has picked up pace, and currently, all the users across the globe are surrounded by sharing economy products/services. Uber,  the largest ride-hailing platform, has more than 93 million users, with around 3.5 million drivers across the globe. Just like Uber, there are a large number of P2P platforms which are efficiently working and easing the operations for customers.

In order to use any sharing economy service, users have to input their personal details like name, address, image, ID number, and social security number, which in turn makes them vulnerable to financial criminals. The bad actors attempt to steal users’ data and exploit it for various online scams while onboarding any platform through stolen identities. In this way, the original user does not get a hint about the theft, and criminals successfully carry out fraudulent activities, leaving no clue for law enforcement agencies. So addressing these security concerns through screening measures is quite crucial for the global regulatory authorities.

Worldwide Criminal Cases in Sharing Economy Platforms

The crime percentage in sharing economy platforms is increasing every year, and the law enforcement authorities of all the major jurisdictions are taking drastic steps to counter the criminals. Ride-hailing apps and food delivery services are used frequently by customers and are the prime target of fraudsters.

Let’s have a look at some of the high-profile criminal cases affecting the sharing economy sector:

19 Charged in Ride-Hailing Fake Driver Account Scheme

Federal prosecutors in the USA charged 19 persons who have been found to be involved in a fake driver account scheme. The Police have established that scammers stole the identities of more than 2000 users and further exploited those details to make fake driver accounts. Criminals were selling illegal accounts to those persons who did not meet the standards to be a driver on a specific platform. The law enforcement authorities have stated that a few more persons associated with this gang have not yet been arrested and are making raids to detain them.

Five Brazilian Nationals Charged in Nationwide Identity Theft Ring

Five Brazilian nationals have been charged in US court for their involvement in multiple crimes, including identity theft and account takeover. During the investigation, it was found that criminals stole many users’ identities and made fake accounts on ride-hailing apps and food delivery platforms. Using these illegal accounts, they were making fake orders, abusing the deals, and even selling the accounts to other interested buyers who were not eligible to work on these apps. The case is still ongoing in court, and criminals are yet to be penalised.

Global Regulatory Authorities Monitoring Sharing Economy

With the increasing use of sharing economy services, criminals have started exploiting loopholes using advanced techniques, urging global regulatory authorities to take firm action against it. Due to the unique nature of sharing services, different laws apply to them in various countries.

The United States has moved further and approved the Anti-Money Laundering Act 2022, which has all the provisions related to the prevailing money laundering and identity crimes through digital platforms. As per this act, it has also been made mandatory for all online services, including sharing economy, to implement robust identity verification mechanisms, which can help verify the criminals using fake identities to onboard the system and protect the sensitive data of all the sophisticated users.

To add to it, Europe has also passed the 6th Anti-Money Laundering Directive (AMLD6), and the authorities keep on working to improve this act with time. As per AMLD, sharing economy and other remote service providers will have to implement stringent identity verification and AML measures to counter the financial criminals. AMLD has shown quite positive results as overall digital fraud in Europe has declined in the last year.

Ensuring Compliance in Sharing Economy Through KYC Solutions

Know Your Customer (KYC) solutions cover all the security checks crucial for verifying the users’ true identities while onboarding. Biometric authentication of customers in real-time and then comparing the details with the ones on their documents can really distinguish criminals from sophisticated users. These measures will not only restrict bad actors from abusing the system and stealing other customers’ identities but also ensure transparency in the overall service-providing system. The majority of financial companies across the globe have implemented KYC measures which have produced fruitful outcomes, so the sharing economy sector can also be made secure through the same process.

Final Thoughts

The sharing economy services have facilitated users in an unprecedented way, and they are here to stay for a long time. Combating financial crimes, particularly identity theft and money laundering, is crucial for the sustainability of the system, which will ensure overall transparency.

Shufti Pro’s state-of-the-art, globally trusted IDV suite offers the most compatible solutions tailored to the sharing economy sector. Powered by an AI algorithm that is getting smarter over time, Shufti Pro’s KYC solution verifies users’ true identities through biometric authentication and document verification. It is efficient enough to provide results in a matter of seconds with ~99% accuracy.

Would like to get more information about KYC solutions for the sharing economy?

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Surging Crimes in NFT Marketplaces – Setting New Security Standards Using Shufti Pro’s AML Solution

The emergence of Non-Fungible Tokens (NFTs) has created new investment opportunities for business tycoons and wealthy politicians. It is an entirely new concept that has attracted the attention of all technology giants and is undoubtedly one of the most discussed topics. It all started when in March 2021, artist Mike Winklemann sold one of his art as a digital asset for $69 million. This landmark sale has given rise to a new trend of creating attractive NFTs and selling them into the market for millions of dollars. NFTs are blockchain cryptographic assets that have unique identification codes. Unlike cryptocurrencies, they cannot be traded at the same level, which is the prime reason behind the huge investments pouring into the sector.

The global NFT market in 2021 was valued at $11.3 billion and is expected to reach $231 billion by 2030. The statistics clearly show how fast the NFT marketplace is picking up, which has eventually encouraged criminals to take part in fraudulent activities, particularly money laundering and terrorist financing. It is not more than a decade since NFTs have come into the mainstream, and during this short time, the authorities have remained unable to regularise them properly. Implementing Anti-Money Laundering (AML) measures in the sector is crucial to counter criminals and make it a secure place for investors.

NFT Marketplaces and Money Laundering Concerns

Money laundering has always remained a sensitive issue for global financial watchdogs. Especially after 9/11, law enforcement authorities encountered myriad cases of terrorist involvement in financing their illicit activities through money laundering. Since then, regulatory agencies have tried to enforce AML laws in the financial industry. Banks, insurance companies, art & antiquities, and the real estate sector are the ones that have implemented stringent AML measures which have urged criminals to find alternative options. Although regulated, the NFT marketplace still has a lot of loopholes, making it an attractive option for money launderers. It is estimated that since 2017, over $8 million of illicit funds have been laundered through NFTs, with the numbers expected to rise exponentially in the coming years.

The criminals are using illicit funds to buy digital assets, and due to a lack of laws, companies never ask them about their sources which ultimately lets them convert their illegal money into legit cash. Moreover, the whole marketplace is highly volatile, further aiding the bad actors in manipulating the prices and disguising their original wealth under digital assets. The Financial Action Task Force (FATF) and European Union (EU) have also raised grave concerns about addressing prevailing money laundering, encouraging countries to legislate laws for this crucial sector.

Money Laundering and Role of Law Enforcement in Securing NFTs

Due to the involvement of global financial watchdogs, all the major jurisdictions have taken drastic steps to curb money laundering in NFTs marketplaces. Not only the wealthy business tycoons but several gangs on a smaller scale are found to be involved in this heinous crime, and law enforcement authorities are working tirelessly to bring them under the law.

Here are some of the recent high-profile NFT crime cases observed in the United States:

NFT Sellers Charged in $1 Million Money Laundering Scheme

US law enforcement authorities have arrested two NFT sellers who were involved in selling fake digital assets to users and further laundering illegal money to other countries. Police have revealed that criminals were running a marketing campaign encouraging users to buy NFTs, and after a large number of sales, they shut down their website along with users’ digital assets. They managed to collect $1.1 million dollars from their customers and were trying to launder this money through cryptocurrency. Both scammers have been charged in court and are yet to be penalised.

HMRC Seizes NFT in £1.4m Fraud Case

The UK tax authority HM Revenue and Customs (HMRC) has arrested three people for attempting to make a fraudulent transaction of £1.4 million through NFTs. The law enforcement authorities have seized an NFT, and it has been termed to be the first-ever seizure of non-fungible tokens by the UK Police. All the criminals have been charged in court, and investigations are still going on to trace more illicit transactions linked to the case.

Global Regulatory Authorities Monitoring NFT Marketplaces

While the crime percentage in the NFT market is increasing with every passing day, the global regulatory authorities have also started taking the right action against the culprits. The Financial Action Task Force (FATF) and European Union (EU) are the leading bodies which have made a clear stance against prevailing money laundering activities through the NFT marketplace.

FATF’s Stance on Money Laundering Threats Posed to NFTs

Since 9/11, FATF is the primary regulatory organisation which has taken drastic steps to curb money laundering and terrorist financing in the economic system. FATF has highlighted the vulnerabilities of NFTs to financial crimes and guided all the Virtual Assets Service Providers (VASPs) to implement s security system based on Enhanced Due Diligence (EDD) measures. Moreover, it has also been made mandatory for the VASPs to get a license from the belonging country and track the financial activities of all their users. The guidance by the FATF is binding for all the member states, and failing to comply with them can even lead to their name being placed on sanctions lists.

The Role of European Union

Members of the European Parliament has vowed to fight money laundering by regulating NFTs, metaverse and the DeFi sector. The finance experts of the EU have asked all the member countries to track the transactions through blockchain and report to law enforcement authorities in case of any suspicious activity.

How NFT Sector can Ensure AML Compliance

Non-Fungible Tokens (NFTs) are actually working through the blockchain, which has a decentralised system, ultimately leaving the authorities to end up losing the criminals. The ideal way to counter the bad actors is through stringent measures during the onboarding. FATF and EU have formed sanctions lists having the record of a large number of money launderers and terrorist finances. The NFT sector should have a system where they can screen customers’ data against these lists and identify the criminals while reporting them to law enforcement authorities. Many financial institutions like banks and insurance companies are following the same practice, which has successfully countered bad actors.

What Shufti Pro Offers?

Eradicating money laundering and terrorist financing from the NFT marketplaces is quite crucial, which must be done to secure the platform for sophisticated users. NFTs are here to stay, and steps in the right direction can help the service providers counter criminals.

Shufti Pro’s AML screening solution is an ideal option for NFT marketplaces which can help them to meet global anti-money laundering compliance. Powered by an AI algorithm that is getting smarter over time, Shufti Pro’s AML solution has access to 1700+ global sanctions lists, and while screening data against them, it generates results in seconds with a ~99% accuracy.

Would you like to explore more about AML solutions for NFT marketplaces?

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Know Your Driver – Urgency of Identity Verification for Mobility service Providers

Scams have been at the forefront whenever a new tool is made available. The same goes for ride-sharing services. Ride-sharing services have added a new identity verification tool that compels its users (both the riders and the drivers) to verify their identity by uploading a legitimate ID, such as a driver’s license or a passport. This will significantly reduce safety concerns and allow for a much smoother experience for the end users.

With ride-share services, identity verification is crucial. That’s because the driver may “lend” the car to a friend or an unidentified third party after the verification process is complete. It reduces riders’ trust in the ride-sharing company.

Massive Growth of the Ride-Sharing Industry

The ride-sharing industry’s revenue is expected to grow at a CAGR of 10.38%, from 2022 to 2026, projected to cross $1 trillion by the end of 2022. With a 77.4% user penetration in 2022, and expected to reach 92% by 2026, the ride-sharing industry is showing excellent signs of growth. But all of this cannot be achieved without proper KYD and KYC verifications in place.

Millennials now prefer using ride-sharing services due to a number of advantages, such as:

  1. Door-to-door ride services
  2. Easy booking options
  3. Food and package delivery
  4. No hassle of owning the car

As a result, tremendous growth can be observed in the mobility-providing industry in the coming years.

As the growth and demand for ride-sharing services continue to grow, there has been increasing concerns by local regulatory bodies, pushing for changes in the laws. Taxi drivers often protest that personal cars cannot and should not be used for commercial purposes.

Performing rigorous background checks to ensure that riders and drivers have no criminal record, is super critical to sustaining growth in this industry. One way to mitigate the risk of fraud and scams is to deploy liveness checks during and after rides, as well as provide regular photos of the vehicle.

Rising challenges for mobility service providers

Despite Uber, Lyft, and Carem revolutionizing the way how millions of riders commute on a daily basis, these companies haven’t been spared by controversies. Some of the most common issues denting the reputation of the ride-sharing companies are

  • Heated exchange of words between riders and drivers, often leading to threatening remarks
  • Peak and off-peak rates
  • Differing rates before and after ride completion
  • Predatory pricing mechanism
  • Corporate practices marred with corruption

Ensuring Safety Measures

Awful passenger feedback, rough driving, and fake drivers adversely affect the riders’ experience. Drivers with low ratings are also considered red flags and may not hesitate to take advantage of the passengers. To deliver coherent rides, companies are making tireless efforts to enhance safety criteria. 

Regulatory Obligations 

A decade ago, ride-hailing services sprang out of nowhere, and it took time for governments to catch up. Local governments are passing on regulations aimed at controlling the operators of ride-sharing services.

These regulations have taken many different forms, from outlawing the operation of ride-sharing companies in airports to concepts like the one put forth in Austin and Texas.

Drivers for Uber and Lyft now have to undergo extensive background checks by the local police to ensure they have no criminal record.

Commonly Encountered Frauds in Ride-Sharing Companies

Ride-sharing apps today have completely taken over the cab industry. But such a growth isn’t without its consequences.

Incentive Abuse

A particular number of rides completed in a set amount of time are frequently rewarded for drivers. However, they can exploit this by setting up fictitious passenger accounts to make legitimate reservations and then accepting their own rides using their genuine driver account. As a result, their number of rides increases, allowing them to benefit from incentives designed for reliable drivers.

GPS Spoofing 

It’s possible that your driver used a GPS spoofer. It has been documented that dishonest drivers will manipulate an app’s virtual queueing mechanism by using GPS spoofers. Almost all ride-hailing businesses use a system whereby drivers are given booking preferences based on their location. Drivers can skip the virtual line and pick up a passenger right away by employing a GPS spoofer. This causes passengers to wait longer and is unfair to other drivers.

Global Regulations for Ride-Sharing Services

Lawmakers are now stepping up to prepare and get approved a list of regulations and laws for ride-sharing companies to follow.


The Electronic Communications Privacy Act (ECPA) is among the various state and federal regulations. These rules apply to ride-sharing services in the same ways that they do to other businesses, such as banks, insurance firms, and real estate.

Additionally, all states grant business licenses to organizations through which it is mandated that ride-hailing platforms submit criminal background checks and driver biometric records.


In October 2015, the Australian Capital Territory (ACT) legalized ride-hailing services and published new legislation that calls for background checks, vehicle inspections, and driver insurance.

In July 2016, South Australia allowed services comparable to Uber. Apps that sell rides must adhere to the safety regulations outlined in the Passenger Transport Act. All metro cab trips will now be subject to a $1 levy to help pay for this support. Taxi services were given compensation, including A$30,000 per license.


China’s Ministry of Transport has modernised its laws to protect the privacy of consumer data. Ride-sharing firms have given very clear instructions not to share a user’s data with any organization outside of the jurisdiction. All ride-hailing services are also recommended to perform routine data audits to address security risks and flaws while putting strong safeguards in place to prevent illegal activity.

Due to these stringent standards, DiDi, the industry powerhouse in ride-sharing services, was fined $1.2 billion for breaking the rules.

Final Thoughts 

In short, ride-hailing services have transformed the whole transportation sector and raised the bar for commuting. In addition to causing financial losses, identity theft, data breaches, and financial crimes also negatively impact user experiences. The only practical way for operators of ride-sharing services to combat criminals and make the platforms secure for users is to implement rigorous identity verification procedures.

The most effective way to combat the frequent identity theft crimes in ride-sharing services is to use Shufti Pro’s effective identity verification services. By using facial recognition technology and document scanning to confirm the drivers’ and riders’ real identities, verification services can assist businesses in onboarding legitimate drivers and riders. The ride-hailing industry can use the Shufti Pro verification services to improve user experience, report suspicious activity, and comply with international rules. 

Want to learn more about our identity verification solution for your ride-hailing service?

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A Brief Insight into the AML and CFT Framework of Thailand

Thailand has become quite a popular and well-reputed financial hub, attracting investors worldwide. Thailand has free trade agreements with more than 10 countries across the globe which is the prime reason for huge investments by business owners. Due to the influx of money into the country, criminals have also found opportunities to carry out money laundering and terrorist financing. The fraudsters are manipulating the existing laws and exploiting them in their interests.

It is estimated that 33% of the financial companies in Thailand have experienced fraudulent activities, particularly money laundering, in the previous year. In the wake of this, global financial watchdogs have termed Thailand a soft target for money launderers and instructed the government to take rigorous steps to counter financial criminals. Thai law enforcement authorities have responded positively to this warning by international monetary organizations and implemented Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) measures which have brought positive results.

Thailand – A Safe Haven for Money Launderers

Thailand is among those countries which have made its image as an entertainment hub in the past few years. This factor has attracted tourists and business tycoons from around the globe to invest in various projects. Due to the influx of money in the country, organized crime groups have started exploiting loopholes in the economic system and abusing them to carry out several heinous crimes. The global financial regulators have also highlighted the need for stringent AML and CFT measures in Thailand that are efficient enough to counter the bad actors and bring them under the law.

The criminals usually invest their black money into different sectors, particularly tourism, and construction, ultimately selling these valuable assets while converting their illicit cash into legal money. A few years back, the Financial Action Task Force (FATF) put financial sanctions on Thailand for not complying with the global money laundering regulations, urging the local law enforcement authorities to find an efficient solution to curb this menace. This is the prime reason that in the recent years, Thai Police have arrested many criminals allegedly involved in money laundering and terrorist financing while initiating legal lawsuits against them.

Financial Losses and Role of Thai Law Enforcement Authorities

In the time span of a few years, fraudsters have inflicted billions of dollars of financial losses on users in Thailand through various scam schemes. The country has also highlighted in multiple international conferences on money laundering, which ultimately urged the authorities to take decisive action against the perpetrators.

Let’s have a look at some of the cases where Police took strict action against criminals:

Gang Arrested for $23 Million Money Laundering

Thailand law enforcement authorities have arrested a criminal gang involved in money laundering activities by running different fake schemes. Police revealed that they had been tracking down the criminals for more than a year, and investigations have found that during this time span, they successfully laundered $23 million to different countries. All the fraudsters have been charged in court, where their penalties are yet to be decided.

The Chaimat Case – Illegal Logging and Money Laundering

The Chaimat case is one of the leading cases in Thailand where fraudsters were arrested for smuggling Timber wood to other countries and laundering the profit money through several channels. Thai law enforcement authorities have revealed that criminals smuggle wild species worth more than $200 million Baht every year, further spreading this illicit money into different businesses. All the criminals linked to this case have been arrested, and the case is still going on in court. The authorities have further vowed to track all the bad actors involved in smuggling and bring them under the law.

Recommendations of Thailand’s Law Enforcement Authorities

The Anti-Money Laundering Office (AMLO) in Thailand has proposed a comprehensive framework to eradicate the chances of financial crimes in the economic system. On a national level, the local government is holding several events to guide the common people to participate in seminars related to anti-money laundering.

Customer Due Diligence (CDD)

Customer Due Diligence (CDD) is the process used by financial institutions to collect and analyze users’ information. Through an efficient CDD, banks and other organizations can have their users authenticate and make a record of them, which can prove helpful in identifying criminals.

Know Your Customer (KYC)

Know Your Customer (KYC) is considered the most crucial solution to authenticate users’ true identities. The Thai government issued a report last year where it has been highlighted that the majority of money launderers are using fake identities to carry out their heinous crimes. It has been critical for all financial institutions to implement robust KYC measures to verify users’ true identities in real-time by comparing the details with the ones on their documents.

Anti-Money Laundering Laws of Thailand

The Thailand government has shown quite a responsiveness towards the increasing financial crime by implementing several new laws in the country or amending the existing laws. Under all these laws, the courts are trying the criminals, ultimately helping the government tackle the issue.

Let’s have a look at some of the rules which have presented considerable resistance to money launderers and terrorist financiers:

Anti-Money Laundering Act B.E 2542

Anti-money laundering Act B.E 2542 is Thailand’s primary law, which has all the provisions against money launderers and other financial criminals. It has been made mandatory for banks and other monetary organizations to report any transaction above $1600 to the relevant authorities. Moreover, the act also terms any attempt to invest the black money as a criminal offense which could result in imprisonment of up to 15 years.

Counter-Terrorist Financing Act Amendments

Although Thailand had the Counter-Terrorist Financing Act in the past, it lacks provisions related to the use of financial organizations and money laundering in spreading terrorism. The authorities have amended the CFT law, and all the financial irregularities resulting in any terrorist activity are termed criminal offenses.

Key Takeaways

Combating money laundering and terrorist financing is crucial to ensure the rule of law in Thailand. It is one of the growing economies in the region, and investing in AML/CFT solutions can bring positive results for financial organizations.

Shufti Pro’s AML screening solutions are the most viable option for businesses operating in Thailand to ensure compliance with global regulations and counter financial criminals. Shufti Pro’s AML solution has access to 1700+ sanctions lists and screens users’ data against them while providing results in seconds with 99% accuracy.

Are you ready to learn more about the AML/CFT solutions for Thai companies?

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KYC and AML Compliance – Addressing the Challenge of Money Laundering in Online Trading Platforms

An online trading platform is a program where shareholders and traders deal through financial intermediaries and pursue their business online with a combination of sturdy features and minimum fees. A few of the main product types of online trading platforms include transaction and commission fees that are used in equity stocks.

Global online trading firms have shown a surge from $9.6 billion to $10.21 billion at a compound annual growth rate of 6.4% between 2021 to 2022 and will grow to $13.13 billion in 2026 at a CAGR of 6.5%. In 2021, North America perched as the biggest region in the digital trading industries. In consonance with the United Kingdom committee of online commerce, a British unauthorized body highly perturbed with business and trading, the digital sector donated $197 billion to the British providence.

COVID-19 and the upsurge in digitization have steered the online trading markets and are increasingly engaging digital models and businesses. As criminals are finding ways to disguise the market from unscrupulous sources, online trading platforms are equally prone to financial crimes as other entities and draw the attention of effective KYC and AML compliance to assist in governance. 

Online Trading – An Overview

As a consequence of technological advancements, online trading markets have evolved as mainstream brokerage firms. Since its existence, the market has exploded into development and fluctuated the brokerage industry. Currently, there are about 4 million Americans with active digital trading accounts contributing to 25% of all retail stock trades. As the internet serves as an information gateway, online traders can break any barriers that conventional trading offers. With online trading, investors can execute their merchandise instantaneously with minimum or no barricade at the price of their choice. Moreover, online investors have total control over time and gain information confidently with self-directed portfolio management advancements.  

The value proposition in terms of convenience and accessibility has made online trading a very attractive platform for shareholders and investors. 80% of US digital households showed interest in online trading due to low transaction fees. With the technological advancements, online traders also automatized office processing, therefore, eliminating operating expenses. Many online trading sites offer stocks and trade information to make it easy for investors to monitor their financing in real-time.

 With the addictive nature and ease of investing too much too fast, online trading platforms pose the risk of being attacked by cybercriminals to exploit the idea of investing in trading platforms. To assess the risk of such illicit activities, there is a need to apply KYC and AML compliance to interrupt money laundering and terrorist financing. 

Global Risk Assessment in Digital Trading

Globally, every country is involved in online trading. As a result, Trade-based terrorist financing can take place. Contributors noticed that trade-based money laundering (TBML) enables ventures like the abuse of corporate structures. The benefits of online trading markets have challenged countries to think about risk exposures and vulnerability.

German National Risk Assessments 

Germany launched its first National risk assessment in an effort to fight money laundering and terrorist financing. Collectively 35 federal and local authorities were involved in the assessment which was conducted by the Federal Ministry of Finance. The fir NRA spotlighted the importance of TBLM, because of a massive number of people using online trading. The usual TBLM method included the collective invoicing of goods, counterfeit trades, and the investment of extra cash in high-priced goods. In these situations, cooperation with the private sector and other obligated [arties played a decisive role in building an understanding of TBML risk.

U.S National Risk Assessment

The United States declared TBLM as a threat as well as a vulnerability. The European transnational criminal organization and their correlated drug trafficking activities conducted TBLM programs because their sophistication makes it hard to detect. The 2015 National Money Laundering Risk Assessment (NMLRA) offered a modern pattern on TBML schemes, finding in most cases intricate a conniving merchant or front company in the U.S. that received illicit proceeds in return for goods. After the publication of this NMLRA, the U.S. engaged in outreach with multiple financial institutions all around the United States to talk through these findings. 

Common Money Laundering Techniques in Online Trading

According to the FATF report, there are several methods that form the foundation of trade-based money laundering:

Over and Under Invoicing of Goods 

The lead element of this approach is the distorted representation of the price of the good or service, in order to transfer value. In this type of arrangement, the crucial enabling aspect is that the importer and exporter are deceitful in the misguiding. 

Multiple Invoicing of Goods and Services

This technique doesn’t require the misrepresentation of the price; rather it mainly focuses on the use of already existing documentation to account for multiple payments for the same shipment of goods or delivery of services. Furthermore, cybercriminals or terrorist financiers exploit this by reusing these documents.

Falsely Described Services

This involves the misapprehension of the quality or variety of a good or service, such as the shipment of a comparatively inexpensive good, which is mentioned as a more costly item, or a completely different item, to account for value movement. 

Best Practices to Counter Trade-Based Money Laundering

The FATF directions set out an extensive substructure of KYC/AML measures for dominion to apply in order to exempt ML and TF efficiently. Along with that, jurisdictions have a certain degree of adaptability in terms of how those measures are interpreted into the national legit and governance frameworks and applied in practice. This pliability is based on the context, threats, and other structural components of each jurisdiction.

Developing an adequate level of understanding of TBML schemes should be the basic principle of any scheme to counter this form of ML. This authorizes the public and private sectors to focus their resources and regulate broader ML strategies. Jurisdictions use NRA as a source that delivers information on ML/TF risks available in the jurisdiction, sometimes with a breakdown by certain sectors. 

Online trading firms must subsume identity verification among other KYC measures to make subtle regulations with international standards. One of the vital obligations is to gather the customers’ private information and implement sturdy measures to substantiate their identity during onboarding. Stock exchanges also require strict measures to know their customers when they are engaging in financial transactions.

Final Thoughts

Know Your Customer (KYC) obligations motivate online trading companies to verify the identities of their customers as well as execute background screening to regulate  intentional or unintentional participation in criminal activities like money laundering and terrorist financing.

Shufti Pro offers AI-powered KYC services for the online trading industry, allowing them to comply with AML regulations and prohibit financial crimes like money laundering. It verifies identities in less than a second and identifies high-risk entities through background screening against 1700+ watchlists.

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AML Compliance in the FinTech Industry’s Uncertain Regulatory Landscape

Financial technology (FinTech) exists to improve and automate the delivery of economical services to help business owners and companies. Customers enhance their financial operations utilising specialised algorithms used on computers. To reduce financial crime, regulators legislated laws and regulations to shield financial organisations from money laundering. The FinTech sector needs to adhere to the regulations to avoid reputation losses and penalties. 

Taking global financial services to the next level, the FinTech industry is expanding at a CAGR (Compound Annual Growth Rate) of 6%. Modes of payment have vastly changed with the existence of FinTech. Anyone can utilise services like swipe, WePay, Venmo, etc for quick transactions.

With the existence of innovative transaction methods, AML practices are being used globally. Anti-money laundering requirements are inflicted on financial businesses to fend off tricksters from screening their laundered money from facing compliance sanctions. AML compliance can also automatically report suspected fraud activities to relevant authorities.

Contemporary AML Challenges in the FinTech Industry

Despite continuous improvement in the AML approach, the FinTech sector faces severe monetary losses. Firms that fail to intercept money laundering are more prone to losing customer trust and cause brand reputation damage. To fend off difficulties in managing AML risks, global rules are set by the Financial Action Task Force (FATF). 

Common AML challenges include:

Lack of Competent Personnel: Skilled AML professionals are required to govern and tackle fraud challenges in the FinTech industry. Employees must stay informed of progressing regulatory responsibilities. Attention to detail, critical thinking skills, organisational skills, adaptability, and computer literacy are the most valuable skills that an AML personnel must have. 

Highly Demanding Governance: Directing multi-departmental AML adherence standards and customer conscientiousness needs may be challenging for FinTech organisations. Figuring clear ownership to sort out AML insufficiency revealed by compliance assessments is a delicate task that needs proper attention. 

Complex Technology: To resolve money laundering issues, AML compliance involves different processes to incorporate KYC data and systems. The risk of monetary loss is high during onboarding exchanges depending on the customer’s transaction. FinTech departments must assess the risk and regulate them properly. Since such regulation is quite complex, it requires the consistent observation of customers’ transactions.

FinTech Money Laundering Risks

FinTech institutions should recognize and report money laundering or terrorist financing risks that may evolve with the use of emerging technologies. Financial institutions must thoroughly assess the potential risk before launching new products, developing innovative technologies, or advancing other business practices. Suitable precautionary measures must be taken to alleviate all the viable risks. This can be ensured by designing AML controls to comply with the respective AML regulations of each country.

Customer Negligence: Sometimes obtaining customers’ names, addresses, and other personal information becomes difficult during remote onboarding and is considered one of the potent risks contributing to money laundering. To decrease monetary theft, FinTechs must employ instantaneous Customer Due Diligence (CDD) solutions. Client information should be perpetually updated through databases to disclose false information and unwanted customers. 

Illicit Screening: Abandonment of AML screening tools can pose  a potential risk to the FinTech sector. FinTechs must employ tools to detect or reject customer sanctions internationally. AML risks can be greatly reduced once sanctioned and politically exposed individuals are identified.

FinTech Transaction Ignorance: FinTech transaction monitoring is essential to detect suspicious or fraudulent money exchanges. Transactions being through a FinTech solution should be carefully monitored to prevent money laundering.

Compliance Regulations in FinTech Industries

Financial regulations continue to strengthen as new services develop. New laws are established internationally by governments and regulatory bodies to clamp down on fraudulent activities.

FinTech compliance regulations are supposed to direct financial service laws and ensure customers’ security. Rules and regulations vary from region to region but work with the same objective to maintain the integrity of the financial market, protect customers from crimes and regulate the FinTech sector.

US FinTech Regulations

‍‍One of the most competitive and evolving FinTech markets is the US. To keep track of the growing financial sector, the US follows traditional and newly established regulations to hamper all sorts of FinTech crimes. Some of the  main FinTech regulators in the US are:

Financial Crimes Enforcement Network: FinCEN analyzes the collected data about FinTech transactions to identify national and international crimes such as terrorist financing.

Financial Industry Regulatory Authority: An American sector that works interdentally as a self-regulatory organisation for the FinTech industry to control exchange markets and broker firms.

U.S Securities and Exchange Commission: SEC is in charge of securities brokers, investment advisors, and funds to facilitate equitable dealing and prevent fraud.

FinTech Money Laundering Fraud

Ever since the existence of the FinTech industry, a series of fraudulent activities have been actualised, such as money laundering and identity theft. The complexity of these crimes depends on the trickster’s sophistication and can either be easily identified or skip AML monitoring systems.

  • Social Engineering Scam Despite taking all sorts of preventive measures,

social engineering scams are contemplated as one of the most sophisticated frauds that the financial sector is facing. It involves using planned emails, social media, phone calls, or other means of communication to trick the victims into handing over private financial details. A study conducted in Poland in 2022 reported that 29% of such fraudulent cases were through email.

  • Payment Fraud Attack: Fraudsters steal the financial credentials of others and use them to make illegal transactions. In 2021, accelerated growth of 70% is marked in FinTech. Most of these attacks were aimed at BNPL (Buy Now/Pay Later) services. 49% of survey participants report being victims of payment abuse.
  • Synthetic Data Fraud: Synthetic identity fraudsters use a blend of fake and authentic stolen security numbers to generate false recognition to apply for a credit card. In the US, payment losses due to synthetic credit card fraud were expected to increase to $1.26 trillion in 2020.

Final Thoughts 

An advanced sector like FinTech needs equally modern fraud monitoring solutions. AML screening provides institutions operating in the FinTech sector with a tool to filter out financial criminals. It covers over 150 different languages and is available in over 230 countries and territories. Shufti Pro’s AML solution has access to 3000 ID document types and screens customers against over 1700 global watchlists, which are updated every 14 minutes.

Shufti Pro’s identity verification solution is PCI certified to ensure the security of customer data from any theft risks, third-party accountability, or government charges. Shufti Pro aims to ensure fraud-free transactions in the FinTech sector by eliminating bad actors during onboarding.

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A Brief Insight into Netherlands’ Cryptocurrency Regulations

Just like other European countries, the Netherlands is also a notable financial center making it a likely ground for money laundering. The Netherlands is considered to have flawed Anti-money Laundering regulations due to the significant amount of money flowing through the country without proper oversight. According to the US state department, the Netherlands’ main concern is to figure out money laundering and financial crimes, which represent around 90% of the country’s total crime rate. 

To address this financial crisis, the Dutch government has initiated the implementation of noteworthy improvements in policies related to the labour market, electric powerhouses, and healthcare sector following close discussions with trade associations, civil society groups, and labour unions. The AMLD5 (Anti-money Laundering Directive) advanced in the European Union to permit the Dutch to qualify for its money laundering and terrorist financing prevention act (Wwft) in 2020. This proves that the crypto industry is no longer operating in the gray and buyers of digital assets must disclose personal details.

National Money Laundering Cases – The Netherlands Crime Report

The Netherlands is highly at risk for money laundering as a consequence of the huge trade-oriented economy, financial sectors that are internationally recognized, and a large number of financial crimes. 

Prison Sentence for Money Laundering via the Use of Intermediaries

In 2020, a man was sentenced to 4.5-year prison by OM (Operations Management) for money laundering. According to the OM, the man was involved in a EUR 4.2 billion money laundering case through the bank accounts of three different companies. The suspected man tried to escape the crime by involving intermediaries who were directors of private limited companies. These men had no basic knowledge of business and the criminal took advantage of this fact. MO further reported millions of euros were loaded into the bank account of these three companies and then transferred to other countries after two years. This money was suspected to be tied to drugs. 

Money Laundering Case via Wire Transfers

The Netherlands was charged EUR 775 million by the OM in the year 2018 for violating Wwft laws. Licensed banks were involved in the money laundering case as ING (International Netherland Group) failed to guard the financial system. Many of the bank accounts of ING customers were criminal in origin and were used to launder millions of euros between 2010 and 2016. Criminals may also take advantage of legal banks for cross-border payments. In that case, if the foreign bank does not follow customer screening, the Dutch bank may face a greater risk of criminal activity.

High-Value Service Dealers Money Laundering Case

A couple was charged for money laundering through expensive goods and services, laundering more than 750,000 euros, as they dealt in a business buying and selling expensive watches. The man was caught when he called for a large amount of cash transfer through his company with no peculiar data records present. 

Money Laundering through Cryptocurrency

Cryptocurrency is the most common method of payment on the darknet and is often a top choice by criminals looking to launder money. In 2018, the Financial Intelligence Unit in the Netherlands predicted double the number of reports than in 2017 regarding doubtful transactions with the subject of VA. A bitcoin trader was sentenced to a five-year prison in 2018 who had laundered about EUR 11.5 million in bitcoin within two years. According to the OM, this money was obtained with illegal trade in drugs and other forbidden goods.

Union of Five Dutch Banks to Counter Money Laundering

A sequence of money laundering affairs in the Dutch organisations ensued strict governance measures to sustain customer trust in Dutch banking systems. Five of the largest and most well-known banks in the Netherlands are uniting to take an initiative to address alleged money laundering and terrorism financing head-on. ING and Triodos, along with three other banks are putting a team together to launch a new firm, TMNL (Transaction Monitoring Netherlands). This new entity will be responsible for collecting data from all of their combined transactions to pinpoint any atypical behaviour that is simple to identify from the entire dataset.

TMNL will not replace the data from banks they already own, which is to remain in place. Every bank must meet the increasing national and international regulations on how to prevent money laundering. The union of five banks put the Netherlands under high pressure to update its AML systems to keep the country away from becoming a crime hotspot. 

The skyrocketing sophistication of criminals is closely tied to the constantly evolving nature of threats. This evolution makes it challenging for transaction monitoring to catch the large number of risky transactions resulting in an increased crime rate going undetected. TMNL’s launch took note of this reality and figured individual banks will continue with their individual systems, along with a collective approach, making it easier to identify suspicious ventures in the banking system throughout. 

Netherlands Crypto Regulations

Netherlands followed its law on the anticipation of money laundering and terrorist financing (Wwft) by rearranging the 4th European AML derivative into its authority. The law streamlined all the rights of every person in exposing money laundering and terrorist financing. After AMLD 4, the Dutch law now includes AMLD 5 which accommodates a number of provisions related to contributors of cryptocurrency. The following obligations must be adopted by the companies to regulate flaws in the crypto sector.

  • Providers need to register with the central bank of the Netherlands which will be responsible for further regulation of the crypto sector. 
  • A 6-month of intermediate arrangement to meet the enrollment objectives will be given to the providers. 
  • A request to the DNB will be submitted for the sake of registration so that they can decide whether the directors are suitable and reliable or not. 
  • Financial sectors are required to report doubtful transactions to FIU and personal data must be shared. 
  • Crypto providers must have suitable and efficient AML & KYC processes to identify customers, monitor transactions, cross-reference sanction lists, and provide the Netherlands authorities with essential information.

Final Thoughts

With the escalating amount of money laundering and financial crimes in the Netherlands, there is an urgent need for anti-money laundering regulations and solutions that can minimise possible money laundering risk.

Shufti Pro’s ultra-modern solutions for money laundering are the most suitable choice for financial businesses. Shufti Pro’s ideal AML screening services assist financial organisations to be persistent in complying with anti-money laundering regulations. Furthermore, the services provided by Shufti Pro enable screening customers against 1700+ financial monitoring lists worldwide with 98.67% accuracy, in seconds.

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KYC & AML Regulations in the UK: An Ultimate Guide

Financial crimes have been around since the invention of money. Some argue that their origins are even further back in history, with the advent of trade. Likely true, one can imagine the instances of fraud involved in trading rotten fruits, soured wine, or sick livestock. During those times, such activities that were carried out intentionally, in fact, were considered a financial crime. Once fiat currency emerged, things got even trickier and more complicated.

Fast forward to the 21st century, financial crimes are still a prevalent and ongoing challenge for banks, financial institutions, and individuals. However, to take action against fraudsters, regulatory authorities are emerging with KYC & AML regulations while fintech companies are introducing new preventive solutions such as identity verification systems. As technology is empowering authorities to take advantage of powerful security systems, on the other side, the same technology is making criminals more sophisticated to carry out offenses including money laundering, terrorism financing, account takeovers, document forgeries, and evade legal scrutiny. Financial institutions are also expected to play their role in the fight against crime by meeting regulatory obligations while integrating AI-powered KYC suits. Considering the significance of financial compliance, the global cost of compliance in the financial sector is estimated to be around $180.9 billion per year.

Financial Crime Outlook in the UK: 2022 and Beyond

Nevertheless, nearly two years after the onset of the Covid-19 pandemic, the United Kingdom has already gained 43% of the global total foreign-exchange turnover, making the country one of the world’s leading international financial services hubs. The country stands at the top as a global financial participant leading it to be what some would call the “dirty money” capital of the world. In addition to combating crimes, the businesses operating in the country are also finding it hard to balance evolving complex global KYC & AML regulations and deliver better customer experience while reducing operational costs. This has created a stressful environment to operate in, yet getting compliance wrong is not an option. In this regard, 12 out of the country’s top 50 financial service providers were fined in 2019 for non-compliance with AML, KYC, and other state regulations. The total fines were approximately $8.4B.

That being said, the numbers don’t speak in favour of the country as the National Crime Agency has stated that recurring crimes cost the major financial institutions a whopping EUR 100 Billion loss annually. 

FCA Fines Ghana International Bank £5.8m Over AML Controls 

The FCA has fined Ghana International Bank Plc (GIB) £5,829,900 for poor Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) controls over its correspondent banking activities. The firm provided financial services to overseas banks. This helped them to offer services and products they would not be able to do, including carrying out payments in foreign currencies and across borders.

The financial conduct authority obligates banks to perform extra checks on their customers to eliminate the risk of money laundering, terrorist financing, and various other financial crimes. The firm has also been held questionable between 1st January and 31 December 2016 for not adequately performing the additional checks required before establishing relationships with the overseas banks. The bank also lacked adequate Anti-Money Laundering (AML) controls to curb the instance of money laundering and other financial crimes in real-time. In addition to this, GIB also failed to undertake annual reviews of the information it held on the banks it had a relationship with, failed to give staff adequate training on how to scrutinise transactions properly and did not establish appropriate policies and procedures for staff.

FCA Fines Gatehouse Bank £1.5m for Poor Anti-Money Laundering Checks

The Financial Conduct Authority (FCA) has fined Gatehouse Bank Plc £1,584,100 for significant weakness in its financial crime systems and controls. Between June 2014 and July 2017, Gatehouse failed to conduct sufficient checks on its customers based in countries with a higher risk of money laundering and terrorist financing. Gatehouse also failed to undertake the correct checks when some of the customers were classed as Politically Exposed Persons (PEPs). In one instance, Gatehouse Bank set up an account for a company based in Kuwait to aggregate customer funds. Gatehouse Bank did not require the company to collect information about customers’ sources of funds or wealth, which was required under Gatehouse’s Anti-Money Laundering (AML) policies. As a result, over a two-year period, Gatehouse accepted US$62,000,000 into the account without properly vetting the funds for financial crime risks. This example illustrates the risks of failing to have proper systems and controls.

Prominent KYC and AML Regulators Operational in the UK

The country’s response to financial crime is a collaborative effort. Policy ownership lies with the central government, led by the HM Treasury and Home Office, with some specific areas of policy-making managed by other government departments. The Scottish Government is responsible for making fraud preventive policies in Scotland. In Northern Ireland, the Department of Justice is the entity held accountable for overseeing criminal justice policies.  

The NCA’s Combatting Kleptocracy Cell was established in July 2022, which plays a viable role in responding to economic crimes. The department is majorly focused on investigating corrupt elites and Politically Exposed Persons (PEPs) laundering their assets within the UK. In addition to this, NCA’s  National Economic Crime Centre (NECC) was also established to deliver a step-change in response to combating serious and organised crimes. The centre brings together law enforcement authorities and other departments, including the Serious Fraud Office (SFO), HM Revenue and Customs (HMRC), Financial Conduct Authority (FCA), and  Crown Prosecution Service (CPS) under a mutual understanding to overcome the risk of economic crimes. 

Financial Conduct Authority (FCA)

The Financial Conduct Authority (FCA) is one of the major regulatory authorities working in the UK, responsible for regulating the financial industry of the country but works independently of the UK’s government. Financial firms, including stock exchanges, investment corporations, e-money exchanges, payment institutions, credit companies, asset managers, and banks are obliged to meet FCA’s regulations, such as implementing a risk-based approach like the one FATF recommends

The primary objective of the FCA is to detect, fight and curb financial crimes, making the UK free from money laundering and terrorist financing activities. According to the financial watchdog, every institute dealing in financial transactions needs to hire an entity called a Money Laundering Reporting Officer (MLRO) who can focus on Anti-Money Laundering (AML) activities to detect any suspicious activities that need an urgent response. Among all obligations, the most crucial factor in meeting FCA’s standards is conducting a risk assessment to categorise clients according to the risk of crime they possess.

Her Majesty’s Revenue and Customs (HMRC)

Her Majesty’s Revenue and Customs (HMRC), the UK government’s financial regulatory authority, specialises in tax-related crimes. HMRC is mainly responsible for tax collection and protecting the country’s border against illicit activities such as money laundering, terrorist financing, and drug trafficking. In addition to these responsibilities, the financial watchdog also collaborates with the Financial Conduct Authority (FCA) to conduct money laundering investigations. HMRC also places several obligations on businesses, particularly financial firms including authenticating the customers’ real identities and verifying the source of financial transactions to fight and deter the risk of money laundering. Moreover, the financial institutions under HMRC obligations must also maintain records of customers’ personally identifiable information and transactions.

National Crime Agency (NCA)

The UK’s National Crime Agency (NCA) is at the forefront when it comes to combating large-scale organised crime. Senior officers at the NCA are responsible for identifying and keeping track of major criminals. To ensure risk-free operation, the regulatory watchdog points out changes in financial crime patterns and imposes strict sanctions and penalties to curb criminal activities. The NCA has successfully fought money laundering and terrorist financing, among other financial crimes, since 2013. For instance, the authority closely monitors businesses and financial institutions that deal with large amounts of transactions. In case of suspicion, the NCA prosecutes companies and seizes assets to secure the UK’s economic landscape.

NCA also works jointly with international authorities as well as other UK agencies internally to mitigate the threats of money laundering and terrorist financing effectively. The agency also plans to arrange training sessions for AML compliance personnel to ensure the implementation of robust techniques for detecting the illicit flow of cash.

KYC & AML Regulations – UK Edition 

The Financial Conduct Authority (FCA) is one of the leading financial service regulators in the UK, which works tirelessly to oversee the country’s financial firms’ compliance with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. Various other financial watchdogs share responsibilities with FCA to investigate the proceeds of crimes including money laundering offenses. In addition, they also issue detailed guidance on AML in the UK, including the requirements for customer due diligence, enhanced due diligence, and transaction monitoring.

UK AML regulations are outlined in the following legislations:

European Union (EU) Anti-Money Laundering Regulations

The European Anti-Money Laundering and Terrorist Financing Directives are systematically designed to safeguard financial institutions from sophisticated fraudsters who exploit the economic systems to carry out money laundering and terrorism financing activities. The EU aims to develop universal AML regulations for all its Member States to help businesses fight money laundering in the EU Single Market. 


The European Commission (EC) established its first AML Directive (1AMLD) in 1991 to combat money laundering. Under this, essential Anti-Money Laundering (AML) standards were formed to counter terrorist financing (CTF). The obligations included customer identity verification, record keeping, suspicious activity reporting, transaction monitoring, and several other Customer Due Diligence (CDD) measures that all EU Member States had to follow along with their individual national laws. 

The EC introduced its Second Directive (2AMLD) in 2001 and the Third Directive (3AMLD) in 2006 while extending its scope, making Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) checks mandatory for lawyers, notaries, accountants, casinos, and real estate agents.

 In 2017, the European Commission came up with its fourth Anti-Money Laundering Directive (4AMLD), which further expanded the scope of AML/CFT regulation and made it mandatory for gambling businesses, all financial institutions, and several other designated non-financial businesses, as well as professions.


In 2020, the EC introduced its Fifth Anti-Money Laundering Directive (5AMLD), bringing a legal definition for the cryptocurrency industry. Under this directive, both virtual currencies and virtual currency service providers fall under existing AML & CFT regulations. In this directive, new requirements for pre-paid cards and high-valued goods were also formed, along with several updates in due diligence standards for high-risk countries.

However, as the world began to experience digitisation and regular cybercrime news became normal, the EC set out various proposals to strengthen the EU’s Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) regulations. In this regard, the regulatory authority emerged with the Sixth Version of AML regulation, providing a cohesive definition of money laundering across all EU Member Countries while mitigating the shortcomings in their local legislative frameworks. 

The 6AMLD also added “aiding and abetting” to the list of activities prone to money laundering risks. In addition to this, the 6AMLD also broadened its scope for criminal liability for money laundering to legal persons (companies and partnerships) in situations where they fail to meet obligations. To enforce the regulations, regulatory authorities have also increased the sentence for proceeds of crimes to a minimum of 4 years imprisonment. 

Moreover, the EU’s Anti-Money Laundering Authority (AMLA) was also part of the July Package, which will further fill gaps in legislative framework and financial systems that criminals currently use to launder illicit earnings. However, the package is still in the legislative stage, assuming a compromise agreement in Q4 2022 and a publication at the end of this year or beginning of 2023. The member countries can expect new rules to be applied by 2026. However, the AMLA is expected to be operational by 2024.

Proceeds of Crime Act

Proceeds of Crime Act (POCA) is the UK’s primary Anti-Money Laundering (AML) regulation introduced in 2002 which defined several offenses that constitute money laundering. These activities fuel and facilitate money laundering and the distribution of its criminal proceedings. Under this Act, financial institutions, particularly banks, need to incorporate adequate AML controls that must be sophisticated enough to detect money laundering activities, including identifying irregular transaction patterns, customer/enhanced due diligence, and an array of reporting obligations. 

The Terrorism Act

While the Proceeds of Crime Act (POCA) majorly focuses on money laundering offenses, the Terrorism Act is legislated to impose counter-terrorist financing regulations on financial firms and banks, which also includes almost the same obligations such as customer due diligence, transaction monitoring, and suspicious activity reporting requirements. However, this Act was introduced in 2000 for the first time in the UK but was amended by the Anti-Terrorism, Crime and Security Act 2001, the Terrorism Act 2006, and the Terrorism Act 2000 and Proceeds of Crime Act 2002 (Amendment) Regulations 2007.

Anti-Terrorism, Crime and Security Act 2001

In December 2001, the UK’s parliament approved the Anti-Terrorism Crime and Security Act 2001 (ATCSA), Part 4 of which gave authority to the Home Secretary to command the indefinite custody of foreign terrorist suspects. In addition, the only right of appeal for those detained under Part 4 was by way of the Special Immigration Appeals Commission (SIAC), established by the Special Immigration Appeals Commission Act 1997 following the Chahal judgement of the European Court of Human Rights [1996] ECHR 54. Due to the use of sensitive intelligence materials (such as evidence from covert surveillance), the evidence against detainees was partly open (which the detainee would view and which his or her lawyers would be able to challenge) and partly closed (which the detainee and his lawyers would be prohibited from seeing). Instead of being able to challenge the closed evidence, the detainee would be represented by a special advocate who would argue the case on his behalf in the closed proceedings but would not be allowed to communicate with the detainee.

Money Laundering, Terrorist Financing, and Transfer of Funds Regulations (MLRs) 2017

The United Kingdom’s government introduced the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) in June 2017 which emerged with several obligations for private sector businesses that are more prone to money laundering activities. The aim of this law is to restrict criminals from using professional services to launder their illicit gains by mandating the private sector take a risk-based approach. Companies are required to develop in-house identity verification mechanisms to verify their customers while monitoring their transactions to detect suspicious activities.

The Economic Crime and Corporate Transparency Bill

On 15 March 2022, the Economic Crimes (Transparency and Enforcement) Bill received Royal Assent becoming the Economic Crime (Transparency and Enforcement) Act 2022. The Act has been in the making for some time and can be traced back to 2016 when Prime Minister, David Cameron, warned offshore companies in an anti-corruption summit that they are obliged to disclose the beneficial ownership of UK properties. However, the bill was placed on a back burner following Mr. Cameron’s speech. The events in Ukraine re-ignited a desire to push through the Bill and it was fast-tracked through Parliament.

Economic Crime and Corporate Transparency (ECCT) Bill further imposed on kleptocrats, sophisticated criminals, and terrorists who abuse the country’s economy. The aim is to make the UK a trusted and well reputable place where legit businesses can operate without becoming part of money laundering schemes. In addition to this, ECCT also reforms to eliminate the risk of abusing limited partnerships, additional powers to seize cryptocurrencies seamlessly, and reforms to support information sharing to fight money laundering & economic crimes. By doing this, law enforcement authorities will have the power to gather information while removing regulatory burdens on businesses.

How Shufti Pro Can Help Businesses Meet Compliance

It’s crystal clear that Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance is essential for curbing the risk of financial crimes. Most customers and businesses agree that effective laws and regulations are vital for their growth. However, executing these procedures manually becomes a major problem as criminals find ways to exploit human entities. These practices need to be replaced with automated solutions that can guard entities against identity theft and inaccurate processing. In addition, the KYC check & AML screening procedures, in particular, must be robust and affordable while having increased accuracy and security.

Shufti Pro is a UK-headquartered IDV provider that offers a robust AI-powered AML screening solution for diverse businesses enabling them to remain compliant with industry-specific regulations. Companies can effortlessly identify suspicious and high-risk customers by cross-checking them against 1700+ watchlists to comply with global due diligence standards. Get 99% accurate results in a matter of seconds while balancing security and customer experience in real time.

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Customer Risk Assessment – A Landmark Approach to Fight Identity Fraud

Identity theft is the most prominent cybercrime which has raised alarms for global law enforcement authorities. Masterminds behind these scams are targeting all digital platforms, including e-commerce, ride-hailing apps, social media, and online gambling, which has made users vulnerable to risks of financial losses. The severity of identity fraud increases as criminals use stolen data to take over users’ accounts, make fake bank accounts, and carry out illicit financial transactions. The results remain disastrous for the affected persons as they lose their earnings without knowing about it.

The issue’s intensity can be judged by the fact that in the US alone, 42 million citizens became victims of identity theft, costing $52 billion in total losses. While onboarding any digital platform, users are asked to input their confidential details, which are further exploited by fraudsters. In fact, the service provider must secure their users’ information, but most platforms have inadequate screening measures, which ultimately aids bad actors in abusing the system. In such a situation, customer risk assessment is the most feasible approach, which can help businesses identify their users by applying strict checks and verifying their origins.

Identity Theft – A Looming Threat for Digital Businesses

Since the COVID-19 pandemic, the concept of using remote services has picked up the pace, and users prefer to visit digital platforms instead of going to offices. A large number of banks have introduced mobile apps for all types of transactions which has further provided attractive opportunities for criminals to steal someone’s identity, take over their account and transfer money to somewhere else. The majority of service providers have incorporated stringent checks like biometric authentication, two-factor authentication, and many others, but crime is still prevalent and increasing every year. The screening system based on the principles of customer risk assessment could be the most appropriate solution for online businesses as it can track the complete history of the users.

Account takeover is one of the leading issues that is increasing due to identity theft. The criminals use the stolen details of customers to log in to their bank or e-commerce accounts, further carrying out financial transactions. During the pandemic, a huge surge of 307% was witnessed in account takeover cases. Even now, when the effects of COVID-19 have almost diminished, criminals are involved in fraudulent activities in the same way. The Financial Action Task Force (FATF), the leading global organization fighting money laundering, has also suggested that online businesses should go for customer risk screening which is quite an ideal verification process.

How Law Enforcement Authorities are Countering Cybercriminals

Law enforcement authorities across the globe are facing the challenge of identity theft, and with time, criminal cases are increasing. Recently, several cases of identity fraud have been witnessed where cases were registered against criminals. Although countering the bad actors involved in online scams is quite gruesome, implementing customer risk assessment techniques can serve the purpose.

Let’s have a look at some of the high-profile cases of identity fraud:

Gang Members Sentenced to 60 Months in Prison for Identity Theft

The US Department of Justice has sentenced gang members to 60 months in prison who were involved in several online scams, including identity theft and wire fraud. It has been established during the investigation that they had been carrying out fraudulent activities for more than a year and during this time, they managed to steal $300,000 from the users. Court has further mentioned that no group or individual in the US will be allowed to defraud the users through online scams.

Criminals Jailed Over Multi-Million Identity Fraud in Spain

Spanish Police have arrested a gang that was involved in providing fake identities and forged documents to customers. The investigation revealed that criminals were stealing users’ data from different online platforms and further selling it in the black market. Police have stated that it was a multi-million scam, and all the criminals have been sent to jail.

Fighting Identity Fraud Through Customer Risk Assessment

Customer risk assessment is a set of extreme measures which are generally used by businesses to verify the identities of their customers when some new professional relationship is formed. B2B companies are also using customer risk screening methods to authenticate the documents and identities of other businesses before making any contract with them. It is an ideal process for all digital service providers as it provides in-depth knowledge about the other party and makes a record of their information. Customer risk assessment is not only a feasible solution against identity theft but also a valuable tool to counter money laundering.

Although several identity verification services are efficient enough to counter criminals, customer risk assessment is more advanced and modern, providing the best verification options to digital businesses. It involves various security checks, including checking customers’ identity, background, area of origin, business, and criminal record. All these parameters have remained quite productive in countering cybercriminals and helped many organizations comply with global regulations.

How Customer Risk Assessment Screening is Carried Out

Customer risk assessment is a technical process that involves multiple security checks, and users have to pass all of them to avoid being reported to authorities. All these screening measures have been recommended by the FATF, and companies with customer risk assessment models are following them to comply with the global guidelines.

Here are some of the prominent risk factors:

Customer’s Identity

Customer risk screening verifies the true identities while making a thorough background check. Corrupt politicians and business tycoons usually get more chances of laundering money or carrying out other financial crimes, so the system should be efficient enough to track users’ history to get updated knowledge about their economic activities in the past.


There are few regions in the world that have weak AML and other cyber laws, which ultimately help criminals to carry out crimes without much trouble. FATF has placed a large number of countries on grey or black lists, which means that all such states are vulnerable to financial crimes. The customer risk assessment process verifies the origin of the users and determines how stronger AML regulations are there.


Some businesses are notorious for corrupt practices, like gold, art & antiquities, and other luxury items. The customer risk screening method verifies the business of the users and makes a thorough investigation in case the customer is involved in some vulnerable business.

What Shufti Pro Offers?

Combating identity fraud is crucial for the digital sector and is the most appropriate time for companies to invest in screening measures. The customer risk assessment is an ideal solution for online service providers which will help them in countering financial criminals.

Shufti Pro is offering customer risk screening solutions which is the perfect solution for online businesses. It will not only help them in ensuring global regulatory compliance but will also secure their users’ identities. Shufti Pro’s Customer Risk Assessment (CRA) verifies the identities of users through the toughest parameters which will never let the criminals onboard the system. It is efficient enough to generate results in seconds with a ~99% accuracy.

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AML Screening for Luxury Items Industry – The Role of Shufti Pro in Ensuring Compliance

Money laundering is a global issue, and with emerging technologies, criminals are also using more advanced ways to carry out financial corruption. Since 9/11, almost all the major jurisdictions have been working tirelessly to eradicate money laundering due to terrorists’ involvement in this dirty business. Banks and other significant financial institutions have already implemented strict Anti-Money Laundering (AML) measures which have urged criminals to find more options for converting their illicit money into legal assets, and the luxury goods market has presented a viable alternative to them.

In 2021, the global luxury goods market was 283 billion euros, and this influx of money has encouraged bad actors to get involved in several financial crimes. Corrupt politicians and business tycoons across the globe are using this advanced technique to carry out heinous crimes. They invest their black money into the sector, layer it under the expensive items purchases and then export them to other countries while making their illegal income legit.

Luxury Goods Market – A Vulnerable Sector

The United States, United Kingdom, China, France, and Germany have the most significant luxury markets, and the crime ratio in all of these countries is also elevating. Expensive cars, yachts, watches, and diamonds are the primary items that are usually used by criminals to disguise their black money. Unlike other financial institutions, the luxury items sector lacks stringent security measures, making it pretty vulnerable to monetary scams. This is the major reason that in the current time, money laundering through expensive purchases is quite prevalent, and criminals prefer this sector over others to carry out scams.

Financial Action Task Force (FATF), the leading global watchdog working to curb money laundering, has also termed the luxury items sector to be highly vulnerable to financial crimes. It has also instructed all the member-states to enforce a comprehensive framework to regulate this industry and make it secure for sophisticated investors. In the wake of this, all the major jurisdictions are trying to address this challenge through Anti-Money Laundering (AML) and Know Your Customer (KYC) solutions.

Role of Law Enforcement Agencies in Securing Luxury Goods Market

The law enforcement authorities of all the affected countries are working tirelessly to counter the money launderers and bring them under the law. The global financial watchdogs are fighting this war with different states, and so far, the results are in their favor as they can dismantle a large number of criminal gangs.

Let’s have a look at some of the high-profile cases of money laundering through the luxury goods market across the globe:

$32 Million Luxury Goods Scam in Singapore

Singapore Police arrested two criminals trying to export $32 million worth of luxury goods to other countries. During the investigation, it was found that the fraudsters had been smuggling expensive items for many years. Law enforcement authorities have tracked down several bank transactions which are related to money laundering. A case has already been filed against both criminals, and Police are carrying out investigations to present more evidence before the court.

Luxury Goods Seized in International Money Laundering Investigation

The Australian Federal Police (AFP) along with other global law enforcement agencies, raided a storage unit in Canberra while seizing $10 million luxury assets and $1.5 million in cash. Besides this, a number of documents and electronic devices have also been captured that were used in illegal financial transactions. Police have arrested all the criminals and doing further investigation to charge them in court. The fraudsters are expected to be imprisoned for up to 10 years as per the nature of the crime.

FATF’s Recommendations for Luxury Items Market

The Financial Action Task Force (FATF) has recognized the luxury items market as a huge threat to the existing financial system due to its vulnerability to money laundering and terrorist financing. FATF has termed precious gems, watches, cars, yachts, and airplanes to be the most common goods which are used by criminals to carry out financial crimes. A set of special guidelines have been issued to member-states by the FATF, and they are binding to all the countries; failing to do so can even lead to their names being pushed to sanctions lists. FATF has made it mandatory for all the involved actors to verify the identities of all the people who are dealing with the luxury items and report to local authorities in case of any suspicious activity.

Rules and Regulations Monitoring Luxury Goods Sector

In the wake of increased scrutiny by FATF, all the member countries are legislating new laws countering the money launderers and terrorist financiers. With all the new legislation, it has become quite difficult for criminals to disguise their original wealth under expensive purchases.

Here are some of the prominent laws enforced in different countries:


Corruption, Drug Trafficking, and Other Serious Crimes Act (CDSA) is the primary law in Singapore that has been legislated to curb money laundering and terrorist financing. As per the CDSA, money laundering through the luxury items sector is a criminal offense that is punishable by up to 10 years. It is essential for all the industry stakeholders to implement KYC measures to keep a record of all the customers so that it can be used in case of any illegal activity.

South Korea

Under the Criminal Proceeds Act of South Korea, money laundering using any means is a serious criminal offense punishable for more than five years, and a fine of up to 30 million won. This act also covers the luxury items sector and terms it to be highly vulnerable to money laundering while issuing guidelines to business owners to implement AML measures and make a record of all the purchases through an effective KYC solution.

Ensuring Compliance and Securing Luxury Items Market Through AML Solutions

Money laundering through the luxury items sector is a threat to the overall financial system, and the global watchdogs must regularize this sector. The most optimum solution to curb this menace is through effective AML measures, which not only keep the criminals away but also report to law enforcement authorities in case of any violation of the law. It is quite a judicious approach to consult with the money laundering data accumulated by FATF and Interpol, which can help in identifying the criminals while onboarding. Unless such an ideal system is implemented, the luxury items sector will remain unsafe for sophisticated users posing threats to global economies.

What Shufti Pro Offers?

Eliminating money laundering and terrorist financing from the luxury items market is crucial for ensuring transparency in the system. The whole industry is in dire need of an effective AML solution that can identify criminals and report them to law enforcement authorities.

Shufti Pro’s AML screening solution is the most viable solution for the luxury goods industry to comply with global guidelines. Shufti Pro’s AML solution screen the users’ data against 1700+ sanctions lists and provides results in seconds with 99% accuracy.

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Ensuring KYC/AML Compliance In Cryptocurrency Firms – The Role of Shufti Pro

With emerging technologies in the financial industry, cryptocurrency is picking up the pace, and investors prefer to multiply their money through this new industry. Although cryptocurrency still has a long journey to replace fiat currencies, it contributes a lot to the monetary system, which has changed the whole economic system. A large number of online service providers accept cryptocurrency as a mode of payment, and people are extensively using such platforms. Besides this, many companies across the globe have started paying their employees’ salaries in crypto, which is denting the use of fiat currencies.

In 2021, the overall size of the crypto market crossed $3 trillion, with an expectation to increase in the coming years. This massive influx of revenue in the crypto sector has encouraged criminals to participate in fraudulent activities by getting involved in money laundering, terrorist financing, and other monetary scams. Besides the fact that the market is growing with the passage of time, the authorities are not putting serious efforts into regularizing it, which has created a lot of loopholes in the whole system. Implementation of identity verification and Anti-Money Laundering (AML) screening solutions can help the crypto firms to counter the prevailing crimes and put the culprits under the law.

Crypto Firms – The Hub of Financial Crime?

In order to understand the increasing crime percentage, it is critical to know about the mechanism behind cryptocurrency. All the crypto coins are working on Digital Ledger Technology (DLT) principles, which is entirely a decentralized system without a single authority. This is the point that helps the criminals to disguise their original identities or register at platforms using stolen details, and once they onboard the system, it becomes quite challenging to track them due to the decentralization. So, the most viable solution for this sector is to counter the fraudsters during the onboarding and report them to law enforcement authorities.

In 2021 alone, $3.2 billion of cryptocurrency was stolen, which is 72% more compared to the loss in the previous year. All the global financial watchdogs have also highlighted the vulnerabilities of crypto exchanges to money laundering and terrorist financing while instructing all the member countries to comply with the guidelines countering the bad actors in the system. Although the year 2022 is not going well for cryptocurrency as the overall value of all the coins, including Bitcoin and Ethereum, has fallen to their lowest, the experts predict that it will pick up the pace soon. While it will be back on track in the coming time, criminals will also be participating more vigorously in fraudulent activities. So it is the most appropriate time for the crypto exchanges to invest in the Know Your Customer (KYC) and AML measures to help combat all types of financial crimes.

How Law Enforcement Authorities are Working to Counter Criminals

Due to the increasing crime ratio and pressure mounting by the global financial watchdogs, all the major jurisdictions are working efficiently to address the challenge of money laundering through crypto firms. China, USA, Canada, and Europe are the major regions that are affected by cybercrimes and several cases have been witnessed in these countries, which shows the commitment of law enforcement authorities toward countering bad actors.

Gang of Eight Criminals Arrested for $100 Million Crypto Scam

During an international investigation, the UK Police arrested a gang of eight criminals who were involved in hacking celebrities’ crypto accounts and stealing the funds. The UK’s National Crime Agency (NCA) has stated that fraudsters were engaged in these activities for many years, and during this time, they managed to steal $100 million out of different accounts. The NCA has not revealed the name of the celebrities and mentioned that cases had been registered on all the criminals, and the court will be deciding their fates.

Fraudsters Convicted for £21m Loss in Cryptocurrency

Four offenders were convicted in the UK who were found to be responsible for fraudulently obtaining and laundering Bitcoin worth millions of pounds from an Australian-based cryptocurrency firm. During the investigation, the law enforcement authorities raided a place suspected to be the residence of criminals and seized illicit cash and gold. The court and Police have convicted all the fraudsters and warned all criminals involved in illegal activities.

FATF’s Role in Regularizing the Crypto Firms

The Financial Action Task Force (FATF) is the leading global watchdog that is working to address the challenge of money laundering and terrorist financing. Since 9/11, all the major jurisdictions have implemented stringent regulations under the light of FATF’s guidelines which has helped law enforcement authorities a lot in countering criminals. It is just more than a decade since cryptocurrency has come into the mainstream, and in a few years, it has attracted the attention of global watchdogs.

FATF has termed virtual assets to be a lot of beneficial for users but is also exposed to risks of money laundering and terrorist financing. Along with other global organizations like G20, FATF has formed a joint comprehensive framework and issued guidelines. It has made binding for all the member states to implement identity verification and anti-money laundering measures to counter criminals while onboarding. FATF has collected the data of money launderers in the form of sanctions lists and instructed all the crypto exchanges to screen their users’ data against these lists and report the suspected ones to local law enforcement authorities.

Balancing KYC/AML Compliance in Crypto Exchanges

KYC is a process by which crypto exchanges can identify and verify the true identities of their users. The KYC process involves biometric verification and document authentication in real-time using several advanced techniques. Using an effective identity verification system, it becomes almost impossible for criminals to onboard the system using fake or stolen identities. So if the crypto firms go for the KYC approach, there will be strong chances that cybercriminals will be eliminated during the verification checks.

Moreover, AML screening is also a simple procedure that can help the cryptocurrency platforms to screen data of their new and existing users against the global sanctions and Politically Exposed Persons (PEPs) lists and report the criminals to law enforcement agencies, restricting their access to the system. Incorporating KYC/AML measures will not only help the crypto platforms counter the criminals but also make them a secure place for sophisticated investors.

How Shufti Pro Can Help

Combating money laundering, identity theft, and terrorist financing is quite crucial for the crypto industry. Right now, the sector is witnessing a big recession, making it the perfect time for exchanges to invest in KYC/AML measures.

Shufti Pro’s KYC identity verification services are the perfect solution for crypto firms to help them verify the users’ true identities. Furthermore, the AI-powered AML screening solution by Shufti Pro has access to 1700+ sanctions lists and screening data against them; it provides results in seconds with a ~99% accuracy.

Would you like to get more information about KYC/AML solutions for crypto firms?

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Ensuring Compliance and Securing Business Reputation – How Shufti Pro Can Help

In the highly digitized world, businesses are partnering with each other to serve mutual interests, commonly known as Business-to-Business (B2B) relations. In all such partnerships, it is quite crucial for all the involved parties to remain vigilant while interacting with each other. Due to the increasing cybercrime percentage, B2B bondings are also greatly affected, and criminals are using sophisticated techniques to defraud other businesses while exploiting loopholes. The primary reason behind B2B fraud is that companies are far away from each other and do not incorporate the right solutions to verify the other party.

A survey has shown that 68% of the B2B firms in retail and manufacturing are unsatisfied with the fraud solutions and termed the overall system to be highly vulnerable to scams. So in such a situation, it has become essential for all B2B companies to find the perfect solution which is available in the form of Know Your Business (KYB). Through an efficient KYB, businesses can verify identities, documents, and information about the higher management of other companies, which can eventually end in making a secure bond.

Know Your Business – An Overview

Know Your Business (KYB) is a verification procedure that is widely used to determine the legitimacy of other companies, ownership structures, and official documents. KYB process enables organizations to establish whether they are dealing with an authentic company or just a shell company that has its presence only on paper. KYB also makes sure that the partnering organizations are not involved in illicit activities through various checks, particularly Anti-Money Laundering (AML) and Know Your Customer (KYC). With the B2B model picking up the pace, KYB has become need of the hour which can help firms to maintain secure digital business relations with other companies.

In the US alone, B2B e-commerce revenue reached $6.7 trillion in 2021, and due to this high inflow of money, criminals have found attractive crime opportunities in this sector. The KYB process is getting advanced with time and there are multiple factors, including identity verification, document authentication, and Ultimate Beneficial Owner (UBO) checking, which are used to verify the credibility of other businesses. Once any organization manages to pass through these stringent screening measures, there remain fewer chances of that particular company doing any fraudulent activity in the future.

How Law Enforcement Authorities are Countering Criminals

Rapid digitization has made the world a global village which has eventually aided criminals in carrying out fraudulent activities and get away without any trial. All the major jurisdictions have now legislated strict cybercrime laws empowering law enforcement authorities to counter criminals and put them under the law.

Let’s have a look at some of the high-profile criminal cases which have surfaced in the recent past:

Russian Nationals Arrested in US for Money Laundering Through Shell Companies

Five criminals belonging to Russia have been arrested in the USA who were involved in money laundering through shell companies. The authorities have revealed that scammers conduct a lot of illicit financial transactions using fake companies which were just present on paper. Police have also stated that two other gang members managed to fly to other countries, and efforts are going on to extradite them back to the US. All the criminals have been charged in court, where investigations are still going on to decide their penalties.

British Shell Companies Linked to 52 Money Laundering Scandals

UK law enforcement authorities have revealed that shell companies belonging to their country have been found to be involved in 52 money laundering scandals worth 80 billion pounds. Investigations are underway to dismantle the gang involved in these fraudulent activities, while the UK Treasury has ordered the security agencies to conduct an audit of all the online companies and verify their authenticity.

Global Regulatory Authorities Monitoring Online Businesses

While the crime percentage is increasing in the digital sector and businesses are facing billions of financial losses in B2B relations, lawmakers across the globe are struggling to fix this issue. It is entirely in the interest of the states to regularize this sector as it has the potential for considerable investments.

Let’s study the prevailing laws monitoring B2B relationships in different countries:

United States

Federal Trade Commission (FTC) is the primary authoritative body responsible for enforcing regulations in B2B companies. As per the law, it is mandatory for the firms to get registered through the FTC and then start their operations. It is also crucial for all digital businesses to verify their partners through AML and KYC screening measures and make a record of financial transactions.

United Kingdom

All the B2B companies in the UK are subject to competition laws, and it is essential for involved parties to carry out stringent monitoring of their partners. The Sales of Goods Act (1979) applies to B2B firms, which has made it mandatory for all the stakeholders to keep a record of other company’s information, including UBOs, addresses, nature of business, and records of financial transactions.


Canada is regulating the whole B2B business relations through Anti-Spam Law which has termed any financial irregularity in the sector a criminal offense. In the recent past, several companies in Canada have been asked to stop their operations for not completing the minimum AML and KYC requirements.

Safeguarding Businesses Through Know Your Business (KYB) Solution

rapid digitization across the globe has encouraged companies to form a virtual bond with other businesses and cooperate with each other to serve their mutual interests. Although this model has helped the firms to successfully meet their targets, it has also encouraged the bad actors to get involved in criminal activities due to the loopholes present in the system. Know Your Business (KYB) is the most viable option for the whole B2B sector to identify the true identities of their partners, the nature of businesses, and past records of their financial activities. Once any business partners with another one after following the KYB protocols, there remains less chances of any fraudulent activity.

What Shufti Pro Offers?

Safeguarding the B2B companies’ reputation is quite crucial for the whole sector to ensure global compliance and transparency in the system. The B2B concept is growing in the whole world and it is the right time for companies to invest in KYB measures.

Shufti Pro’s state-of-the-art KYB solution is the ideal option for B2B companies to secure their assets and maintain a good reputation in the market. The KYB solution is efficient enough to conduct the KYC and AML screening of other companies while authenticating all financial details of other firms. Shufti Pro’s KYB screening measures generate results in a matter of seconds and provide output with ~99% accuracy.

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SEPA Instant Credit Transfer Schemes – Disrupting the Financial Sector in 2023

There is no denying the fact that the financial industry has vital importance in the contemporary world. Rapid digitization has altogether changed the whole concept of managing finances which is eradicating the use of cash and promoting digital transactions. Especially during COVID-19, the idea of using online means for fund transfer has intensified, and now when the effects of the pandemic are diminishing, it has become a new norm to opt for digital solutions for all operations. This is the prime reason that regulatory authorities across the globe are working tirelessly to find swift and efficient methods for fund transfer.

In 2021, 38% of businesses reported expanding their digital options, and there are chances that this number will rise to 53% in 2022 as more merchants are expected to adopt online methods for their payments. In the wake of the rising need for digital options for businesses, European Union has taken a landmark step to harmonize all 36 countries by introducing a uniform payment system. The European Payment Council (EPC) has initiated the instant payment solution “SEPA (Single Euro Payments Area) Instant Credit Transfer (SCT Inst),” which ensures local and cross-border euro credit transfer throughout the Single Euro Payments Area (SEPA) zone. Considering the opportunities and challenges businesses face with the advance of SCT Instant transfer, the digitalization of the economy brings the need to make and receive payments 24×7 and have immediate availability, all of which are being supported by the scheme.

Insights Into SEPA Instant Credit Transfer Scheme (SCT Inst)

The SEPA credit transfer is the latest technology that allows the euros transaction to be processed in seconds across the whole region. It was launched in November 2017 by the European Payment Council (EPC) with the aim to remove fermentation in the payment landscape while providing an efficient and swift borderless fund transfer service. Unlike all other payment service providers, the speed is independent of your account-providing company and all other factors. If both companies are registered under the Instant SEPA transfer scheme, the transaction will be smooth and will be completed in a few seconds.

EPC has devised an efficient payment solution in the form of SEPA Instant transfer which is available 24 hours a day on all calendar days of the year, allowing the transfer of amounts up to 100,000 Euros to other affiliated accounts in less than 10 seconds. ECP has yet to make it mandatory for all financial organizations to follow this scheme; instead, it has been made optional, which state institutions recommend. All the monetary transactions through the SEPA Instant Payment scheme will be subject to uniform standards, resulting in fast and easy circulation of money across all 36 countries.

How Does SEPA Instant Credit Transfer Scheme Work?

In the traditional banking system, the credit/money transfer is managed in batches which means all the users will make payments to the banks, and it will be processed in a big single batch at any specific time of the day. The fundamental reason for the banks to get delayed is that they have to get clearance and settlements before processing the transaction. On the contrary, the system offered by SCT Instant Payment works on a different model and processes the payment in real-time. This is why the traditional fund transfer system can never match its speed, and users prefer to opt for the swift method.

The Necessity of Instant Payment in the Eurozone

After the devastation caused by WWII across the European region, the authorities took a landmark step to merge the whole region into a single trading unit while adopting one currency. Single Euro Payments Area (SEPA) was implemented across all countries which has made it a huge trading market in the whole world. This is the most significant reason that the payment system across the whole continent is the same and is administered by European Payment Council (EPC). In 2021, non-cash payments in Eurozone increased by 12.5% to 114.2 billion compared to the previous year. In the wake of rising digital financial transactions, EPC initiated the SEPA Credit Transfer Scheme, which has facilitated users in expediting their transactions.

With emerging technologies and rapid digitization, the online system has advanced to a large extent transforming financial transactions. In order to keep pace with the fast-evolving digital system, EPC introduced the SEPA urgent payments policy, which is now implemented across all 36 countries. The banks and other payment service providers just have to register themselves under the  SEPA SCT Inst scheme, which could let them transfer their funds to anywhere across the region in less than ten seconds. The most important feature that has made the plan quite attractive is its availability for businesses and individuals.

Impacting the Payments Landscape

The launch of the European SEPA SCT Instant scheme has set a development towards cross-border real-time payment services between connected banks and other financial organizations. Payment Service Providers (PSPs) can now develop overlay services around B2B invoice payments for corporates. This is particularly useful for businesses that want to implement immediate cash management practices. Firms can also achieve cost savings by efficient use of cash and the streamlining of the reconciliation process.

Moreover, instant credit transfer scheme will also help the whole Eurozone to merge into a single payment circle. Although not mandatory, EPC is encouraging all financial institutions, particularly banks, to get registered under this scheme which will ultimately make a uniform financial system leading to the institutions falling under a single banner.

Amendments in SEPA Instant Credit Payment Scheme

The SCT Payments scheme was introduced in 2017 by the EPC, and since that time, the authorities have kept updating it to address the prevailing financial challenges. Up till now, EPC has issued three different versions of the SEPA finance scheme having updates as per the economic circumstances in the region. Moreover, the SEPA credit transfer rulebook is also issued by the EPC having all the detailed guidelines about the whole scheme:

Let’s have a look at all the different versions of the SEPA Credit Transfer Instant scheme:

SCT Inst Rulebook Version 1.0

In November 2020, the European Payments Council (EPC) published updated and enhanced versions of the SEPA  Credit Transfer (SCT) and SEPA Direct Debit (SDD) rulebooks. The 2021 SEPA Instant Credit Transfer rulebook version 1.0 entered into force on 21 November 2021 at 08:00 CET and remained in effect up to 11 January 2022 08:00 CET. The Implementation Guidelines of version 1.0 were based on the relevant ISO 20022 XML message standards.

SCT Inst Rulebook Version 1.1

The SCT Instant Credit Payments rulebook currently in effect up to April 25, 2023, at 08:00 CET is the 2021 rulebook version 1.1, which was enforced on January 11, 2022, at 08:00 CET. The guidelines of version 1.1 are also based on the relevant ISO 20022 XML message standards. It reflects the disbandment of the Scheme End-User Forum (SEUF) and makes it optional for banks and other financial institutions to follow this scheme.

SCT Inst Rulebook Version 1.2

SCT Instant Credit Payments Rulebook Version 1.2 will come into effect from 25 April 2023 at 08:00 CET up to 19 November 2023 at 03:00 CET. Version 1.2 has no specific impact on the business and operational rules compared to the previous version. It will also be working on the principles of ISO 20022 XML message standards and proposes a few changes which will be disclosed in the next section.

How is European Payment Council (EPC) Dealing with Contemporary Challenges?

EPC is vigilant towards making the scheme efficient enough to deal with all the contemporary financial challenges. This is the reason that after an appropriate time, they are issuing new versions of the SCT Inst and SEPA rulebook having all the necessary changes in it. The current implemented version is SCT Inst 1.1, which is going to be replaced by version 1.2. Let’s have a look at the changes which are going to be part of this latest version and have all the essential changes as per the new developments:

  1. In order to cater to both retail and Financial Institution-to-Financial Institution payment use cases, the term ‘Customer’ is replaced by the term ‘Payment Service User’ (PSU).
  2. The payment service users are allowed to send a structured address of the Originator and/or the Beneficiary in electronic Customer-to-PSP files.
  3. Inclusion of the Proxy/Alias of the payment account of the Originator and/or of the payment account of the Beneficiary as an optional attribute in certain datasets.
  4. Extra clarifications about the charging principles.

Opportunities Provided to Investors by Instant Credit Payment Scheme

The Instant credit transfer scheme by the European Payment Council has provided individual users and digital businesses with a myriad of fund transfer opportunities, which has eased multiple operations for users. Here are some of the prominent benefits that financial organizations can avail by enrolling in the SCT Inst scheme:

  1. Enter into the scheme; instant sepa credit transfer allows you to make payments to suppliers and receive payments from customers in Euros from anywhere in the SEPA zone, 24×7, with full settlement certainty.
  2. Join SEPA credit transfer instant policy and benefit from standardization and error reduction: a single format for the entire SEPA zone based on the ISO 20022 XML simplifies multi-country payments.
  3. Simplify reconciliation processes with up to 140 characters of narrative information through SEPA online banking.
  4. Consolidate redundant low-volume Euro accounts from several countries into fewer locations with SEPA instant transfer banks structure.
  5. EPC website contains the SEPA Instant credit transfer bank list, which can help users in getting information about banks registered under the policy.
  6. Centralize your internal operations and transactions into one point (e.g., to a Payment Factory or Shared Service Centre).
  7. Maximize your liquidity with round-the-clock transactions, with immediate credit to your account 24×7 with the SCT SEPA credit transfer method.
  8. Maximize your cash flow efficiency with just-in-time payments that can take place during non-traditional business hours, including weekends.
  9. By studying the sepa sct rulebook, all the information related to funding transfer can be acquired.

Instant Credit Payment Scheme and Financial Crimes

Although the EPC has worked a lot to ensure safety and security in money transfer credit card, there are still strong chances of a myriad of financial crimes. European Union is a vast trading market and due to the high influx of money on the net, criminals try to exploit all such platforms through a large number of illicit activities, particularly money laundering, terrorist financing, and identity theft. Balance transfer credit cards and other transactions through this scheme are prone to all these risks, which must be addressed by the authorities.

Money Laundering

Money laundering is one of the top crimes associated with all financial organizations. It is costing 2% to 5% of the global GDP every year which made it a highly potent crime for all the trading markets. It is estimated that EUR715 billion to EUR1.87 trillion is laundered only in the European market, which ultimately raises risks for SCT Inst. As it is providing a lot of ease to the users to transfer their funds across all the member-states within seconds, there are strong chances that criminals will try to exploit all these platforms to transfer their illicit money to other countries. It is in the higher interest of online service providers to implement stringent Anti-Money Laundering (AML) measures which should have access to global financial sanctions lists and counter criminals while screening data against them.

Identity Theft

Identity theft is one of the most prominent crimes linked to digital businesses which is inflicting financial losses on users. It is estimated that 25% of Europeans have experienced fraud in the form of stolen identity at some point while doing online transactions. Criminals stole the identities of sophisticated users and various onboard platforms using that information while inflicting financial damages on them. The SEPA instant credit transfer banks are also exposed to the threats of identity fraud which bad actors could exploit. In order to minimize the risks of this particular crime, the platforms should implement an efficient system of Know Your Customer (KYC) and Know Your Transaction (KYT), which will ensure safe and secure fund transfers through all platforms.

How to Ensure KYC/AML Compliance in European Financial Sector

With emerging technologies, criminals are also finding advanced and modern means of committing fraud with digital platforms. Although European Payments Council has introduced quite a revolutionary scheme for the financial industry, it has also become necessary to accompany it with modern solutions efficient enough to counter fraudulent activities. Besides assisting sophisticated users, the scheme is also quite favorable for criminals and contains a lot of loopholes.

Money laundering threats are largely associated with it, and ensuring AML compliance for all digital platforms is quite crucial. The Financial Action Task Force (FATF), the primary body working to counter money launderers, has accumulated huge data in the form of sanctions lists that must be consulted while onboarding new users. It will not only help the authorities to counter criminals but will also ensure a seamless onboarding system.

To add to it, identity theft is another major issue associated with online financial transactions, which can be curbed using efficient KYC measures. Biometric authentication and document verification are the most important parts of the KYC solution, which can counter criminals with stolen identity while onboarding and ensure global compliance. By implementing KYC checks, all the platforms can verify the true identities of their users while maintaining a thorough record of them for any future use.

How Shufti Pro Can Help

Combating money laundering and identity theft is crucial for all digital platforms registered under the EPC credit transfer scheme. It is a vital chance for all payment service providers, and it is here to stay. It is in the higher interest of the businesses to invest in the AML/KYC solution to ensure the secure use of their services.

Shufti Pro’s reliable Know Your Customer (KYC) solution is the ideal option for all digital platforms opting for the Instant Credit Payment scheme. By incorporating advanced security checks, particularly biometric authentication of users and document verification using Optical Character Recognition (OCR) technology, companies can securely onboard customers and keep a record of financial transactions.

AML screening solution by Shufti Pro has access to 1700+ sanctions lists by global financial watchdogs and screens users’ data against them while generating results in a matter of seconds with a ~99% accuracy. 

Want to know more about our AML solutions to comply with the Instant Credit Payment scheme?

Talk to a KYC/AML Expert

Securing Instant Money Transfers in the Banking Sector – EPC’s New Rulebook

Financial services have always played a vital role throughout the entire history of advanced human civilization. In the modern world, when war fronts have shifted from a battlefield to economic and technological arenas, most developed world countries are putting maximum efforts into adapting the latest payment methods for daily monetary transactions. The faster the payment transfer method, the more chances for the economy to oscillate faster. Instant payment services are quite prevalent nowadays and have altogether revolutionized the entire financial sector by providing swift services to users across the globe.

In the UK alone, £1.3 billion was stolen in 2021 through different fraudulent techniques. Moreover, 195,000 cases were reported for payment fraud in the same year, which shows the financial sector’s vulnerability. In the wake of the rising crime rate in the monetary sector, the European Union initiated the instant payment solution “SEPA Instant Credit Transfer (SCT Inst),” which ensures local and cross-border euro credit transfer throughout the Single Euro Payments Area (SEPA) zone. Although highly secured, it is still vulnerable to crimes, particularly money laundering and identity theft which should be taken into account through advanced security measures.

The Need for Instant Payment Services in Europe

The European Union is a vast financial market comprising 36 countries where the authorities have developed a trade-free zone called ‘SEPA’ across the member states to ensure smooth trade. Due to rapid digitization, customers demand fast payment methods and settlement times for fund transfers which has urged the authorities to find powerful money transfer methods that can facilitate the users. In order to establish a speedy process, there are a large number of instant credit payments providers in the EU, including Bluesnap, Vapulus, Skrill, and 2CheckOut, working in all these countries, which have provided a lot of ease to users and businesses. These instant electronic payment methods have greatly helped in establishing trust between clients and their customers.

Banks across Europe are also providing instant payment services by connecting to the SEPA Instant Credit Transfer scheme. Instant Credit Payment policy by the European Payments Council (EPC) has facilitated the whole economic system by introducing the most viable and fast options for money transfers. The excellent part of the Instant Payment Credit scheme is that it is available to both individuals as well as businesses, allowing for the  transfer of Euro credits anywhere across the territory in a matter of seconds.

SEPA Instant Credit Transfer Scheme (SCT Inst) – An Overview

SEPA Instant Credit (SCT Inst) is an optional payment scheme that was launched in November 2017 by the European Payment Council (EPC). It provides an instant payments solution that is available 24 hours a day on all calendar days of the year, allowing the transfer of up to 100,000 euros to other accounts in less than 10 seconds. The primary aim of introducing the Instant Credit Payment scheme was to avoid fragmentation of the SEPA payment landscape while providing a real-time borderless payment solution with efficiency and consistency. All the financial transactions under this scheme are subject to a uniform set of standards and conditions through which the money can easily circulate in national markets.

Instant Credit Transfer Scheme Features

  • Instant Credit Payment is based on XML ISO 20022 and SEPA Credit Transfer standards. It is available 24 hours a day, 365 days a year; there are no cut-off times.
  • The maximum execution time for Instant Credit payment is 10 seconds, and the funds are immediately available for the beneficiary.
  • The full amount is credited to the beneficiary; and the shared fees are mandatory.
  • The maximum amount of SEPA Instant Payments is 100,000 euros per payment.
  • The Remittance Information of 140 characters and End-to-End ID of 35 characters supplied by the payer is forwarded in full and without alteration to the beneficiary.

Requirements to Make a Payment Through Instant Credit Payment Scheme

Payment Service Providers (PSPs) are required to submit the following items to make a payment:

  1. The IBAN of the account 
  2. The amount of the payment
  3. The IBAN of the account of the Beneficiary to which the payment is to be made
  4. The name of the Beneficiary to whom the payment is to be made
  5. The Originator’s reference for the payment, if applicable
  6. Any other data or information required to be included under the SEPA Rulebook or requested by the Bank from time to time

SEPA Instant Credit Transfer Rulebook

The European Payment Council (EPC) has issued a detailed rulebook comprising a set of guidelines to establish a framework for an instant credit transfer scheme. The authorities keep updating the rulebook as per the prevailing financial circumstances in the region.

Let’s have a look at the Instant Credit Payment scheme version 1.1, which is currently implemented, and the latest one, version 1.2, which will come into effect from April 2023:

SCT Inst Rulebook Version 1.1

The SCT Instant Credit Payments rulebook currently in effect up to April 25 2023 at 08:00 CET is the 2021 rulebook version 1.1, which was enforced starting January 11 2022 at 08:00 CET. The Implementation Guidelines of version 1.1 are based on the relevant ISO 20022 XML message standards. It reflects the disbandment of the Scheme End-User Forum (SEUF) and makes it optional for banks and other financial institutions to follow this scheme.

SCT Inst Rulebook Version 1.2

SCT Instant Credit Payments Rulebook Version 1.2 will come into effect from 25 April 2023 at 08:00 CET up to 19 November 2023 at 03:00 CET. Version 1.2 has no specific impact on the business and operational rules compared to the previous version. It is also based on ISO 20022 XML message standards and proposes a few changes which will be disclosed in the next section.

Prominent Changes Introduced in 2023 SCT Inst Rulebook

  • In order to cater both retail and Financial Institution-to-Financial Institution payment use cases, the term ‘Customer’ is replaced by the term ‘Payment Service User’ (PSU).
  • The payment service users are allowed to send a structured address of the Originator and/or the Beneficiary in electronic Customer-to-PSP files.
  • Inclusion of the Proxy/Alias of the payment account of the Originator and/or of the payment account of the Beneficiary as an optional attribute in certain datasets.
  • Extra clarifications about the charging principles.

Risks of Financial Crimes in Instant Payment Services

Besides the fact that the European Payment Council (EPC) has enforced stringent security measures to halt criminal activities, there are still chances of money laundering and other financial scams. Instant Credit Payment scheme allows the transfer of Euro credits across all 36 countries which makes it highly vulnerable to money laundering. It is in the highest interest of all the platforms coming under this scheme to incorporate strict Know Your Transaction (KYT) and Anti-Money Laundering (AML) screening measures to discourage all bad actors from laundering their black money to other countries using the Instant Credit Payment scheme. 

Ensuring Smooth Implementation of SEPA Instant Credit Transfer Scheme

Know Your Transaction (KYT) is the most reliable option for securing all the digital platforms coming under the instant credit scheme. By verifying the true identities of all the users through several methods, particularly document authentication and facial recognition, companies can keep a detailed record of customers and transactions, using it as needed in the case of any alleged criminal activity.

Moreover, the security system should be efficient enough to counter the money launderers who try to export their black money to other countries using digital channels. The Financial Action Task Force (FATF), European Union, and Interpol have accumulated vast data on money launderers in the form of sanctions lists which must be consulted in order to track criminals and report them to authorities.

How Shufti Pro Can Help

Shufti Pro’s reliable Know Your Customer (KYC) solution is the ideal option for all digital platforms opting for the Instant Credit Payment scheme. By incorporating advanced security checks, particularly biometric authentication of users and document verification using Optical Character Recognition (OCR) technology, companies can securely onboard customers and keep a record of financial transactions.

The AML screening solution from Shufti Pro has access to 1700+ sanctions lists by global financial watchdogs and screens users’ data against them while generating results in a matter of seconds with a 99% accuracy.

Would you like to know more about our AML solutions to comply with the Instant Credit Payment scheme?

Talk to an AML Expert

How Identity Verification Eliminates Social Media Scams to Enhance User Experience

Social media has experienced exceptional growth in the past decade as a result of advancements in internet accessibility and speeds. In their infancy, social media platforms were hardly a big part of the internet. As time passed, the monumental growth of social media platforms like Facebook, Instagram, and Twitter has taken their usage to new extremes, even playing a critical role in altering election outcomes. However, all this growth and evolution does come with some serious implications for users as well as the platforms. 

The insufficiency of identity verification measures on social media platforms can lead to fraudulent activities where people can create fictitious accounts and hide behind pseudonymous identities. As a result, social media platforms have become an ideal breeding ground for online fraud and identity theft, which is becoming a deliberate concern for businesses incorporating social media channels in their marketing campaigns. Other online crimes include social media-induced violence, cyberbullying, and money laundering, all of which can be notably reduced by utilising thorough identity verification solutions.

Social Media – A Perfect Getaway for Criminals

As social media has become a central part of our online lives, criminal activities have found a new favourite home. Social media has given ground for criminal ventures to prosper in a quasi-stealth mode online. Such platforms have also given favourable chances for regulatory authorities to identify in-process crimes and raise the bar for performing future criminal activities. Thus, like many other alterations in communication technology, social media has both benefits of ease of use and costs when it comes to its connection with criminal equity and regulations.

Social media fraud continues to create trouble for both users and businesses, although institutions have managed to figure out the significance of social channels as an unmatched sales tool. Over the years, an increase in social media crimes has been observed, with victims losing more than just money. 

Moreover, with digitisation, online frauds are becoming more standardised and involve organised crime groups. In 2022, tricksters are attaining new heights in fraud attack automation. Now, scams are less concentrated on average everyday users and are more so focused on exploiting particular groups to expand conversion rates. This increases the concerns for regulating social media platforms by multiple authorities using identity verification solutions to prohibit crimes.

Practices to Combat Frauds on Social Media Sites

Social media identity theft is becoming more frequent as social networks further coalesce with everyday life. Petty mistakes can endanger your private information, allowing fraudsters to steal your personal information and use your Social Security number or other private data, potentially harming your credit. Several fundamental practices can alleviate this risk and shield your profile, such as personalising your privacy settings, hiding your locality, and utilising a password manager with auto-generated difficult passwords. Protecting your identity on social media is a simple but crucial process to make sure your financial health and personal security are adequately protected.

Identity Verification

The lack of identity verification measures is one of the prime reasons social media platforms expose users and businesses to fraud with an army of fake accounts and profiles. Identity verification can prevent such scams in social media, averting monetary losses and reputational damages. Developments in technology have introduced innovative ways for digital companies to utilise a handful of AI programs to address emergent social media threats. 

NFC Verification

The severity and frequency of identity thefts have shown that a considerable number of people are not conscious of the significance of protecting their personal information on social media. Questions around data privacy and having to take extra time are two of the main reason why people run away from IDV solutions. NFC (Near Field Communication) takes less than a second to determine whether a user on a social media platform is authentic or not. All they have to do is to upload an image of their NFC-enabled file and tap the chip on the device to get authenticated.  

Secure Connections 

Since the main purpose of identity theft is financial exploitation, it is essential to secure payment methods and bank account information. Businesses can minimise data loss on social media sites by securing their connections. This particularly involves restricting entry points and access to specific business areas and creating data backups.

Global Regulations to Protect Social Media Platforms

Businesses, government institutions, and politicians operating through social media platforms face serious consequences from soaring fictitious accounts. Governments across the globe are taking steps to introduce laws for the implementation of identity verification measures on social platforms

European Union

The EU instigated General Data Protection Regulation (GDPR) to organise a set of rules on how companies, businesses, and other users operating through social media platforms can secure their data. Social media sites face hefty fines if they do not remove extremist content within 24 hours. The European Union has also taken strict actions on copyright protection. Social media platforms are held responsible for not hosting copyright-violating content on their sites. 


Russian regulatory authorities are increasing pressure on companies and businesses operating on social media platforms to inspect online content considered illegal by the government. Those who failed to comply with Russia’s internet legislation have faced penalties and potential blocking. 


Chinese regulatory authorities have also greatly limited ingress to virtual private networks that some users’ have employed to gain access to the blocked sites. The Cyberspace Administration of China also claimed to have cleared up to 9,328 illegal gambling mobile apps. Furthermore, China has hundreds of cyber police members, who strictly monitor politically sensitive activities on social media platforms. 

Significance of Identity Verification for Social Media Safety

Identity verification of users and immediate deletion of illicit content are just some of the regulatory obligations directed at social sites in the UK and within the EU. The suggested law has received heavy criticism for lacking a balance between exempting authentic online scams and defending free speech. Simultaneously, Twitter’s new owner intends to simplify its users’ freedom to convey their thoughts by introducing user authentication.

Most digital organisations and service providers must know who they are doing business with. Those following AML regulations (Anti-Money Laundering) are required to meet KYC (Know Your Customer) requirements to make sure that users’ are trusted individuals—i.e., not bad actors or those under sanctions.

These legislations and regulations have been administered to avert money laundering and other financial crimes. AML-regulated companies that fail to manage KYC obligations may face sanctions, such as heavy fines and face reputational damaging consequences in the market and industry. The laws and regulations are intended to place high command on companies. Still, they are obligatory to keep the company protected, its customers, and thus in a sense society as a whole. These legitimate concerns constantly evolve and vary depending on the authority, industry, and country.

Key Takeaways

Developing a business through social media platforms necessitates steadiness and lawful traffic, which cannot be accomplished unless the platforms are protected. When fraudulent operations step in and try to take control of confidential information to create fake accounts, both the business and its customers lose hard-earned capital profits.

Shufti Pro is a UK-headquartered IDV service provider on a mission to create solutions that eliminate online fraud and identity theft. Presenting ultra-modern Know Your Customer services to enterprises and SMEs, Shufti Pro takes several facets of social media cybercrime trends into account. Shufti Pro’s Identity Verification solution assists businesses to regulate their social media operations smoothly while ensuring customer satisfaction. The risks of online scams can be remarkably reduced by verifying users’ true identities once they register on social media sites.

To get answers to your questions regarding KYC and AML screening, contact us today.

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