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Financial crime and the digital ID revolution

James Mirfin
James Mirfin
Global Head of Digital Identity and Financial Crime Propositions

The increasing sophistication of financial criminals means organisations must embrace technology and industry-wide collaboration like never before. In the latest part of our series, we explore how the digital ID revolution can #FightFinancialCrime and enhance the KYC due diligence experience.


  1. Financial criminals are increasingly sophisticated in the digital age, meaning financial institutions must adopt a fresh approach to fighting corruption.
  2. The use of digital ID to fight financial crime is gathering momentum, driven by inter-connected factors such as greater connectivity between entities.
  3. Refinitiv offers fast, reliable digital ID verification and screening through seamless API technology to help #FightFinancialCrime.

In our 2018 True Cost of Financial Crime survey, it was revealed that 47 percent of organizations had fallen victim to financial crime. Within this, 55 percent of publicly listed companies and 45 percent of private companies experienced some form of financial crime in their global operations in the year preceding the survey.

But the financial cost of these crimes aside, it’s important to take into account the wider societal and humanitarian impact of such widespread corruption.

Patricia Moreira, Managing Director of Transparency International, reminds us that “corruption is a global phenomenon, and its effects go beyond what people usually imagine. This is because corruption has a very lasting impact on almost all dimensions of people’s daily lives”.

In Transparency International’s annual Corruption Perceptions Index, the majority of countries appeared to have made little-to-no progress in ending corruption in 2017, with two-thirds of countries scoring less than 50 on a scale of 100.

Given the pervasive nature and devastating consequences of financial crime, and the fact that criminals are becoming ever more sophisticated, the financial services industry needs to fight back with renewed efficacy.

Patrician Moreira Quote. Financial crime and the digital ID revolution

Keeping digital transactions secure

Criminals are increasingly targeting financial institutions as the place where they generate illicit funds, for example through account takeovers or cyber crime.

One area worth discussing in more detail is the payments industry.

Refinitiv, in partnership with the Emerging Payments Association and Barclays, has produced a report suggesting a number of best practice solutions for combating corruption, specifically in the payments sector.

These solutions include rigorous Know Your Customer (KYC) screening and ongoing monitoring of all third-parties, which must be underpinned by credible, reputable data.

There is also the deployment of cutting-edge technology, including machine learning and behavioral analytics that can be leveraged to help identify unusual behavior or other anomalies.

The paper goes on to suggest that a common digital identity solution is the next step in keeping digital transactions secure and safe from fraudsters, stating that a “digital identity in the UK is a core enabler for ongoing take-up of digital services, facilitating both convenience and security for users”.

Digital ID to fight financial crime

The digital ID revolution is gaining momentum, driven by several interconnected factors, including:

  • Regulations that mandate enhanced consumer privacy and protection.
  • Consumers who demand choice, flexibility, and an omni-channel experience.
  • Technological advances that enable new entrants in the banking sector with low barriers to entry.
  • The increasing use of digital channels across the globe.
  • Greater connectivity between entities.

Perhaps the strongest driver of all, however, is the growing need to protect against sophisticated financial criminals.

In response to this digital revolution, Refinitiv is investing in and developing new digital solutions that offer fast, reliable identity verification and screening through API technology.

Refinitiv research financial crime survey. Financial crime and the digital ID revolution

KYC and the client experience

Manual, often paper-based KYC customer due diligence processes can be time-consuming, inefficient and costly, but more than this, they often lead to rising customer frustration levels.

Complex data handling and privacy regulations must be weighed against conducting adequate due diligence.

Striking the right balance can be highly challenging. There is also the critical issue of ensuring the security of confidential customer data, while simultaneously keeping their frustration levels at bay.

For example, passwords and knowledge-based authentication can be highly trying for tech-savvy consumers who expect speed and frictionless service.

Power of collaboration

The digital ID revolution has the power to solve many immediate challenges in the KYC space, but ultimately the key to winning the war on financial crime will involve widespread collaboration and a commitment to working together to share insights and best practice solutions that can outwit sophisticated financial criminals.

Moreira supports this view, commenting that “corruption is, by its nature, a complex phenomenon that involves a number of different actors and factors.

“To be able to effectively fight corruption, we need the engagement of different actors coming from the public sector, the private sector and from civil society.”

Tackling AML compliance with technology. 2 April 3pm-4pm. Financial crime and the digital ID revolution

Tackling AML compliance with technology. 2 April 6pm-7pm. Financial crime and the digital ID revolution