Why ETSI Standards Matter to You in Identity Proofing and Verification

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What are ETSI Standards?

ETSI standards ensure robust authentication, secure data storage, and adherence to encryption protocols. Certified providers are assessed on business maturity, demonstrating dedicated security teams and processes for change and risk management.

 

In the past decade, we’ve shifted from in-person verification to 100% remote identity proofing, where users verify documents and biometric data via smart devices. Europe is at the forefront of this transformation.

 

The European Telecommunications Standards Institute (ETSI) creates globally applicable standards for ICT-enabled systems, applications, and services. In 2021, ETSI released key standards for identity verification:

– ETSI TS 119 461: Standards for the management and operation of identity proofing services.

– ETSI EN 319 401: Standards for electronic signatures and infrastructures supporting the eIDAS regulation.

 

Conforming to ETSI standards requires extensive audits covering product performance, security, interoperability, and provider maturity. The standards specify best practices for attribute collection, validation, and binding, and address risks such as falsified evidence and identity theft.

 

Benefits of ETSI Standards in Identity Proofing

  • Align with EU Regulations

Adhering to ETSI standards ensures compliance with EU regulations, which is essential for businesses operating within the European Union. This alignment helps companies avoid legal pitfalls and build a solid regulatory foundation.

  • Build Trust with Partner Companies

ETSI certification signals to partner companies that your organization is committed to maintaining high security and compliance standards. This trust can lead to more business opportunities and stronger partnerships.

  • Enhance Customer Experience with Faster, Error-Free Approvals

ETSI standards streamline the identity-proofing process, reducing the time required for customer onboarding and minimizing errors. This leads to a better customer experience and higher satisfaction rates.

  • Enable Interoperability and Cross-Border Transactions

 

ETSI standards facilitate interoperability between different systems and services, making it easier to conduct cross-border transactions. This is particularly important for businesses operating in multiple countries or dealing with international clients.

 

How KYC3 Handles Identity Proofing and Verification

KYC3 employs a digital counterparty identity portal that allows counterparties to upload documents via a secure portal. This process includes an automated “ToDo” list, speeding up onboarding and ensuring completeness. The benefits of using KYC3’s system include enhanced efficiency, improved security, and increased business opportunities.

Features of Your Company’s White-Labeled Onboarding Portal

 

– Seamless Integration with Your Company Website: The portal matches the look and feel of your company’s website, providing a seamless user experience for your counterparties.

– Consent Recording: Captures your counterparty’s consent to terms and conditions effortlessly.

– Disclosure Management with Audit Logs: Ensures counterparties download required disclosure documents with proof via audit logs.

– Video Identification: Records live video of your counterparty to verify their identity.

– ID Document Capture with Automated Assessments: Takes live images of identity documents, assesses quality, extracts data, and verifies document checksums.

– Intelligent Document Processing: Utilizes computer vision and AI to read documents and convert them into structured data for easy use in other systems.

– Configurable Forms: Collects all required information as structured form data or uploaded documents.

– Face and Voice Recognition: Matches identity documents with live video and verifies the authenticity and liveness of the video.

– Phone Number Verification and Risk Assessment: Provides real-time risk intelligence on the counterparty’s mobile phone number.

– Geolocation and IP Risk Assessment: Offers detailed information about the counterparty’s location and internet connection type.

– Dynamic Onboarding for KYB: Simplifies the collection of complex document packages with an easy-to-use onboarding wizard.

– SMS and Email Messaging Capabilities: Quickly invites and notifies counterparties of required actions.

ETSI standards play a crucial role in identity proofing and verification, providing a robust framework that enhances security, compliance, and user experience. By integrating these standards, KYC3 ensures that your business remains compliant, builds trust with partners, and delivers a seamless onboarding process.

Take the first step towards transforming your company’s compliance landscape and unlocking unprecedented growth. Contact KYC3 today to explore how our innovative solution can benefit your organisation. Act now—your company’s future success awaits.

Please tell us more about yourself and book a call! 

How eIDAS Simplified Cross-Border Transactions in Europe?

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  • The eIDAS Regulation provides a unified framework for electronic identification (eID) and trust services across the European Union, enhancing interoperability among the 28 EU countries. This regulation ensures that electronic identifications and trust services are mutually recognized across borders, streamlining the delivery of business services throughout the EU.

How Companies Benefit from eIDAS Compliance

  •  

  • Reduced Administrative Burden: Simplifies electronic transactions with companies, customers, and public administrations.

  • Efficiency Boost: Streamlines business processes, reducing costs and increasing profits.
    Enhanced Security: Ensures safer electronic transactions, boosting consumer trust and expanding the potential customer base.

  •  

Trust Services under eIDAS Include:

  •  

  • Electronic Signature (eSignature): An electronic expression of a person’s agreement to a document’s content, with qualified eSignatures holding the same legal status as handwritten signatures.

  • Electronic Seal (eSeal): The digital equivalent of a stamp, guaranteeing the origin and integrity of a document.

  • Electronic Timestamp (eTimestamp): Certifies that a document existed at a specific point in time.

Advantages for European Businesses Using eID:

 

  • Access New Markets: Facilitates cross-border identification/authentication of potential customers or clients within the EU.

  • Time and Cost Savings: Enables rapid and trusted customer identification.

  • Enhanced Security: Ensures stricter identification for high-value or restricted goods.

  • Increased Convenience: Allows customers to reuse their national ID, improving user experience.

  •  

  • The financial services sector stands to gain significantly from eID and trust services, opening up new business opportunities for cross-border financial services.

Key Requirements of eIDAS:

  •  

  • Qualified Electronic Signatures and Seals

  • Electronic Authentication

  • Trust Services

  •  

  • A Qualified Electronic Signature (QES) or Qualified Electronic Seal (QESeal) must comply with the eIDAS Regulation to ensure legal validity and security within the EU.

  •  

  • EUDI Wallet and eIDAS 2.0:

  • The EUDI Wallet aims to provide users with a secure means of sharing verified identity and data attributes with public and private services. The updated eIDAS 2.0 targets 80% digital identity usage among EU residents by 2030, supporting the development of a comprehensive digital identity ecosystem.

  •  

Compliance with eIDAS

 

  • The eIDAS regulation applies to all EU member states and the European Economic Area (EEA), including Norway, Iceland, and Liechtenstein. 

  • Organisations in these regions must comply with eIDAS for:

  • Legal Adherence

  • Security and Reliability

  • Competitive Advantages

  • Building Customer Trust


KYC3's Services for eIDAS Compliance:

  • KYC3 offers tailored services to support fintech companies in achieving eIDAS compliance, including:

  • Automated KYC Verification: Streamlines the customer onboarding process with advanced AI and machine learning technologies.

  • Real-Time Data Analysis: Ensures accurate and up-to-date customer information, enhancing the reliability of electronic identification processes.

  • Continuous Monitoring: Provides ongoing surveillance of customer activities to detect and address potential risks promptly.

  • Comprehensive Compliance Solutions: Helps businesses navigate the regulatory landscape and meet eIDAS requirements efficiently.

  • For more details on the eIDAS Regulation and its benefits, read the full guidebook . The European Commission’s press release also highlights the final agreement on the EU Digital Identity Wallet.

  • For support with eIDAS compliance, contact KYC3 and leverage our expertise to ensure your business stays ahead in the evolving regulatory landscape. Book a call with us

3 Signs Your Company Needs to Improve Its Compliance Culture

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3 Signs Your Company Needs to Improve Its Compliance Culture

 

We read news every day about large financial companies having data storage breaches, money laundering cases, and surprisingly, we still see employees at the highest levels causing reputational damage to their companies. Why is this still happening, and is this a sign of a lack of compliance culture within these companies?

 

A robust compliance culture is essential for any organisation, particularly in industries like finance and web3 where the stakes are high. Here are three signs that your company may need to improve its compliance culture:

 

1. Neglecting Compliance Training for Employees

 

One of the foundational aspects of a strong compliance culture is comprehensive training for all employees. When a company neglects the importance of compliance training, it leads to several issues:

 

Lack of Awareness: Employees may not be fully aware of the compliance policies and procedures they need to follow.

 

Miscommunication: Poor communication within the company about compliance can result in misunderstandings and non-compliance.

 

Reputational Damage: Without proper training, employees at all levels may inadvertently engage in activities that damage the company’s reputation.

 

Neglecting compliance training creates an environment where employees are ill-equipped to adhere to necessary regulations, making the company vulnerable to legal and financial penalties.

 

2. Limited Tools for Onboarding and Compliance Management

 

Effective compliance requires robust tools and systems. If your company relies on outdated or insufficient tools, it can lead to significant gaps in compliance management:

 

Tool Overload: Using several disparate tools can create gaps and errors, leading to non-compliance with the latest regulations.

 

Manual Processes: CFOs and compliance teams often juggle multiple tasks, including manual checks and risk monitoring, which are time-consuming and prone to error.

 

Pressure on Staff: Manual processes put undue pressure on the CFOs and the compliance team, which is counterproductive and fosters a culture of non-compliance rather than compliance.

 

Automating compliance processes helps normalise the compliance activities, allowing employees to rely on a system that supports and sustains a compliance culture within the company.

 

3. Poor Risk Management Practices

 

A company’s inability to effectively manage and monitor risks is a clear sign of a weak compliance culture:

 

Increased Vulnerability: Without robust risk management practices, the company becomes vulnerable to financial penalties and reputational damage.

 

Operational Inefficiencies: Manual risk monitoring is not only inefficient but also distracts key personnel from their primary responsibilities.

 

Negative Impact on Culture: When employees see that risk management is not a priority, it can lead to a broader culture of non-compliance.

 

Improving risk management practices through automation and proper training can significantly enhance the compliance culture within your organisation.

 

Benefits of a Robust Compliance Culture

 

Creating a robust compliance culture offers numerous benefits to your company:

 

  • Avoid Financial Penalties: By adhering to regulations, your company can avoid costly fines.

  • Reduce Operational Costs: Automated compliance processes streamline operations, reducing costs.

  • Maintain a Good Reputation: A strong compliance culture helps maintain your company’s reputation, attracting new customers and partnerships.

 

For more insights on how to create a compelling compliance process in your business, check out this short video and the information available.

 

Contact us for more information.

 

Watch video

How Unregulated Funds Are Becoming Regulated?

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Recent trends indicate a significant shift towards the regulation of unregulated funds, particularly regarding their anti-money laundering (AML) programs. 

With over $3 billion in fines levied globally in the last two months alone, the pressure on these funds to comply is immense. Effective compliance programs must include proper customer identification, due diligence, monitoring, and auditing. 

Unregulated funds in Luxembourg have been  governed by the RAIF Law of 23 July 2016, and  if they are qualified as alternative investment funds (AIFs) under the AIFM Law of 12 July 2013. 

Luxembourg funds may also opt for European labels that offer a marketing passport to the fund’s manager, provided they comply with regulatory requirements. 

These labels include the European long-term investment fund (ELTIF) under Regulation (EU) No. 2015/760, the European Venture Capital Fund (EuVECA) under Regulation (EU) No. 345/2013, and the European Social Entrepreneurship Fund (EuSEF) under Regulation (EU) No. 346/2013. 

Both regulated and unregulated funds are additionally governed by the Companies Law of 10 August 1915, unless superseded by the product laws such as the RAIF Law.

In Luxembourg, unregulated funds report to the Administration des Domaines instead of the CSSF. 

The CSSF’s 2020 review revealed gaps in risk analysis and oversight, emphasising that fund managers must better assess money laundering and terrorist financing risks.

Key Compliance Measures

  1. Fundamentals

Implementing comprehensive customer identification, due diligence, monitoring, and auditing processes is crucial for ensuring compliance. KYC3 provides a fully digitised onboarding portal that simplifies these processes by automating document collection, identity verification, and risk screening. This not only reduces errors but also enhances security and efficiency, ensuring that all compliance requirements are met effectively.

  1. Outsourcing Oversight

Even when outsourcing AML compliance tasks, it’s essential to retain full responsibility. KYC3 offers solutions that allow companies to manage compliance in-house or via third-party services while maintaining control over the process. This includes detailed audit trails and secure data management to ensure that compliance standards are upheld regardless of how tasks are outsourced

  1. Risk-Based Approach

Continuously managing and monitoring investment risks requires a dynamic and proactive approach. KYC3’s AI-powered tools enable continuous risk assessment and monitoring by analysing vast amounts of data to detect potential risks. This approach allows for timely interventions and adjustments to manage emerging risks effectively, providing a robust risk management framework

  1. Sanctions Screening

Daily screening against international sanctions lists is mandatory to avoid regulatory breaches. KYC3 automates this process by integrating data from various official sources such as OFAC, Interpol, UN, and EU. This automation ensures that all counterparties are regularly screened, and any matches are promptly investigated, reducing the risk of dealing with sanctioned entities

Luxembourg-Specific Requirements

Unregulated funds in Luxembourg must annually complete a questionnaire for the Administration des Domaines, outlining their AML strategies. They must also appoint two roles: 

– **RR (Responsable du Respect des Obligations)**: Ensures compliance with AML obligations.

– **RC (Responsable du Contrôle du Respect des Obligations)**: Controls compliance activities.

Both positions must be reported, and any changes updated promptly.

Effective Compliance Tools

To manage these requirements efficiently, adopting advanced software tools can automate sanction screenings, manage documentation, and ensure all necessary investor information is accessible for audits and regulatory reviews. This approach can enhance compliance without significantly increasing staff.

For more details on compliance solutions, contact us

Top 3 Most Stressful Aspects of a Regulatory Site Visit

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Unexpected site visits from regulators can be extremely stressful. The ever-changing regulations and laws add to the workload and the need to stay prepared for surprise inspections while maintaining standards.

 

Since 2008, regulators have imposed more rules and laws, and with the introduction of new regulations like GDPR and DORA, we can expect even more changes ahead.

 

Each year, the costs of complying with new regulations increase by 10%, making it increasingly challenging to keep up using traditional, non-digitized methods.

 

In 2018, the Competitive Enterprise Institute released a comprehensive report on the rising compliance costs for large companies.

 

Here are the top three most stressful aspects of a regulatory site visit and how to address them:

 

1. Not Having Your Audit Reports Ready

   Keep your audit reports up-to-date and easily accessible. Regularly review and organise your reports to avoid last-minute rushes during a site visit.

 

2. Having to Print Loads of Documents

   Reduce the need for printing by maintaining comprehensive digital records. A robust document management system enables quick retrieval and sharing of documents with regulators.

 

3. Discovering Gaps in Your Audit Records

   Conduct regular internal audits to identify and fix any gaps in your records before a regulatory inspection. This proactive approach helps maintain compliance and reduces the stress of unexpected findings.

 

The New and Improved Way of Automating Reports with KYC3’s Solutions

 

Integrated System with Full Audit Trails

KYC3’s solutions keep all data in a single integrated system, complete with full audit trails and detailed statistics. Reports are available in real-time, ensuring you’re always prepared.

 

Generate Reports within Minutes

With KYC3, reports can be generated in minutes rather than hours, thanks to standardised formats and consistent data directly from the system. Data is accessible via API, allowing automatic integration with complex business intelligence and decision support systems.

 

Streamlined Compliance with a Digital Platform

Using an integrated digital compliance platform, 360-degree view reports are standardised and available at all times. This saves man-days of work annually and ensures consistent and unbiased reporting.

 

Efficient Auditor Review

Auditors can review configuration rules, results, and audit logs directly on the system, providing a transparent view of how the system was used. This allows for quick empirical observations and immediate addressing of deficiencies, with auditor sign-off for configuration changes achieved swiftly.

 

Comprehensive and Accessible Records

Analysts can produce detailed records, including documents, assessments, and audit notes for regulators in standard formats at the push of a button. This holistic, transparent, and simplified compliance process ensures that fines for deficiencies or errors are avoided.

 

By leveraging KYC3’s solutions, the compliance process becomes more efficient, reducing stress and ensuring your organisation is always ready for regulatory site visits.

Streamlining the Onboarding Process with KYC3

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Streamlining the Onboarding Process with KYC3: Efficiency and Accuracy

Onboarding counterparties can be one of the most time-consuming activities for companies. From gathering documents via email to dealing with incomplete dossiers and performing manual checks, the entire process demands significant time and attention. KYC3 has revolutionised this process by fully digitising it, providing companies with a portal where counterparties can upload documents and undergo all necessary checks, thereby reducing the risk of errors or missing information.

Benefits of Using an Automated Onboarding Portal

  1. Clear Communication of Document Requirements

– The portal ensures that document requirements are clearly communicated to counterparties, eliminating confusion and reducing delays.

  1. Automated “To-Do” List

   – The digital counterparty identity portal includes an automated “To-Do” list, making it easier for counterparties to upload all necessary documents. This feature speeds up the process and ensures that all required information is provided, reducing the risk of errors.

  1. Enhanced Efficiency and Security

   – With the streamlined process, counterparties experience improved efficiency and security, leading to greater satisfaction and increased business opportunities.

  1. Simplified Compliance Management

   – The compliance manager receives updates about the onboarding status and findings, without needing to manage the entire process manually.

Key Features of the KYC3 Onboarding Portal

Digital Dossier Management

– Centralised and organised document management for easy access and review.

Real-Time Video Onboarding

  – Allows for immediate and interactive onboarding sessions.

AI-Powered ID Analysis

  – Advanced technology for accurate identity verification.

Automated Risk Screening Engine

  – Efficiently identifies and mitigates potential risks.

Secure and Customizable

  – Options for on-premise or hosted solutions to meet specific security and customization needs.

Compliance with Regulations

  – Fully compliant with AMLD5, GDPR, BSA, and PSD2, ensuring adherence to international standards.

No more back-and-forth emails, calls, or unreliable tools for risk management. The KYC3 onboarding portal offers a streamlined, efficient, and secure solution that benefits both companies and their counterparties. By automating the onboarding process, companies can focus on growing their business and building stronger relationships with their partners.