Electronic Identity Verification (eIDV) in the wake of 5AMLD
The regulatory environment continues to change as the threats are becoming increasingly sophisticated. To that end, the EU has legislated the Fifth Anti-Money Laundering Directive (AML5 / 5AMLD). The Official Journal of the European Union announced the new legislation on June 19th, 2018.
Along with intensifying coverage to cryptocurrencies and digital transactions, 5AMLD represents a considerable prospect for organisations to adapt and adjust the process of eIDV for meeting their compliance obligations.
What is new?
5AMLD is not a new Act; rather, it is an extension to the existing 4th AML Directive that concentrated on regulating the use of the financial system for illegal money laundering objectives. The key difference of 5AMLD in contrast to the preceding directives is the obligation for exchange/cryptocurrency organisations to improve their procedures for eIDV within CDD and customer onboarding processes.
How it impacts eIDV?
5AMLD is straightforward on details as to the conditions of the electronic identification-and-verification process, rather than stating that it has to be “secure” and endorsed by a government authority. Many businesses have been using digital means to verify the identity for quite some time. Still, it is the first EU money-laundering directive to exclusively feature the usage of “electronic verification” for identities, offering transparency for all stakeholders. Every Time there will be a change in risk status or circumstances of the customer, their identity needs to be re-verified. In addition, full identity and AML checks now have to be carried out for customers who were formerly exempt of verification as per the extent of the law. Instead of strengthening restrictions, these stipulations are, thus, primarily aimed at making life easier for clients as well as businesses, in the Digital Age.
How can Data Zoo help you?
Data Zoo’s eIDV platform enables the businesses to ensure compliance with AML screening and maintain surveillance by improving the security posture and treating the money laundering and financing of terrorism risks. Moreover, using our eIDV platform businesses will simplify the customers’ registration process, through enabling the digital onboarding in a matter of seconds, preventing users from cutting the registration process.