Fintech Spawns Regtech to Automate Compliance With Regulations
What is FINTECH
Regtech is “the use of new technologies to solve regulatory and compliance requirements more effectively and efficiently,” as the Institute for International Finance (IIF), a research-oriented trade association in Washington, put it in a March report.
Mitek, a San Diego company that pioneered mobile photo capture of checks for bank deposits, and claims more than 5,000 banks as customers, has ventured into KYC compliance with features that allow consumers to photograph their driver licenses and other documents with their mobile phones when opening accounts.
“It became apparent that we could expand our product line to supply a growing market need for identity verification,” Sarah Clark, general manager of identity at Mitek, told Bloomberg BNA. “It helps banks and other financial services companies meet the customer identification program — aka, know your customer — requirements when it comes to onboarding customers,” she said.
Traditionally, a customer seeking to open a bank account would visit a branch in person and display a driver license or other form of identification. Now, Clark said, customers can take care of that step remotely, via smartphone. The bank can buttress the process by asking the customer to take a selfie, which Mitek’s Mobile Verify product compares with the photo on the license.
Mobile Verify has been adopted by major financial services companies for KYC, and they have not reported any problems with regulators. Mitek’s photo technology also can be used to capture other documents needed for financial transactions, such as applying for a loan, Clark said.
Regtech applications can bring in information from social media or other outside sources to buoy the anti-money laundering programs of financial institutions by fleshing out the profile of a customer whose activity has aroused interest, Larsen said