Decentralized finance (DeFi) is gathering significant publicity, investment and crypto development as a new model for numerous financial processes. As DeFi models, technologies and players are so unique, there’s been little involvement by regulators to date. However, regulators will not ignore the dangers of these unregulated financial markets for long; the DeFi industry needs to understand compliance obligations to build a path to wider user acceptance.

What is DeFi?

Traditionally, financial services relied on middlemen to broker transactions between different parties. These third parties would collect hefty fees for their ability to connect and mediate different sides of a financial need.

Consider a…

The increasing use of digital channels is expanding around the world. But unfortunately, many users aren’t technologically savvy with the safe use of mobile or online services. Bad actors are all too quick to take advantage of these gaps in security. To help protect these vulnerable customers and their own reputations, organizations need to understand these rising fraud threats.

Just as important, businesses need to understand how consumers perceive online threats and provide assurance that they are safe to do business with.

Consumers wary of doing business with an online service due to security or privacy concerns impact potential revenue…

What exactly is Customer Due Diligence (CDD)? And why is it so important? CDD is a critical element of effectively managing risk and protecting you (and your business) against potential association or involvement with bad actors and financial crimes. CDD processes are crucial for Know Your Customer (KYC), and while they vary around the world, in most cases, they involve identifying your customer and understanding their activities. This then allows you to assess their risk profile.

Sometimes, Enhanced Due Diligence (EDD) is needed. This involves collecting additional information on high-risk customers to provide a deeper understanding of customer activity and…

Verifying consumers who have established identity profiles is relatively straightforward; the identity data exists and procedures are clear. But how can Generation Z consumers — the largest population segment on the planet — be appropriately verified, given most of them have thin credit files due to little or no credit history?

While the exact division between generations is debatable, Pew Research recently defined Gen Z as anyone born after 1997. There is an estimated 2.47 billion people who fall within this generation.

These young people are entering their prime consumption years. They’re starting to enter the workforce, choose brand and…

New consumer privacy laws and innovative fraudsters have given security professionals much to do in a supercharged digital economy. As our digital footprints widen, bad actors are finding increasingly sophisticated ways to access troves of personal information and sensitive data.

Globally, lawmakers are introducing privacy laws with the intention of empowering consumers to know which companies have collected their data and for what purposes. However, regulations meant to protect consumers can be exploited by bad actors to commit identity theft and other types of fraud.

The compliance challenge

An example of privacy legislation in the United States is the California Consumer Privacy Act…

In an online world filled with fakes and frauds, how can you tell what’s real? If you’re a business needing to distinguish a legitimate person from a fraudster, identity authentication helps determine if they are who they say they are. Using multi-factor authentication (MFA) — multiple layers of identity authentication information — reduces fraud risk, builds trust, and helps businesses more safely conduct business with customers.

One widely used MFA solution is using a mobile number for verification. That’s because mobile numbers are:

• Widely available — currently, 62% of the world’s population has a mobile phone
• Easily accessible — people…

In 2020, just 10% of the global population’s personal data was protected by some form of data protection law or regulation. Gartner predicts that by 2023, that figure will be closer to 65%.

With that huge increase in data protection law coverage comes an associated increase in rights for individuals over the information concerning them that companies hold. This in turn requires that companies be able to demonstrate that that information is in good hands.

The European General Data Protection Regulation (GDPR) is arguably the best-known example, granting data subject rights (DSRs) to individuals resident in the European Economic Area…

Cryptocurrencies and stablecoins are finally emerging as a mainstream market, pushed along faster now by the global impacts of COVID-19. For all the damage it’s done in many industries, one upside of the pandemic is that it has advanced and expanded the use of online banking and digital payments services, alongside increased adoption of cryptocurrencies.

That’s the good news. But the bad news is that cybercriminals love digital money. It ticks two main things on their checklists: global online access and lingering confusion as the sector becomes more organized. In such a climate, shrewd online criminals are reaping the benefits.

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