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Payments body calls for digital IDs to tackle financial crime

Payments body calls for digital IDs to tackle financial crime

UK financial institutions and payment processors should collaborate on the creation of a national digital identity scheme to face down the threat posed by money laundering and payments-related financial crime, according to a new report published by the Emerging Payments Association (EPA).

The issue of money laundering in the UK has become ever more pressing in recent years. The country’s National Crime Agency observed in its recent national strategic assessment that the scale of money laundering through the UK could potentially be “in the hundreds of billions of pounds” annually.

The EPA report, 'Facing Up To Financial Crime', drafted with the support of a syndicate of EPA members led by Refinitiv and Barclays, explores the latest developments in the way fraudsters and money launderers abuse payment services and bank accounts to commit serious financial crimes, setting out 12 recommendations for industry members to take action.

These include guidance on the effective use of technology to tackle the threat, as well as advice on enhancing information sharing and suggestions for comprehensive and consistent reporting of criminal activity. The report also recommends championing digital identity as key to tackling these abuses, calling for payments and financial services companies to harness new technologies and to work collaboratively in order to create a "world-leading digital identity solution for the UK".

Finally, the report calls for sector-wide activity promote information sharing by government and law enforcement agencies with financial services companies through the use of a common platform and commercial model. It also recommends collaboration across trade associations to promote the adoption of best practice among PSPs for risk management to comply with financial crime legislation and enable continued access to banking facilities.

Tony Craddock, director general of the EPA, comments: “Financial crime concerns every company in the payments industry. Because it affects everyone involved in moving money, whether consumers, businesses or governments. In this report, we have identified what’s really going on, by whom and at what cost. We have developed recommendations for action that are clear, timely and impactful and we call upon interested parties to collaborate with us.”

Comments: (1)

A Finextra member
A Finextra member 14 February, 2019, 10:47Be the first to give this comment the thumbs up 0 likes

GDPR makes this kind of "information sharing" difficult. But having the ability to cross reference between multiple bodies with pertinent data has massive advantages in the AML space and many others.