Cyprus Mail
Business Cyprus Business News

CySEC launches consultation on using regtech for identity verification

Cysec Nice Logo
CySEC seeks to add regtech to strengthen due diligence.

The Cyprus Securities and Exchange Commission (CySEC) has on Thursday launched a consultation on the use of regtech in “AML/KYC” – obligatory identity verification in the framework of anti-money-laundering regulations.

The consultation is to consider a proposed amendment to CySEC regulations which is intended t0 improve the application of regulatory technology to customer due diligence (CDD) by firms under CySEC’s supervision. The full consultation paper is here CP-02-2020 (“IMPROVING THE FACILITATION OF CUSTOMER DUE DILIGENCE WITH INNOVATIVE TECHNOLOGIES”).

The purpose is to allow the use of regtech for verifying identities as determined by AML Law, “in a prudent and a risk proportionate manner,” as the consultation paper puts it.

The term RegTech was first coined by the UK’s Financial Conduct Authority(FCA) in 2015 who called it: “A subset of fintech that focuses on technologies that may facilitate the delivery of regulatory requirements more efficiently and effectively than existing capabilities.”

As businesses work hard to comply with expanding regulatory compliance, regtech has increasingly been applied to both manage part of that responsibility and to reduce the cost of compliance. This is why the global market for regtech is expected to reach $76.3 billion in 2022, according to a report from Juniper Research.

CySEC notes how changing business operations call for “innovative technology.”

“In an increasingly digitised operating environment, firms have shifted from traditional face-to-face interactions to engaging with their customers via online channels; a trend only exacerbated by the implications of the Covid-19 pandemic,” the press release points out.

“Whilst the structural shift in how regulated firms engage with their customers has positive benefits, such business relations pose material risks of exposure to money laundering and terrorist financing (‘ML/TF’).”

CySEC indicates, among others, the dynamic real-time contactless selfie, Big Data and certificates from public or private regulated bodies produced by means of Distributed Ledger Technology (where available) or other tamper-proof and time-stamped methods. These technologies have been subject to further exploration by CySEC via its Innovation Hub.

Interested parties in responding to CP-02-2020 must do so no later than 20 November 2020 to the CySEC Policy Department by email at [email protected].





Related posts

Heathrow Airport loses its number one position in Europe to Roissy-Charles-de-Gaulle

Andrew Rosenbaum

US sees record growth in Q3 with capital goods leading

Reuters News Service

Mercedes develops self-drive car to rival Tesla

Reuters News Service

Microsoft sees revenue up 12% to $37.2 billion in quarter; cloud jumps 47%

Reuters News Service

Global tourism has lost $460bn this year — UNWTO

Andrew Rosenbaum

Cyprus sees growing uncertainty about the economy

Andrew Rosenbaum