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Digital Identification in a Post-COVID World

– Regulation Asia

In this opinion piece, the editorial team of Regulation Asia reiterate the risks of using increased Know Your Customer (KYC) digital identity solutions during the COVID-19 pandemic

The editors highlight the many legal, regulatory and reputational risks that come for financial institutions, customers and governments through increased used of KYC and customer due diligence (CDD).

"The surge in criminal activity underlines the huge burden COVID-19 is having on both the economy at large and on corporate operations. For financial institutions across most jurisdictions, existing KYC and AML policies typically require face-to-face identity verification for customer onboarding. However, under remote work arrangements and social distancing directives, this has proven problematic for financial services."

Digital-only KYC may have increased the risk of criminal activity, but the editors highlight how the shift has increased security measures and opportunities for more flexible digital identification options in the future. They note:

Financial institutions should not operate in a bubble; they should seek assurance testing and certification by the government or an appropriate expert body, or otherwise seek expert opinion

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