Enhance the Customer Journey through Digital Transformation

The first step to developing a digital-first customer journey is to determine what your customer journey is. Your airline must research its customer base thoroughly to develop accurate user personas. From there, you can create accurate depictions of how these different users approach your company and interact with it. This will allow you to gain knowledge about how your customers book flights with your airline or interact with post-flight surveys.

The goal is to discover key pain points for your customers. You can address several pain points at once by refining and updating your customer onboarding and profile creation process.

Customer Identity Verification for Passwordless Registration

We have come to understand that passwords are not a failsafe solution for keeping online accounts safe. For this reason, companies must develop different ways for users to access their online accounts. A lot can improve during the digital onboarding process, such as verifying identities with ease.

One way to do this is by using customer identity verification solutions during onboarding. With IDMscan, a customer identity verification solution, a consumer’s identity can be verified using a government-issued ID and then a biometric selfie comparison with the photo on the ID. After this process has been completed, a customer can log in to their account using a biometric selfie which is compared to stored selfie information gathered during the onboarding process. Biometric log-in would be much more secure than password methods.

This method of account sign-in is not only more secure but also more user-friendly as well. Passwordless login eases frustration among customers since they no longer must log-in using a password they’re likely to forget. Plus, as many as 70% of consumers state they support the expanded use of biometrics for security reasons online.

Gather Accurate Information, Especially on Mobile

Gathering information about your customer is critical for the success and longevity of your company. Data gives you a better understanding of your customer and allows you to create customized offerings for them depending on their preferences. Therefore, it’s so important that you gather information accurately and easily.

With tools like IDMautofill, you can extract personal information from a customer’s government issued ID during the onboarding process. This information will be transferred to onboarding form fields for customer ease and convenience. Filling out mobile forms can be especially cumbersome and difficult, so this technology is particularly useful in a mobile environment. IDMautofill can directly affect a customer’s attitude toward your company and service based on how easy it is for them to onboard in a mobile environment.

It is also important to ensure you gather customer information with their knowledge and consent. With the strict rules associated with GDPR, your airline must communicate what information you are gathering of your customer and why it is being gathered. You must also ensure you give your customers the opportunity to edit their imputed data and even opt out of sharing it if they wish. It is up to your company to demonstrate to your customers why it is in their benefit to share their personal information with your brand.

IDMERIT’s identity verification solutions offer robust ways to gather customer data that follow GDPR guidelines.

Securing the Airline Industry

As the world shifts and changes at a rapid rate, airlines must do everything they can to develop security processes that protect consumers. Nevertheless, they must balance their need for security with meeting customer expectations and needs. With the tools showcased above, airlines can not only make their industry more secure, but it can also increase satisfaction among consumers. Customer identity verification offers a way to change the way the airline industry operates online by quickly verifying identities in a secure way and simplifying the process for customers.

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How Trust is Threatened

Trust is threatened in different ways depending on the industry. With the banking industry, for instance, there are concerns that criminals are using stolen information to create synthetic identities in order to bypass banking security measures. In contrast, with the sharing economy, there are concerns that drivers on ride-sharing apps are who they say they are when they come to pick you up. For both industries, businesses must work diligently to ensure that their customers are who they say they are without having to directly interact with them.

Businesses must adequately vet new customers during onboarding in order to determine who they claim to be matches who they really are. This is especially important due to the rise of synthetic identity theft in online environments. Establishing a customer’s digital identity will help businesses protect their ecosystems, both online and offline.

Traditional identity verification methods such as two-factor authentication (2FA) and knowledge-based authentication (KBA)  have been proven to be inadequate at addressing these concerns. They are problematic because KBA relies on knowledge that can easily be acquired through the internet. Social media has made it increasingly easy for criminals and nefarious characters to find the answers to KBA questions online. 2FA can easily be bypassed by criminals through phishing attacks or mobile network data interception. This makes both KBA and 2FA unreliable security protocols.

Besides the security concerns for these authentication methods, businesses also risk creating friction-filled experiences for customers if, for example, they do not have a smartphone available in order to complete a 2FA process. This type of situation can frustrate customers and cause them to lose trust in your company before your relationship has even started.

The Trust Problem

In order for businesses to succeed, they must address the needs of their customers. Most customers—especially millennials—do not want to sit through a lengthy, cumbersome and friction-filled onboarding process. Nevertheless, businesses must create secure onboarding processes without compromising on safety and compliance.

How can businesses do this? It is possible to build an onboarding infrastructure of trust with automated, digital identity verification. Identity authentication software will help businesses mitigate fraud and risk while also reducing friction for their customers.

Why Digital Identity Verification is the Answer

Digital identity verification solutions, like those offered by IDMERIT, allow businesses to create simple and streamlined onboarding journeys for potential customers. They are flexible services that help optimize customer conversions while also protecting consumer data and deterring potential criminals.

Curious how identity authentication software can be beneficial for your business? Below are five ways that businesses can reduce fraud and mitigate risk by using identity authentication software in their onboarding procedures:

1. Request documentation: Your business can require that potential customers input a government-issued ID—such as a driver’s license or passport—for verification.
2. Artificial Intelligence: Leverage the power of artificial intelligence to determine if the inputted customer ID is real or fake.
3. Automation: Customer information is kept secure during verification by cross-checking it with information stored in official databases in the customer’s country of origin through an API.
4. Biometric Comparison: Liveness detection is used to determine if the person holding the inputted ID is physically present during the onboarding process.
5. Personal Information Extraction: During mobile onboarding, personal information can be extracted from identity documents and automatically inputted into appropriate form fields in order to reduce mobile form fill errors. 

Conclusion

Trust is an important part of any business relationship. Businesses must work diligently to establish trust with their customers without alienating them. Shifting from unreliable methods of authentication for more modern and secure ones is one way to do this. Digital identity verification offers a variety of benefits for businesses looking to build better relationships with their customers while also maintaining compliance with governmental regulations. To explore how IDMERIT’s identity verification solutions can be of benefit to your business, please contact us for more information.

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The Case for Risk-Based Friction

Many financial transactions are moving to digital channels, increasing the potential for fraud and cyberattacks. Regulators are guiding them to use new technologies to increase fraud protection yet at the sacrifice of increasing customer friction. How can a bank ensure that it prevents fraud in its systems while also meeting the demands of its customers? The answer is risk-based friction.

With risk-based friction approaches to fraud protection, friction is only increased for a new customer if risk is detected. Honestly, most people are who they say they are. This means that in a risk-based system, most users will be able to pass through the system with minimal friction. It is only questionable characters, fraudsters or other cybercriminals, who will experience the increase in friction in these customer-not-present scenarios.

This type of process will have the positive effect of causing improved customer satisfaction. It will do this by showing customers that yes, you take cybersecurity seriously and want to prevent fraud at your financial institution. It will also do this by showing your customers that you have put thought into your user experience. Most users want simple online experiences that are easy to follow and fast. Friction-based fraud protection is still easy for legitimate people to pass through; therefore, catering to most of your customer’s needs.

Risk-Based Bank Identity Verification

A risk-based approach to fraud prevention can be directly implemented during digital onboarding processes. Using bank identity verification solutions, financial institutions can begin creating digital onboarding processes that assist them in meeting regulatory compliance—Know Your Customer mandates—with minimal friction to new users. They will help banks mitigate risk and detect fraud in customer-not-present onboarding channels and become an integral part of a broad KYC banking strategy.

Digital identity verification services allow users to go through the onboarding process on their own time anywhere in the world. The process is also fast; many digital identity validation providers can approve users within seconds of uploading their information. Plus, features like mobile form fill can be integrated into the process as well, making onboarding even easier for new customers.

Digital identity validation solutions offer a way to detect risk during the onboarding process. For example, if a new user fails to verify that their ID is legitimate, then this is an indication of risk. From there, a financial institution can increase the friction in the onboarding process and require further information from the user to validate their identity. Legitimate users would not experience this friction because they would not be inputting inauthentic information into the identity verification platform.

Benefits of Risk-Based Identity Verification

Risk-based friction is an approach all banks and financial institutions should implement as they move toward digital banking. As cybercriminals become more adept online, risk-based identity verification offers a way to prevent illegitimate users from entering a financial institution online. Financial institutions must tread a fine line between creating robust cybersecurity processes and creating great digital customer experiences. Risk-based friction offers a way for financial institutions to increase the quality of their security processes while minimizing the effects of these processes on their legitimate users. Plus, risk-based identity verification is an important tool within a robust KYC and AML compliance strategy.

Build Your Risk-Based Identity Verification Strategy

To create a robust risk-based identity verification strategy in 2019, you must look for online identity verification providers that focus on these three pillars: user experience, fraud prevention, and compliance. Financial institutions are poised to face many cybersecurity burdens in 2019, especially as they increase the robustness of their digital banking channels. Risk-based identity verification helps combat these potential face offs and is an important tool in a broad cybersecurity strategy. Leveraging these solutions can become a part of a central strategy to build digital trust and long-term customer loyalty.

IDMERIT can help you meet your digital banking strategy goals. To learn more about our solutions and how they can benefit your financial institution, please contact us for more information.

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The identity verification industry is relatively young. It is a budding industry. Because of this, there are no industry standards to verify customer identities. This can create confusion for companies looking to harness these services to validate the individuals they interact with on a professional basis.

In this article, we will explain the most thorough way identity verification can be performed by a company. From there, we will examine why this type of process is most beneficial for companies looking to validate individual identities.

Defining Some Key Terms

Before we get into the process, it is important to explain the difference between identity verification and identification verification. Although the two terms sound extremely similar, they serve different purposes in the customer verification process.

Identity verification: Validating a person’s personally identifiable information (PII) against information within official databases. This starts with the full name, address, and date of birth of the onboarding customer but it can also include a phone number, national ID number and more.

Identification verification: Verifying that the person’s government-issued identification is authentic and is in the possession of the rightful owner.

Identity verification companies that use these two processes in conjunction provide more accurate identity results.

The ID Verification Process

Thorough Identity verification solution providers follow the following process:

1. A customer captures an image of their identity document (passport, driver’s license or national ID) with their smartphone or web camera and it is forwarded into the ID verification system
2. The identity document image is OCR scanned and checked for validity
3. The identity information captured from the front of the document is crosschecked with the information embedded within the ID’s barcode for validity
4. The information is then crosschecked for a match within official databases in the ID’s country of origin
5. The customer is prompted to take a biometric scan (selfie, fingerprint scan, iris scan, retinal scan, etc.)
6. The biometric scan will be matched to the known identified the customer
7. The customer is deemed as legitimate or fake

 Why this Process Matters

ID verification solution providers have a duty to check a person’s identity, verify that it is real and that they match their identification during the verification process. Identity verification and identification verification must occur in conjunction with one another. Unfortunately, not all Identity verification solution providers perform all these steps in their verification process. Because the industry is so new, there is no standardization in the identity verification process. This means many companies can provide services without providing the most thorough identification. This can have negative implications for the customers of these identity verification solution providers.

Many identity verification companies will verify that an identity document is legitimate, without crosschecking the information on the document with information from official databases in the identity document’s country of origin. Then, they will follow up with a biometric comparison of the user and the photo on the ID. This is doing a disservice to these company’s clients because it could be allowing them to do business with individuals who have manufactured fake ID’s with stolen or fake identity data. This is known as synthetic identity fraud. To date, the best way to stop synthetic identity fraud is to crosscheck PII information with PII information in official data sources.

Find an Identity Verification Solution Provider You Can Trust

IDMERIT believes it is imperative to follow rigorous standards when identifying individuals. Simply verifying a customer’s identity document is not enough. Steps must be taken to analyze the information on an identity document for validity as well. Both identity verification and identification verification must take place in a well-thought-out solution. Otherwise, synthetic fraud can pass through an identity verification system undetected and cause harm for clients in the long run.

IDMERIT adheres to the thorough identity verification process described in this blog. This means IDMERIT provides services that meet the most rigorous KYC and AML regulation standards. By doing this, the company can ensure that it has done its due diligence to fight fraud and mitigate risk. IDMERIT follows strict ID verification standards to provide the most valuable service to its customers.

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The Purpose of the Facial Biometric Identity Verification Legislation

The bill proposed to regulate facial recognition technology in the Senate is known as the Commercial Facial Recognition Privacy Act. It would force companies to obtain user consent before collecting facial recognition data. It would also prevent companies from distributing facial recognition information with third parties.

Senator Brian Schatz and Senator Roy Blunt explain that this legislation is intended to provide consumers with protection. Many consumers are becoming increasingly concerned with how their data is collected and used, and facial recognition data is no different. The Senators state that the legislation will ensure that facial biometric identity verification technology is implemented responsibly, protect consumers from acts of discrimination or bias, and preserve consumer privacy.

The Importance of the Regulation

Our faces are a part of what identify us as humans. They are personal and unique to each and every one of us. The legislation proposed by Senator Brian Schatz and Senator Roy Blunt aims to give people the information they need to accurately decide how they want to share their facial data with companies. It also gives them control over how their facial information is shared with companies that use facial biometric identity verification. The goal of the legislation is to prevent consumer focused facial recognition companies from mismanaging people’s facial data.

Who the Legislation Does Not Cover

The Commercial Facial Recognition Privacy Act is a consumer-focused piece of legislation. The legislation explicitly excludes the Federal Government, State and local governments, law enforcement, national security agencies and intelligence agencies from having to adhere to the proposed facial recognition rules. This means this particular legislation does not cover the use of facial recognition technology in police departments, as many of them begin to deploy it as a tool to track, identify and catch potential criminals.

How this Affects Identity Verification Companies

For companies who rely on facial recognition technology as a part of their identity verification solutions, the Commercial Facial Recognition Privacy Act will affect their products. Specifically, for IDMERIT, we will have to update our identity verification solution, IDMscan, to adhere to these new legislative rules.

Our app IDMscan adheres to the following process:

1. A user scans their identity document (national ID, driver’s license or passport) into the app
2. The app analyzes the ID to determine if it is legitimate or fake
3. The personal information on the identity document is extracted and compared with information within official data sources in the ID’s country of origin
4. A facial selfie is taken by the individual who imputed the ID
5. The selfie is biometrically analyzed in comparison with the photo on the identity document scanned at beginning of the process
6. A score is generated to confirm or deny the user’s identity
7. On the backend, the score report—which includes a copy of the scanned identity document photo and biometric selfie—is sent to the client using the app for their records

As demonstrated through the above process, our app IDMscan uses facial biometric identity verification technology for identity analysis. This allows IDMERIT to provide more secure identity verification confirmations than its competitors. The proposed legislation will force IDMERIT to update its application but will not affect its functionality in a major way.

In order to comply with the proposed rules in the legislation, IDMERIT will have to add a consent prompt before it asks a user to take a selfie. Furthermore, users will have to consent to distributing the biometric selfie they take with the company they are doing business with. The consent prompt will outline that a user’s facial information is being used for analysis, and only being stored for compliance purposes. After the user consents, they will then move forward with the rest of the biometric identity verification process.

Conclusion

The Commercial Facial Recognition Privacy Act aims to regulate how companies can use and distribute consumer facial biometric data. The authors of the bill showcase how they believe that facial recognition technology offers many benefits to society, should continue to be developed and should be used responsibly. Nevertheless, they limit the scope of this legislation to consumer facial recognition use cases, leaving out how governments, law enforcement or surveillance agencies can use the technology. IDMERIT and other identity verification providers will have to update their solutions in order to adhere to the rules in the proposed regulation. This will not affect their functionality and make it clearer for consumers to understand how their data is being used by these secure identity verification providers.

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For online gambling companies, this shift in policy should be no surprise. At IDMERIT, we believe that the online gambling industry will become more regulated in the digital age. These new developments in the UK support our assertion. In this article, we will discuss what new rules are going into effect and how identity verification will change for UK gambling customers.

Age Verification Becomes More Stringent

Currently, in the UK online gambling operations have 72 hours to perform age verification checks on their customers. This is not ideal because it has created an environment where underage players are able to gamble. According to the new rules proposed by the UKGC, age verification will now take place during the onboarding process. Companies will have to perform customer identity verification to verify user’s age before depositing funds into an account or being allowed to gamble in paid or free gaming environments. This is all in an effort to minimize children from gambling. It will create a better online environment for children as well as preventing a gateway to gambling-related harm.

Identity Verification is Standard

Gaming operators in the United Kingdom previously did not have to follow KYC best practices with their customers. It was common for many operators to perform KYC checks after a player had gambled. This is not in line with customer due diligence protocols and is being changed. The new UKGC rules outline that operators must implement KYC checks before a player has gambled. At a minimum, gambling companies must verify customer names, addresses and date of births during these checks. These checks are aimed at helping prevent harm on gaming platforms and stop crime.

Creating Better Gambling Practices

The changes being implemented by the UKGC will help gaming companies detect criminal activity and mitigate fraud on their platforms more effectively. This is because they will have more access to information about their customers through ID authentication and other verification methods. The changes by the UKGC also will stop the questionable practice of demanding identification during the cash out process, because players will have submitted that information earlier—presumably during onboarding. Currently, about 15% of the complaints the UKGC receives are about identity verification demands from gambling operators to customers during cash out. These new rules should eliminate this dubious practice. Plus, the new rules will increase the likelihood of a player being identified if they try to gamble while self-excluded. All these changes will create a better gambling environment for all players.

A Secure Identity Verification Process

The UKGC has not outlined exactly how gambling operators should perform age verification and customer identity verification checks. Nevertheless, they expect gambling companies to perform due diligence. Companies must carefully assess how they will meet these requirements, or risk facing severe fines from the commission.

IDMERIT can assist gambling operators in the UK in performing these KYC and AML checks. Our proprietary solutions offer the ability to perform near-instant, fully-automated customer identity verification checks in conjunction with age verification. Our solution IDMscan would perform ID authentication on a player’s identity document, check the authenticity of the personally identifiable information on the document and then confirm that they are who they say they are. During this process, age verification would take place right after identity verification. The date of birth on the identity document would be extracted and used in this process.

Conclusion

Gambling operators must comply with the new rules set forth by the UKGC. This will ensure compliant operations and create a safer online gaming environment. Performing customer due diligence will protect users and operators from fraud, underage gambling and dubious online casino scams. Employing identity verification solutions can assist in meeting the new UKGC regulation standards that will come into effect on May 7, 2019.

Please contact IDMERIT for more information about its proprietary identity verification solutions and how they can assist your gambling operation.

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Retina Scanning

The retina is a thin tissue of neural cells located in the back of the eye. It contains a complex arrangement of capillaries which supply the retina with blood. Every human has a unique pattern of retinal capillaries. The network is so unique that even identical twins do not share the same pattern of capillaries. Retina patterns typically stay the same throughout the course of a person’s life; although, they can be altered by certain diseases like diabetes, glaucoma or retinal degenerative disorders.

During retina scanning, the unique pattern of a person’s retina is mapped. With the appropriate lighting the blood vessels in the retina can be identified. A retina scan is performed by casting a beam of low-energy infrared light into a person’s eye as they look through a scanner’s eyepiece at close range. As the light travels through the retina, the amount of light reflected varies. Retinal blood vessels absorb more of the light from the light beam than the rest of the eye, causing the variances in the reflection. The pattern of variations is then converted into a code that is stored in a database. Retina scanning is one of the most accurate forms of biometric technology, with an inaccuracy level of 0.0001% FAR. This makes it a powerful fraud prevention solution for security teams.

Iris Scanning

 The iris is a thin, circular structure at the front of the human eye. It is responsible for dictating the size and diameter of the pupils, which determines how much light reaches the retina. The iris determines the color of the eye, and it varies from person to person. The larger the pupil gets, the more light can enter the retina.

During iris scanning, camera technology is used to acquire images of the iris with infrared light. Iris scanning obtains a detail-rich image mapping out the intricate structure of the iris. The image can then be converted into a mathematical and statistical pattern that can identify an individual. Databases contain these templates and are searched by matching engines at extremely fast speeds. False match rates with this technology is infinitesimally small. The NIST claims the technology is around 90-99% accurate. This makes it a scalable KYC solution for a variety of different security focused businesses.

The Similarities between the Two Fraud Prevention Solutions

The main similarity between iris scanning and retina scanning is that they both use the human eye for identification. Some other similarities between the two biometric methods include:

• Low false positives
• False negative rates are low
• Reliable biometric method since no person has the same iris or retina pattern
• Both methods authenticate individual identities quickly
• An amputated eye cannot be used to gain access because both the iris and retina decompose too quickly

The Differences between the Two Biometric Methods

While both iris scanning and retina scanning use the eyes to biometrically identifying an individual, they are distinctly different than one another. On the one hand, iris scanning uses camera technology to capture an image of the iris. This makes it usable in customer-not-present scenarios, which is becoming more and more common in the digital age. Iris scanning is considered a nonintrusive method of biometric identification since an image of the iris can be taken from a distance.

Retina scanning, on the other hand, requires scanning a beam of light deep inside the eye to capture an image of the retina. It requires specific equipment to be performed and is better suited for in-person identification procedures. Retina scanning is a method of biometric identification that is more invasive than iris scanning since the retina is located on the back of the eye. It is less accepted as a KYC solution than iris scanning for this reason.

Some other differences between the two fraud prevention solutions include:

• The retina can be altered by disease, while the iris remains mostly stable
• Retina scans are 70x more accurate than iris scans
• Iris scans capture an image of the iris from a distance, while retina scanning does it by placing the person’s eye near to an eyepiece
• Retina scanning is best suited for physical identification
• Iris scanning can take place in physical and digital scenarios
• Retina scanning takes longer to complete than iris scanning
• Iris scanning is more widely accepted for commercial use than retina scanning

Afghanistan Begins Biometric Registration of Civil Service Employees

In a recent turn of events, Afghanistan’s Independent Administrative Reform and Civil Service Commission (IARCSC) is now registering biometric data of all civil service employees. The first person registered in the new Human Resources Information Management System (HRIMS) was the head of IARCSC. Biometrics and retinal scanning bring both challenges and improvements to identity verification and security.

AMBIS Biometric Identification Ready for Deployment in India in 2020

AMBIS (Automated Multi-Modal Biometric Identification System) is now ready for full deployment across Maharashtra, India. THis system was developed to assist law enforcement with identity verification. AMBIS was developed in France based on National Institute of Standards & Technology (NIST) and process guidelines. According to India Times, ” Equipped with an advanced face recognition technology, the system can be connected with the CCTV cameras installed at railway stations, airports, traffic signals, markets and bus stands.” This will have a huge impact on crime and fraud prevention in India.

Conclusion

Differentiating between iris scanning and retina scanning is important if your company is considering investing in biometric technologies for security. It can help your team determine which scanning method is the most appropriate fraud prevention solution for your business. If you are looking for wide consumer adoption of the technology, iris scanning may be a better choice for your company. Likewise, if high accuracy and increased security is important for your business, retina scanning may be the choice for your company.

References

Mayhew, S. (2019, February 18). Afghanistan begins BIOMETRIC registration of civil service EMPLOYEES: Biometric update. Biometric Update |. https://www.biometricupdate.com/201902/afghanistan-begins-biometric-registration-of-civil-service-employees.

Mohammed Akhef / TNN / Dec 30, 2019. (n.d.). AMBIS to roll out across state from 2020, help in better crime detection: Aurangabad news – times of India. The Times of India. https://timesofindia.indiatimes.com/city/aurangabad/ambis-to-roll-out-across-state-from-2020-help-in-better-crime-detection/articleshow/73022336.cms.

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Current Challenges for Anti-Money Laundering Solutions

The anti-money laundering solutions most banks and other financial institutions use are outdated and inadequate to meet today’s business needs, let alone tomorrow’s business needs. Current systems for transaction monitoring are unable to keep up with the pace and volume of transactions today in the digital age.

Digital financial transactions are fast, typically encrypted for greater security and often anonymous. Most of the time they do not require financial institutions as intermediaries. Because of this, current AML solutions are unable to investigate these types of transactions, leaving them vulnerable to abuse by cybercriminals. A good example is cryptocurrencies, which is used for money laundering activities by criminals because it remains mostly unregulated at this time.

Another important factor that complicates AML efforts is that currently they are highly individualistic in nature. Financial institutions all have their own processes in place to prevent money laundering. Countries also vary in their regulations against money laundering. A need for standardization is there in order to clarify the AML process, make it more efficient and ultimately automate it. Blockchain would create a framework that allows for top-level monitoring of whole transactions.

What is Blockchain

Blockchain is a distributed ledger framework that cryptographically stores data on an open or private network. Blockchain is a technology that aims to transform the backend systems that most businesses run on. It aims to become a lower cost, more efficient way to share information and data between open and private networks.

Blockchain is useful as a tool in new anti-money laundering solutions for fraud and risk departments across financial institutions. This is because the data that is stored on the framework is immutable. Within a blockchain system, data entries cannot be edited or modified.. Instead, they can only be appended after entering the system. This is particularly useful in AML transaction monitoring because it prevents criminals from trying to mask their transactions to prevent detection. The transactions will always be on the blockchain, no matter what a criminal does to attempt to modify them.

This will help banks save money in the long run. For example, Deutsche bank recently was fined over $700 million in 2017 because of accusations that it helped launder money out of Russia. Earlier this month, USB was fined over $5 billion by French regulators for money laundering and tax evasion. With blockchain technology in place, it would be more difficult for associates to evade the AML process and cause damage to a financial institution’s overall reputation.

Blockchain for AML Compliance

An anti-money laundering solution built on the blockchain could leverage the inherent qualities of the blockchain in order to identify and prevent illicit transactions. If the software used to monitor transactions is an AI with machine learning functionality, it could effectively run through strings of data to determine if money laundering activity is occurring. The reason this would work is that AI will be able to detect patterns in large volumes of data while adapting to changes in criminal activity over time with its machine learning capabilities.

These tools would automate the transaction monitoring process and make it much more efficient and effective than current processes are today. Plus, if suspicious activity is detected, it could be highlighted, flagged and stopped for further investigation. All this activity would be immutably stored on the blockchain as well.

Implications for AML Regulators

Blockchain technology and its distributed ledger should be incorporated into new fraud and risk compliance solutions for financial institutions across the globe. It creates opportunities for more transparency between financial institutions and regulators in the long run. By using the shared and immutable ledger blockchain offers, financial institutions would have an easier time reporting suspicious activity with regulators all over the world. This transparency would create new opportunities for financial institutions and regulators to work together. By pushing for standardization with the use of blockchain technology, they could simplify the creation of anti-money laundering solutions that truly work. Together, they could make a difference in limiting money laundering in the global economy.

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The deadline for most states to meet compliance was October 1, 2018, although deadlines vary by state. With this deadline come and gone it can be confusing to determine which states are compliant and which are not.

At IDMERIT, we have gathered the latest news about REAL IDs and succinctly compiled it in this post. It is our duty to know the latest in ID trends in order to provide the best and most accurate identity verification services for our clients. With the information outlined in this blog post, you will be able to determine if the ID you are using is compliant with federal standards.

Which States are Compliant

More than half of all US states are compliant with Real ID. This list has grown since we last wrote about the topic since many states have been working diligently to meet requirements. According to the Department of Homeland Security (DHS), the list of compliant states and territories includes:

• Alabama
• Arizona
• Arkansas
• Colorado
• Connecticut
• Delaware
• District of Columbia
• Florida
• Georgia
• Hawaii
• Idaho
• Indiana
• Iowa
• Kansas
• Louisiana
• Maryland
• Massachusetts
• Michigan
• Mississippi
• Minnesota
• Nebraska
• Nevada
• New Hampshire
• New Mexico
• New York
• North Carolina
• North Dakota
• Ohio
• Puerto Rico
• South Carolina
• South Dakota
• Tennessee
• Texas
• Utah
• Vermont
• Virginia
• West Virginia
• Wisconsin
• Wyoming
• Washington

Issues Verifying Identities that Noncompliant States Face

All the states that are currently not compliant with federal regulations have been given an extension. These states all face a variety of different challenges causing them to receive an extension on compliance.

1.Alaska

Alaska is required to meet Real ID requirements by October 1, 2020. The state DMV began issuing Real IDs on January 2, 2019. One of the biggest issues Alaska faces is how they will issue IDs in communities without local DMV offices. They do not have a solution yet, but are actively working on finding a resolution that works towards meeting federal compliance.

2. American Samoa

The American Samoa has an extension for Real ID compliance until October 10, 2019.

3. California

The deadline for Real ID compliance in California has been extended until January 10, 2019. One of the issues California has faced is that its process for producing Real IDs has been deemed federally noncompliant. The state asked residents for one document to prove state residency, while the federal government requires two. This was determined after the state had already produced 2.3 million Real IDs through the noncompliant process. The federal government will allow California residents with a Real ID to be considered in compliance without having to get a new one. When the ID expires, residents will have to show a second residency document in order to renew their Real ID. In April 2019, the state will switch to a new protocol for creating Real IDs that meets federal standards.

4. Guam

Guam has until January 10, 2019, to meet federal Real ID compliance. It began issuing Real IDs to its residents in June 2018. Enforcement for Real IDs will begin October 2020.

5. Illinois

Illinois is required to be compliant with the Real ID Act by June 1, 2019. It will begin issuing Real ID cards to residents in the spring of 2019. The state will begin to be enforced by DHS in October 2020.

6. Kentucky

Kentucky has received an extension for Real ID compliance until August 1, 2019. The state will begin issuing Real ID compliant ID cards in early 2019. Real ID enforcement begins in October 2020.

7. Maine

Main has until October 10, 2019, to meet Real ID compliance. The DHS will not begin enforcing Real ID until October 2020. Main has had difficulty implementing the systems and procedures needed to issue Real IDs. They plan to start issuing the compliant IDs on July 1, 2019.

8. Missouri

Missouri has until August 1, 2019, to become Real ID compliant. The state expects to be fully compliant with Real ID by March 2019. The DHS will begin enforcing Real IDs in October 2020.

9. Montana

The deadline for Real ID compliance in Montana is June 1, 2019. It plans to begin offering Real ID cards to state residents early in 2019. Enforcement for Real IDs begins in October 2020.

10. New Jersey

New Jersey has until October 10, 2019, to become federally compliant with Real ID standards. Nevertheless, the DHS will not enforce the Real ID Act until October 2020. The state will begin issuing the compliant IDs in the spring of 2019.

11. North Mariana Islands

The Northern Mariana Islands have until June 1, 2019 to comply with the Real ID Act.

12. Oklahoma

Oklahoma has until October 10, 2019, to become Real ID compliant. The state is actively working toward full compliance with the Act. States must meet 43 requirements to be considered compliant. Oklahoma is fully compliant with 30 requirements and partially compliant with 12.

13. Oregon

The deadline for compliance is October 10, 2019 in Oregon. The state expects to become fully compliant in July 2020 when their DMV begins using a new internal system.

14. Pennsylvania

Pennsylvania will begin issuing Real ID cards to residents starting in March 2019. The state has spent over $24 million in order to prepare issuing the ID cards. Pennsylvania has allowed residents to pre-register for Real IDs in two ways.

In the first, residents with IDs issued after 2003 will be able to pre-apply for a card since verifying identities of these residents is easy. Their proof of address is already on file with the state Department of Transportation. Over 200,000 Pennsylvania residents have already taken advantage of this opportunity.

In the other, residents with IDs issued before 2003 will be able to pre-register by proving their identity through an original certified copy of their birth certificate, valid passport, social security card, marriage license or order from family court. They will also have to provide two proofs of current address such as a valid driver’s license and a bank statement or utility bill less than 90 days old. 30,000 residents have applied for Real IDs this way so far.

15. Rhode Island

Rhode Island has until May 1, 2019 to become federally compliant with the Real ID Act. It began offering the compliant IDs to state residents in December 2018. Enforcement of the ID will begin on October 2020.

16. US Virgin Islands

The US Virgin Islands must comply with the Real ID Act by April 1, 2019. The DHS will begin enforcing Real IDs in October 2020.

Conclusion

Most states are actively working to meet Real ID compliance by federally mandated deadlines. Furthermore, DHS does not plan to start enforcing Real ID with residents until October 2020. This gives state residents plenty of time to either register for a Real ID or obtain another form of identification to use for travel, enter federal buildings and nuclear power plants, such as a federal passport. Verifying identities is critical for the security of the US. Real ID helps the US do this and protect the US from harm.

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