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I think the premise of the article is flawed: > KYC, or “know your customer,” is a process intended to help financial institutions, fintech startups and banks

by hedora 3y ago

I think the premise of the article is flawed: > KYC, or “know your customer,” is a process intended to help financial institutions, fintech startups and banks verify the identity of their customers vs Wikipedia: > * Know Your Customer (KYC) guidelines and regulations in financial services require professionals to verify the identity, suitability, and risks involved with maintaining a business relationship with a customer. The procedures fit within the broader scope of anti-money laundering (AML) and counter terrorism financing (CTF) regulations.* > KYC processes are also employed by companies of all sizes for the purpose of ensuring their proposed customers, agents, consultants, or distributors are anti-bribery compliant and are actually who they claim to be. Banks, insurers, export creditors, and other financial institutions are increasingly required to make sure that customers provide detailed due-diligence information. Initially, these regulations were imposed only on the financial institutions, but now the non-financial industry, fintech, virtual assets dealers, and even non-profit organizations are included in regulations. Generative AI isn’t going to help people that have been intentionally excluded from the monetary system obtain legitimate bank accounts.

costco 3y ago
That's not what the article is saying. The article is saying that the ability to pretty easily create realistic fake looking identities with AI will undermine e-KYC systems that are popular with online financial services. This would make fraud less difficult.
- hedora 3y ago
  But the services have to go back to a subcontracted government database to make sure that the fake identity belongs to an upstanding citizen, and that check should fail. (Unless the KYC providers are selling snake oil, which wouldn't surprise me, but that would make it even harder to feel sorry for them.)
  - costco 3y ago
    As far as I can tell no one is validating against government databases except for things like sanctions lists. For Americans they might use something like TLO in the best case. The identity verification companies like Onfido get a picture of both sides of an ID and then try to match the face of the person on the ID with the person in the selfie video. Presumably while doing some checks to see if it appears to be a fake. That's it. In the case of synthetic identity fraud, they establish a history with the credit bureaus by applying for cards and getting denied (eventually they are approved for some low level starter credit card) or getting added as an authorized user to someone with a good credit history (people on eBay sell this).

by hedora 3y ago

costco 3y ago

That's not what the article is saying. The article is saying that the ability to pretty easily create realistic fake looking identities with AI will undermine e-KYC systems that are popular with online financial services. This would make fraud less difficult.

hedora 3y ago
But the services have to go back to a subcontracted government database to make sure that the fake identity belongs to an upstanding citizen, and that check should fail. (Unless the KYC providers are selling snake oil, which wouldn't surprise me, but that would make it even harder to feel sorry for them.)
- costco 3y ago
  As far as I can tell no one is validating against government databases except for things like sanctions lists. For Americans they might use something like TLO in the best case. The identity verification companies like Onfido get a picture of both sides of an ID and then try to match the face of the person on the ID with the person in the selfie video. Presumably while doing some checks to see if it appears to be a fake. That's it. In the case of synthetic identity fraud, they establish a history with the credit bureaus by applying for cards and getting denied (eventually they are approved for some low level starter credit card) or getting added as an authorized user to someone with a good credit history (people on eBay sell this).