The Financial Action Task Force (FATF) have recently released draft digital identity guidance for consultation. Here we look at the main themes emerging from the guidance, and how this might impact on the UK digital identity ecosystem.
FATF produces a range of guidance intended to supplement the 40 FATF recommendations that provide the backbone of the international anti-money laundering and terrorist financing regime. Recommendation 10 provides the blueprint for how Customer Due Diligence (CDD) is undertaken: the types of checks that regulated organisations have to carry out, and the types of circumstances in which CDD is required.
The new draft guidance released by FATF looks at how digital identity solutions can meet CDD requirements, and the issues that governments and regulators, regulated entities themselves and digital identity providers must consider when utilising digital identity to identify a customer.
As ever with FATF guidance it straddles existing best practice and emerging practice. It therefore directly reflects a lot of recent changes that we have already seen captured in the 5thMoney Laundering Directive (5MLD) and other initiatives, but it also goes beyond existing rules in a number of areas, and by so doing points towards the likely direction of travel for the anti-money laundering (AML) regime in the years ahead.
So, what are the main themes that emerge from the guidance, and what are their potential implications?
Read the full article written by Ewan Willars.