Close Menu
Newsy Tribune
  • Home
  • News
    • United States
    • Europe
    • Canada
    • Australia
    • Asia
    • Africa
    • South America
  • Politics
  • Business
  • Entertainment
  • Lifestyle
  • Science
  • Money
  • Sports
  • Tech
Trending

Warriors Could Lose Crucial Star Due to Clashing Roster Plans

May 31, 2025

Guatemala jails ex-paramilitaries for 40 years over rapes during civil war

May 31, 2025

Hunter Biden seen driving Toyota rental in South Africa after his Secret Service detail was terminated

May 31, 2025
Facebook X (Twitter) Instagram
Trending
  • Warriors Could Lose Crucial Star Due to Clashing Roster Plans
  • Guatemala jails ex-paramilitaries for 40 years over rapes during civil war
  • Hunter Biden seen driving Toyota rental in South Africa after his Secret Service detail was terminated
  • Never eat these foods at work if you want your co-workers to like you, etiquette expert says
  • Jenna Bush Hager, Al Roker and More ‘Today’ Stars Support Sheinelle Jones at Her Husband’s Funeral
  • California Board Gives Update On Climate Reporting, Wont Meet July Deadline
  • Trump hails Nippon Steel as ‘great partner’ for US Steel in rally
  • Steelers players join Trump on stage at Pennsylvania event and give him custom jersey
Login
Facebook X (Twitter) Instagram
Saturday, May 31
Newsy Tribune
Subscribe Newsletter
  • Home
  • News
    • United States
    • Europe
    • Canada
    • Australia
    • Asia
    • Africa
    • South America
  • Politics
  • Business
  • Entertainment
  • Lifestyle
  • Science
  • Money
  • Sports
  • Tech
Newsy Tribune
Home»Money
Money

Know Your Customer Requirements Now Applicable at Your Local Financial Institution

News RoomBy News RoomDecember 11, 2024
Share Facebook Twitter Pinterest LinkedIn Telegram Email WhatsApp Copy Link

The digital age has ushered in a new era of bank robbery, one where data, not cash, is the prized loot. While traditional bank heists posed limited systemic risk, the theft of personal information, including social security numbers, dates of birth, and account details, creates a ripple effect far beyond the immediate victims. The breach at Evolve Bank & Trust serves as a stark example, highlighting the vulnerability of personal data and the potential for widespread misuse, particularly in creating fraudulent accounts and facilitating large-scale phishing attacks. The current regulatory landscape, particularly Know Your Customer (KYC) regulations, ironically contributes to this vulnerability by requiring banks to store copies of sensitive identification documents, creating a honeypot for hackers. While KYC aims to prevent financial crimes, its current implementation often resembles security theatre, providing a false sense of security while creating a centralized repository of valuable data ripe for exploitation.

The effectiveness of KYC is further eroded by advancements in artificial intelligence, specifically deepfake technology. These sophisticated tools can now bypass liveness checks, even those requiring users to perform actions while holding up identification documents. This renders traditional KYC measures practically obsolete against determined attackers. The escalating arms race between AI-powered attacks and defensive measures creates a “Red Queen’s race,” where continuous effort yields minimal progress. Instead of engaging in this futile pursuit, the financial industry must embrace innovative solutions like cryptographic advancements, lessons from European Digital Identity wallet projects, and existing mobile phone and open banking infrastructure to build a truly robust and secure digital identity framework.

The Bank for International Settlements (BIS) envisions a future financial system, the “Finternet,” characterized by seamless, instantaneous, and global financial transactions. Digital identity forms the cornerstone of this vision, with verifiable credentials ensuring integrity and privacy. In this idealized system, individuals would utilize digital wallets, such as European Digital ID wallets, bank wallets, or even Google wallets, to securely share necessary information with financial institutions upon request. Authentication would be streamlined through methods like FaceID, and account details would be securely returned to the user’s wallet as verifiable credentials. This future is not merely a utopian dream; banks like HSBC are already experimenting with decentralized solutions for account opening using verifiable credentials powered by technologies like Polygon ID. These solutions enable the creation of reusable credentials for various transactions, extending beyond account access to purchases, loan applications, and even carbon credit management.

Current KYC procedures present significant friction for law-abiding citizens while posing minimal deterrence to criminals. The cumbersome and inefficient processes not only inconvenience users but also create vulnerabilities that are readily exploited by malicious actors. Bob Wigley, chair of UK Finance, proposes a potential solution: a National Wealth Service (NWS) app, mirroring the NHS app, that would consolidate an individual’s “economic footprint,” including credit ratings, KYC, and AML data, for seamless sharing with financial institutions. While implementation details may vary, the concept of a centralized, secure, and readily accessible repository of financial data addresses the inherent limitations of traditional KYC procedures.

While the NWS app concept offers a potential solution, alternative approaches leveraging advanced cryptographic techniques like homomorphic encryption, zero-knowledge proofs, and secure multiparty computation could offer enhanced privacy and security. These methods allow for data processing and verification without revealing the underlying sensitive information. For instance, a user could prove their age or residency without disclosing their full date of birth or address. Such cryptographic tools hold immense promise for building a future where identity verification is both secure and privacy-preserving.

In conclusion, the financial industry stands at a critical juncture. The increasing sophistication of cyberattacks, coupled with the limitations of traditional KYC procedures, necessitates a paradigm shift in how we manage and verify digital identities. Embracing innovative technologies like verifiable credentials, digital wallets, and advanced cryptography holds the key to creating a financial system that is both secure and user-friendly. Moving beyond security theatre requires proactive adoption of these technologies and a commitment to building a future where digital identities are robust, private, and empower individuals in the digital economy. The transition to this future demands a concerted effort from financial institutions, regulators, and technology providers to collaboratively design and implement solutions that address the evolving challenges of the digital age.

Related Articles

California Board Gives Update On Climate Reporting, Wont Meet July Deadline

How APIs, ESG-Linked Trade And “Kilowatt Tokens” Turn Sustainability Data Into Cash Flow

Jollibee Billionaire-Backed Hotel101 To Build 10,000 Rooms Worth $2.5 Billion In Saudi Arabia

Billionaire Sukanto Tanoto’s RGE, TotalEnergies To Build Solar Project In Indonesia

The End Of Privilege – Has The Dollar Peaked And Can The Euro Replace It

IRS Liens To Be Enforced Against Glen Stoll’s Property

Editors Picks

Guatemala jails ex-paramilitaries for 40 years over rapes during civil war

May 31, 2025

Hunter Biden seen driving Toyota rental in South Africa after his Secret Service detail was terminated

May 31, 2025

Never eat these foods at work if you want your co-workers to like you, etiquette expert says

May 31, 2025

Jenna Bush Hager, Al Roker and More ‘Today’ Stars Support Sheinelle Jones at Her Husband’s Funeral

May 31, 2025

Latest Updates

California Board Gives Update On Climate Reporting, Wont Meet July Deadline

May 31, 2025

Trump hails Nippon Steel as ‘great partner’ for US Steel in rally

May 31, 2025

Steelers players join Trump on stage at Pennsylvania event and give him custom jersey

May 31, 2025

Subscribe to News

Get the latest news and updates directly to your inbox.

Facebook X (Twitter) Pinterest TikTok Instagram
© 2025 Newsy Tribune. All Rights Reserved.
  • Privacy Policy
  • Terms of service
  • Contact

Type above and press Enter to search. Press Esc to cancel.

Sign In or Register

Welcome Back!

Login to your account below.

Lost password?