As well as combating fraud and financial crimes, the use of financial, regulatory, and supervisory technologies may help prevent the spread of the coronavirus. That’s according to global watchdog the Financial Action Task Force (FATF).
With self-isolation and social distancing now the norm in most parts of the world, digital/contactless payments and digital onboarding can further reduce the risk of customers spreading the virus. In this way, FinTech provides “significant opportunities to manage some of the issues presented by COVID-19”, explains the FATF.
It adds, “In line with the FATF Standards, the FATF encourages the use of technology, including FinTech, RegTech, and SupTech to the fullest extent possible.
“The FATF encourages the fullest use of responsible digital customer onboarding and delivery of digital financial services in light of social distancing measures.”
The FATF recently released Guidance on Digital ID, which highlights the benefits of trustworthy digital identity for improving the security, privacy, and convenience of identifying people remotely. This applies to both onboarding and conducting transactions, while also mitigating the risks of money laundering and terrorist financing (ML/TF).
“The FATF calls on countries to explore using digital identity, as appropriate, to aid financial transactions while managing ML/TF risks during this crisis,” says a statement from the organisation.
“When financial institutions or other businesses identify lower ML/TF risks, the FATF Standards allow them to take simplified due diligence measures, which may help them adapt to the current situation.
“The FATF encourages countries and financial service providers to explore the appropriate use of simplified measures to facilitate the delivery of government benefits in response to the pandemic.”