Improving the information trail

  • Nick Armstrong, CEO and Co-Founder, identitii

  • 03.09.2018 07:52 am

Financial IT: What is the Unique Selling Proposition of identitii for the banking and financial industry?

For many firms, collecting and checking the details and documentation needed to process certain types of transactions, for example cross-border corporate payments or corporate trade deals, can prove to be a very manual process that’s time-consuming and costly. This is especially true when you consider the significant number of anti-money laundering and sanctions checks required. These challenges often stem from the quality or incompleteness of the information that’s been provided with the transaction - resulting in low reconciliation rates, high numbers of payment exceptions and lengthy investigations.

identitii enables firms to use a secure and automated, permission-based system to share rich information required by the transacting parties, and record a detailed audit trail of all processes and activities. In doing so, identitii brings the benefits of new and innovative distributed ledger technology to an age old problem that’s only growing as more and more information is required for compliance checks.

We recognise that many banks realise huge benefits from their core payment processing and settlement infrastructure - they’ve often spent a significant amount of time and resources building a very secure and resilient architecture. Because identitii is an overlay solution that sits on top of existing systems and payment networks, using identitii doesn’t require firms to replace, change or upgrade their legacy infrastructure. Additional information can be appended to standard payment messages using a secure token, this minimises integration and IT costs.

Furthermore, the bank’s information is retained by the bank until it’s required for a transaction. The distributed nature of identitii’s architecture adds a further level of security, eliminating the single of point of failure that can exist when data is stored in a central location.

Financial IT: What is the main business / product line focus for identitii in 2018?

Our focus this year has been on building awareness of identitii’s Serra™ application. Designed specifically for the financial services industry, Serra uses distributed ledger technology to enable financial institutions to exchange supporting documents, transaction details, and KYC information with multiple counterparties in a secure, trusted and auditable manner.

Financial IT:  How long does it take you to implement your technology with a new client?

This really depends on the size and complexity of the project, but for a large tier 1 bank it takes approximately 3-6 months to implement our technology. Late last year, we launched our Software as a Service (SaaS) offering on the Microsoft Azure Cloud, this approach allows smaller financial institutions to be up and running with identitii in just 1-2 months.

Financial IT: Please give us a real-life case example of applying your solution in the bank or financial institution and the outcomes.

In 2016 identitii jointly won the SWIFT Innotribe Industry Challenge on compliance, which led to a successful pilot with seven large banks. The pilot focused on addressing growing operational costs by enabling banks and branches to more efficiently share the detailed information needed to complete investigations into payments flagged by sanctions screening and anti-money laundering detection systems. The result was an estimated average annual saving in manual processing costs of $15 million per institution.

Following on from this pilot, last year we completed a deployment with one of the world’s largest international banks, and our technology is currently being rolled out in production.

Financial IT: Does the product comply with GDPR?

The EU’s new GDPR legislation requires firms to adhere to a multitude of new rules governing how their customers’ personal data is handled, processed and secured. identitii can help financial institutions to comply by enabling firms to extract, link and permission individual pieces of data stored across separate legacy systems. This allows financial institutions to individually permission data subject to GDPR, helping to effectively protect the personal data the firm holds on each client and securely, and, in a way that can easily be audited, exchange this data with authorised parties as required in a trusted manner.

Financial IT: How secure is the solution provided by identitii?

Because we have designed identitii specifically for the financial markets, cyber security is of paramount importance. When firms use identitii all information is shared using a private distributed ledger and accompanied with a digital audit trail. This offers two important security measures:

Firstly, because the architecture is distributed there isn’t a single of point of failure. Data isn’t stored in a central location, reducing the possibility of the data being hacked. Also, any time the data moves it’s encrypted both at rest and in-flight.

Secondly, all information exchanged on the identitii distributed ledger is accompanied with a cryptographic audit trail recording the data’s origin and creating an immutable time-stamp of any changes. This means that a party receiving a document or piece of information can quickly understand who has accessed or changed it, and when and where those changes took place.

Delivering increased transparency and traceability, relevant parties can check who has viewed the information they need to make a decision on, understand whether it’s been amended and its provenance.  This provides financial institutions with greater assurance when completing anti-money laundering and financial crime compliance checks as they can quickly and more accurately assess the transaction’s intended purpose and requirements.

Financial IT: Do you have any rival products in the market?

We are starting to see banks develop their own networks to share information with their correspondent banking partners. However, initiatives that require wider industry buy-in can face challenges as the project can only progress as fast as the slowest participating bank.

One of the benefits of using a solution provided by a neutral FinTech third party, such as identitii, is that we can more easily push the boundaries on what can be achieved technologically with the latest innovations and speedily deploy solutions into the marketplace.

Financial IT: What is your route to market for the product?

We are working directly with financial institutions and also with innovative partners to provide joint technology offerings. For example, in May we announced a partnership with Blue Prism integrating identitii’s permissioned data sharing capabilities and verification engine with Blue Prism’s Digital Workforce, that’s used by businesses to automate complex work processes.

This joint offering was designed to help financial institutions securely digitise and automate corporate payment and trade transaction processes and provide a detailed audit trail to aid the efficient and effective detection of fraudulent activities.

Financial IT: We know that identitii is exhibiting at Sibos this year. What are your expectations from the conference?

We’re really looking forward to Sibos this year. Sydney is a fantastic choice of city. identitii’s headquartered in Sydney, and I’m based here, so I’m rather biased!

On a more serious note though, we are building a network of financial institutions, enabling these firms to securely share information so they can improve customer experience and reduce financial crime.

The annual Sibos conference is where the payments community comes together to explore the latest and most innovative new solutions out there designed to help solve industry problems. We believe that collaboration is the way forward for the financial services industry and where is better to continue on our mission to drive collaboration than at Sibos 2018.




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