Nick Armstrong, CEO of Identitii, believes technology can solve Asia's unique compliance issues.
Nick Armstrong, In your opinion what is the current status of compliance technology in Asia’s banks?
I would say it is evolving. We are seeing more uptake of RegTech solutions, including those that incorporate AI and Machine Learning. I think there are still challenges in uptake of new technologies as these often require process change as well.
This can be challenging for established financial institutions. Asia in particular has unique challenges that technology can help solve. Some compliance technology is focused on these particular challenges, like supporting documentation with cross-border payments.
Time to implement, and cost, are other barriers to uptake. At identitii we believe that modernizing legacy systems, rather than replacing legacy systems, is the lowest cost and fastest approach to adopting compliance technology. It requires the minimum amount of process change.
Is the region ahead of its peers in say the U.S. And Europe?
Depends on the particular use case. I think that for client onboarding, then yes, but transaction monitoring, probably on par. Europe with PSD2 has seen a rush of new technologies come to market.
«It goes beyond ‘Know Your Customer’ level reporting – we call it ‘Know Your Transaction»
The U.S. has some of the toughest regulatory requirements and this means that the technology being developed is reasonably advanced.
How different is Identitii to the current systems in use?
Identitii technology uses a private distributed ledger (or blockchain) to create a single source of truth for information sharing, helping banks to get more information about the identity of the transaction. It goes beyond ‘Know Your Customer’ level reporting – we call it ‘Know Your Transaction’.
Detailed information about each and every transaction, from the ‘who’ to ‘what’ to the ‘why’. Current systems do not allow for information sharing. Additionally, our technology allows for information to be pre-validated before the payment is sent, which is a new feature.
Can you be 100 percent confident that by using your product and Blockchain in general that financial crime will be eliminated?
I don’t think it is ever possible to eliminate financial crime completely. However, to put it in context, current industry estimates are that less than 1 percent of illicit flows are being detected and seized.
«I think that the open ecosystem approach is widely viewed as the right approach»
If we can improve that figure even marginally, the world we be a much safer place.
Are layers of legacy systems supplied by global bank IT specialists holding banks back from modernising/adapting to fintech alternatives?
No I don’t believe so. I think that there is a move towards APIs and modernizing legacy systems which is helping adoption of fintech / regtech technology. I think that the open ecosystem approach is widely viewed as the right approach.
How would private banks/wealth managers use your product?
Any bank that is involved in the movement of money over networks such as SWIFT and ACH, can use our technology to enrich their payments with more information, to improve compliance or improve the customer experience.
Outside of banking do you see potential in legal and real estate industries for Identitii?
Possibly. We are focused on banking right now, but I can’t rule out other verticals in the future.
Nick Armstrong is the co-founder and CEO identitii, a company that helps financial institutions to securely share information in a trusted, auditable and permissioned way. The solution reduces financial crime and improves the customer experience. Identitii recently won the Innotribe Industry Challenge on Compliance, a global competition run by SWIFT, and was in the KMPG/H2 Ventures 2016 Fintech 100.
