General Verification

How DIRO is Changing the Online Document Verification Landscape?

The rise of digital banking services, ACH payment, and third-party payment providers has changed the face of banking. The needs of customers are an ever-changing concept and to facilitate those needs, the financial industry is trying to offer faster and more secure transactions. To enjoy the benefits that come along with digital banking transactions, banks need to provide better security.

Customers from all over the globe can sign up for digital banking services with strong customer Identity verification solutions. Online documents can help banks and other financial institutions verify customer identities seamlessly and offer security to digital banking procedures. The use of documents to verify customer identities before opening a new account is a very old process. Now that banking has shifted online, so has the document verification process. Verification of online documents is really important for secure digital banking operations. By verifying driver’s licenses, proof of address, utility bills, and proof of income, financial institutions can verify customer identities and reduce red flags.

The FinTech Industry is full of solutions that can offer online document verification. AI-driven document verification solutions aren’t 100% reliable. To bridge the gap between security and transparency, DIRO’s online document verification solution helps organizations achieve that. 

DIRO is an award-winning online document verification technology that captures information directly from the original web source to verify documents. The document it verifies holds a stronger proof of authenticity as opposed to sharing and verifying original copies in person or uploading copies online. Using DIRO’s technology can help you access all banks, utility companies, and government databases with automated user consent and a strong Multi-factor authentication impersonation check.

Some of the major features of DIRO’s online document solution are:

  • Can verify online documents globally.
  • 24/7 live coverage for online document verification.
  • Instant document verification at any time. 
  • 5000+ document types to verify from. 
  • Verified documents can be tamper-proof as documents are provided a Digital fingerprint and uploaded on the blockchain. 

Different Types of Document Verification Methods

The concept of verifying documents for opening a new bank account or signing up for new services is relatively new. There are two types of methods for verifying documents. In the past, banks used to rely on human resources for verifying documents which were slow, tedious, and error-prone.

Here’s a breakdown of types of document verification methods.

1. Manual Document Verification

Verifying customer documents like government-issued identity documents, address proof, income statements, insurance documents, etc. for account opening and signing up for other banking services. Manual document verification relies on human resources to check for details in the documents. Humans can be easily tricked with fake documents created using image doctoring software. 

A business can be easily tricked and harmed by fraudsters using sophisticated technological methods. For humans, there is no way to distinguish between original documents and doctored documents. Manual document verification methods are slow, insecure, and inefficient. 

  • Manual document verification methods are easy to trick.
  • Take up a lot of time and resources for limited results.
  • A slow process that leads to slow customer onboarding.
  • Hard to fulfill KYB & KYC compliance with manual methods.

2. Automatic Document Verification

To bridge all the gaps in manual document verification, automatic or online document verification solutions came into existence. With the right kind of technology banks, financial institutions, and FinTechs can easily verify documents for new account opening and signing up for new services. 

DIRO’s online document verification technology makes it easy for you to verify online documents like driver’s licenses, proof of address, utility bills, student documents, etc. It provides secure, reliable, instant document verification with 100% proof of authentication. The proof of authentication is a court-admissible document with forensic data.

  • Instant document verification for improved customer experience and customer onboarding.
  • Unlike manual verification, you can verify any type of online document globally.
  • 100% proof of authentication. 
  • Captures information directly from the original web source to distinguish between original and fake documents.
  • Provides a digital fingerprint for authentic documents and uploads documents on the blockchain.

What Makes DIRO Different From Competitors?

There are a variety of document verification solutions available in the market, but most of them rely on machine learning and artificial intelligence (AI). Online document verification solutions that are driven by AI aren’t as reliable as claimed. AI-driven document verification solutions can be tricked by fraudsters with a constant feed of false data. AI-based online document verification solutions verify documents by verifying document data. Fraudsters can feed an array of false data that can help to trick solutions into thinking that it’s the real document.

DIRO technology, on the other hand, verifies documents by capturing information directly from the web source. Here’s a comparison of DIRO’s online document verification solution and other verification solutions.

DIROBrand ABrand BBrand C
Instant document verification30-50 seconds for document verificationUp to 1 minute for document verificationUp to 1 minute for document verification 
5000+ types of documents for verification3000+ types of documents for verification3000+ types of documents for verification4500 types of documents for verification
100% proof of authentication No proof of authenticationNo proof of authenticationNo proof of authentication
Verified court-admissible documentsNo court admissible documentsNo court admissible documentsNo court admissible documents
Doesn’t require photos or screenshots for verifying documents. Requires images for document verification.Requires images for document verification.Requires images for document verification.

Conclusion: How DIRO’s Solution is Unique from Others?

Banks, financial institutions, and governments can’t trust photos or screenshots of customer documents as they can be easily doctored using technology. This is the reason why organizations need online document verification solutions that can verify documents instantly, improve the customer onboarding process, and reduce fraud.

DIRO allows customers to provide an original document from any online source like banks, government databases, or private databases for ID verification. DIRO’s innovative solution can be used across banking and other industries.


Proactive Customer Communication

In the digital age, banks face the constant challenge of effectively communicating with their customers to prevent and manage fraud incidents. The results of a recent global consumer fraud survey highlight the need for proactive, personalized customer communication to detect and prevent fraud, as well as to efficiently resolve fraud cases.

However, meeting customer expectations in this area is not a simple task, as dissatisfaction with a bank’s response to fraud management can lead to customer churn.

Power of Proactive Communication

To demonstrate care for their customers’ financial well-being, banks must find ways to be proactive in their communication. One of the most effective ways to show this care is by actively working to detect, prevent, and notify customers about potential fraud incidents. 

While fraud detection measures strive to minimize false positives, there will always be cases that appear to be fraudulent but are not.

Consider a scenario where a customer makes an unusual purchase, such as expensive diamond earrings. Since this transaction deviates from the customer’s typical spending pattern and involves an unfamiliar merchant, it may trigger a fraud alert.

In such cases, proactive customer communication is essential. A quick, automated SMS message from the bank can allow the customer to verify the purchase and avoid any potential embarrassment at the checkout. 

When executed correctly, this communication reinforces a sense of protection for the customer. However, if the communication is incorrect or mishandled, it can result in a negative experience that requires significant resources to rectify and may damage the customer’s relationship with the bank.

Consumer Preferences for Communication Channels

Globally, customers prefer digital channels for communication, such as text messaging, emails, bank apps, and third-party messaging services, over traditional analog methods like phone calls. 

According to a survey, nearly 80% of customers worldwide prefer digital channels for payment verification. Text messaging is the most favored method, with 43% of customers preferring it, followed by 17% who prefer email.

However, it’s important to note that payment verification preferences vary across countries. In the United States, 64% of customers prefer text messages for verification, while only 2% prefer third-party messaging apps. 

In Brazil, the preferences are more diverse, with 28% preferring text messages, 30% favoring bank apps, and 12% opting for third-party messaging apps. 

Thailand stands out from the global group, as 41% of respondents in the country prefer phone calls for payment verification.

In regions like the European Union, customer verification methods are driven by regulatory requirements. Strong customer authentication dictates that many payments must be authenticated using two out of three methods:

  • Inherence (biometrics)
  • Possession (e.g., mobile phone)
  • Knowledge (e.g., password)

This approach is being adopted globally with the introduction of 3-D Secure 2 for card payments.

With such diversity in communication preferences, banks face the challenge of effectively reaching out to customers through their preferred channels.

Addressing Gaps in Contact Information

Accurate customer contact information is vital for proactive customer communication. However, many banks struggle with outdated or inaccurate contact details. 

According to the survey, 22% of credit card customers worldwide report that their card provider does not have their correct mobile number. Similarly, 18% of debit card customers report inaccurate mobile numbers, and 28% report inaccurate home addresses.

The impact of inaccurate contact information goes beyond basic communication issues. Mobile numbers are increasingly linked to user security and anti-fraud controls.

In the UK, almost 20% of customers report that their bank does not have their correct mobile phone number. This becomes problematic if the bank relies on sending one-time passcodes via SMS for payment authentication. 

In many cases, the requirements of PSD2 Strong Customer Authentication prevent issuers from bypassing these checks. As a result, banks must find alternative methods to authenticate payments for customers with mismatched contact details, or the payment will fail.

Considering that there are over 50 million adults with a bank account in the UK, and 70% of them also have a credit card, it is estimated that more than 10 million individuals may have discrepancies between their actual mobile numbers and the numbers their card providers have on record for communication, authentication, and identity verification purposes.

The Cost of Negative Experiences

When banks struggle to contact and engage customers effectively, they face significant repercussions. The survey reveals that 83% of customers worldwide will either complain to their bank (56%) or switch banks (27%) if they are unsatisfied with the bank’s response to a fraud event.

According to the Bank Administration Institute (BAI), banks can spend up to $10 per contact in their call centers. Any increase in contact center volume leads to escalating costs for banks, not to mention the risk of losing customers to competitors. 

Proactive and personalized communications are crucial for maintaining stability and fostering growth.

Meeting Customer Expectations

To summarize, consumers prefer digital channels for communication, and banks must bridge the gap in contact information to provide proactive customer communication. Failure to do so can result in increased contact center costs, a decline in brand equity, and customer attrition.


Knowledge-Based Authentication (KBA) Guide

Knowledge-based authentication or KBA is an authentication method that relies on a series of questions to verify a person’s identity. KBA is one of the oldest authentication methods to prevent fraud. Without answering a series of questions, a user can not access the account.

KBA at its core indicates that it’s a type of authentication based on the knowledge that only a user has. The authentication method is based on the idea that only the true owner of an account would have the ideal information and will be able to access the account.

Knowledge-based authentication has two different categories:

  • Static
  • Dynamic

The distinction is based on the type of questions. The questions can range from basic personal information to complex questions. 

While KBA sounds like the most secure authentication method, it is slowly becoming a thing of the past. Today, chances are you’ll see KBA on 1 out of every 1,000 websites.

The password reset and account recovery process has completely got rid of KBA as an authentication method. Moreover, KBA has become more and more susceptible to vulnerabilities in today’s time. 

In terms of multi-factor authentication, KBA is part of the “knowledge” type of authentication. Which is “something a user knows”, alongside passwords.

Let’s break down the different types of KBAs below and the challenges associated with them:

Static KBA

Static knowledge-based authentication is one of the most used security methods and is also called “shared secrets”, or “shared secret questions”.

Most common examples include:

  • What is your parent’s name?
  • What is the name of your pet?
  • Your favorite color?
  • What is the name of the street of your childhood home?

The user chooses the static KBA questions whenever they sign up for an account. So, whenever a user wants to sign up, they have to answer the questions that they chose.

The biggest problem with KBA is that it is open to vulnerabilities. With the rise of social media, fraudsters can find answers to a lot of questions.

The biggest example of this is an incident in 2008 when the Alaska governor’s email account was hacked. The password to her Yahoo! Account was changed by fraudsters. They accessed her account with security questions such as her date of birth, zip code, and other information that is readily available on the web.

Dynamic KBA

Unlike Static KBA, dynamic KBA doesn’t require the users to define a security question when making a new account. 

This means that all the questions about the user are generated in real-time. The questions are based on the ID number and aren’t usually available in the individual’s wallet. 

This is the reason Dynamic KBA is sometimes also called “Out-of-wallet questions”.

The dynamic KBA questions are usually more specific and offer alternatives, such as:

  • Which of these addresses matches one of the houses where you lived in 2005?
  • Choose the last digits of your social security number.
  • Which one of these purchases matches the last purchase you made on your account?

The answers to these questions are based on the user’s activities. But, there’s a small chance that the information could also be available publicly. Especially with the growing number of data leakage. 

There is also a third classification which is known as advanced dynamic KBA. The primary difference is that the security questions are generated from proprietary data that are stored behind a firewall.

Alternative to Knowledge-Based Authentication

KBA identity verification has become less effective since the rise of social media. As we stated above, answers to a lot of questions can be answered by visiting a potential victim’s social media profiles.

Not just social media, data leaks, and advanced phishing attacks also make KBA more vulnerable. That is one of the reasons multi-factor authentication is so important in today’s time. Additional authentication methods have to be used to secure accounts.

Other account authentication methods have grown in a way that is making KBA obsolete.

Other Methods of Account Authentication

Today, businesses use a lot of other authentication methods apart from knowledge-based authentication.

Some of the most common authentication methods include:

  1. Physical Security Keys

One of the primary reasons to use security keys is that only the user has access to it. A physical key makes sure that the account isn’t vulnerable to data breaches/phishing attacks. 

If the user ends up losing or damaging their physical key, users can rely on secondary authentication methods to regain access to the physical key.

  1. Phone-as-a-Token

Information stored in a mobile phone can also be used to identify a user’s identity. There are a lot of Phone-as-a-Token security solutions that businesses can use. 

This method has grown exponentially over time with the rise of mobile devices. One of the reasons behind the popularity is that users don’t have to carry any additional security key or data.


Know Everything about Data Risk Assessment

In today’s digital world, safeguarding sensitive data is crucial for businesses. One key aspect of data protection is conducting a thorough Data Risk Assessment (DRA). This comprehensive guide will walk you through the importance of DRA, its benefits, and a step-by-step process to conduct one efficiently.

Understanding Data Risk Assessment

Data Risk Assessment is a systematic process that entails reviewing, analyzing, and evaluating the locations where sensitive data is stored and managed. This data can include intellectual property, personally identifiable information (PII), and other critical business information.

The main objective of a DRA is to identify potential risks to sensitive data and implement appropriate measures to mitigate these risks.

Importance of Data Risk Assessment

Conducting a Data Risk Assessment is vital for several reasons:

  • Visibility: A DRA provides insight into all potential threat vectors that could lead to security or privacy violations, ensuring you know exactly what data you have and where it is stored.
  • Risk Management: Identifying and assessing the risks associated with managing PII and other sensitive data enables you to make informed decisions about data security investments and risk tolerance.
  • Compliance: A DRA helps you maintain and demonstrate compliance with legal, regulatory, and industry-standard requirements.
  • Vulnerability Analysis: By conducting a DRA, you can identify potential vulnerabilities that may increase the likelihood of data leakage or breaches.
  • Security Metrics: With a DRA, you can establish key performance indicators (KPIs) for your data security efforts, allowing you to track progress and make improvements.

Primary Steps in Data Risk Assessment

A comprehensive Data Risk Assessment typically follows a three-step process:

1. Map Data to Applications

The initial step in a DRA involves gaining full visibility into all data stored, collected, and transmitted by your organization. This process is known as creating a data footprint. Key elements to define during this step include:

Data Owners/Data Stewards

Identify individuals responsible for the collection, protection, and quality of data within a specific department or domain.

Data Types and Attributes

Identify and tag sensitive files with classifications to enhance controls.

  • Data Classification

Determine the risk level and potential impact on the organization if data is compromised.

For effective data classification, consider assigning risk levels such as high, medium, or low, and classification categories like:

  • Restricted

Data whose unauthorized disclosure, alteration, or destruction poses a high level of impact on the organization.

  • Private

Data that is only to be seen by a selected few eyes. Unauthorized disclosure of this data could lead to fraud, and significant damage to the organization and consumers. 

  • Public

Data whose unauthorized disclosure, alteration, or destruction poses a low level of impact on the organization.

Once you have covered all the responsible parties and the level of risk associated, you need to map the data to the apps that use it. This mapping should include:

  • Applications: A list of applications that query or use the data.
  • Data Environment: Geographic locations or regions where data is stored.
  • Data Flows: The path data takes between applications, databases, and processes.
  • Controls: Security measures used to protect the data in question.

2. Assess Risk

This stage involves reviewing, analyzing, and evaluating threats and vulnerabilities that could put data at risk. Risks to consider include:

  • Excess Access: Users who have more access than necessary to complete their job functions.
  • Outdated User Permissions: Users who retain access from previous roles within the organization and no longer require that level of access.
  • File Sharing: Permissions allowing access to data by anyone with a link.
  • Collaboration Tools: Sharing data through chat tools like Slack or Microsoft Teams.

Automated solutions can help streamline the risk assessment process by scanning data repositories and analyzing data storage, handling, and security processes, practices, and controls.

3. Remediate Vulnerabilities

After assessing potential risks, it is essential to mitigate these risks by addressing the identified vulnerabilities. Some remediation activities include:

  • Principle of Least Privilege: Ensure users have the least amount of access needed to complete their job functions using role-based access controls (RBAC) and attribute-based access controls (ABAC).
  • Multi-factor Authentication (MFA): Implement additional authentication controls around sensitive data, including step-up authentication when users move between applications and modules.
  • Data-centric Security Policy: Focus on securing sensitive data types with policies and controls that consider business context and data transmission across applications and storage locations.

Transitioning from a traditional security approach to a data-centric security approach can be challenging. 

However, with distributed workforces connecting to your data from the public internet, securing the transmission itself is crucial. This can be achieved using a virtual public network (VPN) or Secure Access Service Edge (SASE) to protect data in transit.


Performing a comprehensive Data Risk Assessment is crucial for any organization to safeguard sensitive data and maintain regulatory compliance.

The three-step process outlined in this guide will assist you in identifying potential risks, mapping data to applications, assessing vulnerabilities, and implementing effective remediation strategies.


Common Challenges in Risk Management

It is almost impossible for lenders to measure and manage credit risk, based on the disruptive patterns in consumer behavior in the last 2 months. How can large banks ensure that their digital transformation programs are working perfectly?

Managing risks is becoming tougher in today’s time, and businesses from all over the globe are implementing new methods.

Managing Risk Models in a Crisis

One of the biggest problems faced by risk leaders worldwide involves changes in consumer risk. Leaders also need to know how to measure these risks to be able to better decisions. 

Every major change in the economy brings up the issue of risk model performance.  The current models are based on risk models prior to Covid.

Robust risk management models will keep performing well even when the situation in the financial industry has changed. But the actual level of risk will change, making the model monitoring and governance more critical.

Biggest Challenges in Risk Management Today

There are 5 major challenges in risk management as of today, including:

1. Failure to Use Appropriate Risk Metrics

Value-at-risk or VaR is a common risk metric, but it only tells the largest loss a firm has incurred at any given time. VaR gives no idea about the distribution of losses that exceed VaR.

This would suggest the application of VaR doesn’t guarantee the success of risk management. The effectiveness of implementing VaR also depends on the liquidity of the financial market.

2. Measurement of Known Risks

Risk managers sometimes mistake accurately depicting the probability and the size of the losses. They could also use the wrong distribution channel. For a financial institution with endless positions, although they may properly estimate the distribution associated with every position.

Unable to measure, or wrongly measure a known risk is a big challenge in risk management.

3. Failure to Take Known Risks into Consideration

Sometimes, risk managers face challenges in considering all the risks in a risk management system. Sometimes it’s because of neglect, and sometimes it’s because of the additional expense. This happens because it’s impossible to forecast future events.

4. Unable to Communicate Risks to Top Management

Risk managers have to share information about the risk position of the organization with the top management. The management and the board have to take this information into account and come up with a risk management strategy.

If a risk manager is unable to provide this information to the top, they won’t be able to come up with a risk management strategy. The strategy they do come up with is based on ill information. This leaves the firm vulnerable and unable to manage risks properly.

5. Failure in Monitoring and Managing Risks

The last challenge for risk managers is to capture all the changes in the risk characteristics of securities to adjust strategies accordingly. As a result, risk managers often fail to monitor or get rid of risks simply because the risk characteristics of security may change too quickly to allow them to assess them, and put on risk-preventing methods accordingly.


Crypto Regulations in Canada & U.S: Latest Updates and What You Should Know

The regulatory landscape for cryptocurrencies has been changing rapidly in the past few months. New regulations, along with old ones, have also come into force. In this article, we will be discussing the latest developments in the crypto regulations landscape in Canada and United States. The concerns around potential risks arising from investing in cryptocurrencies or token sales led to a tightening of the regulatory environment by several securities regulators in both the United States and Canada.

The Canadian Securities Administrators (CSA) published a notice on September 12 that outlines their views on how securities laws apply to businesses that deal in virtual currencies such as bitcoin and ether. And on September 25, the U.S Securities and Exchange Commission (SEC) announced that it will begin monitoring digital token sales to protect investors from risks involving unregistered securities.


Canada has been one of the most active jurisdictions in terms of regulating cryptocurrencies, digital tokens, and Initial Coin Offerings (ICOs). As early as 2013, the Canadian government published an analysis of the risks associated with cryptocurrencies. In the same year, Canada’s federal budget stated that the government will “develop options for the treatment of virtual currencies”.

In December 2017, the Canadian Securities Administrators (CSA) published a notice that explains how regulation of “securities offerings of investment contracts” applies to ICOs. The notice notes that “an investment contract exists when a person invests their money in a business and expects to earn a profit from the investment”. The CSA also clarified that an ICO falls under the definition of an ‘investment contract’. Therefore, the sale of cryptocurrencies or tokens cannot be done outside of the regulatory framework.

United States

The United States has also been proactive in regulating cryptocurrencies, digital tokens, and ICOs. However, there is a significant difference between the regulatory approaches taken by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). As far as cryptocurrencies are concerned, the SEC is of the view that they are securities and therefore, they are subject to the Securities Act of 1933 and the Securities Exchange Act of 1934. The CFTC, on the other hand, believes that cryptocurrencies are commodities and are regulated by the Commodity Exchange Act of 1936.

Exchange-Traded Funds (ETF) Proposals

An ETF is a fund that owns the underlying assets (in this case cryptocurrencies) and divides ownership in the fund into shares. These shares are then listed and traded on a stock exchange. If an ETF has a good performance, it means that the value of the fund will increase and the shares will be worth more. A few exchanges have filed proposals to the SEC for the launch of ETFs that will invest in cryptocurrencies as well as tokens.

The Winklevoss twins, who are well known for their involvement in cryptocurrencies, have also applied for a Bitcoin ETF. Most of these proposals are still under consideration by the SEC. However, in August, the SEC rejected a proposal filed by the Winklevoss twins for a Bitcoin ETF. The SEC noted that the proposal was not consistent with the definition of ‘security’ as provided in the Securities Act of 1933 and the Exchange Act of 1934.

Crypto Regulations in the EU

The EU has been thinking about crypto the same way as other countries. According to a report, around 17% of Europeans have purchased Crypto. Most residents see crypto as a long-term investment. It’s not yet accepted as a payment method. 

There is some curiosity about the topic as a lot of people are interested in learning about payment methods.

As of right now, there are different crypto rules that every country has set for itself. In the 5AMLD regulations, crypto exchanges and crypto wallet providers are considered “obliged entities” and they’ll have to face the same rules as other financial institutions. 

While 5AMLD brought crypto exchanges under the scope of AML regulations, there’s not a single KYC rule across the EU. In 6AMLD, there will be a single guideline/rulebook for KYC all across the EU

Currently, the directive is making its way through the member states’ legislative processes, and it will take some time for complete implementation.

Regulation on Markets in Crypto Assets

In September 2020, the EU Commission proposed the regulation on markets in Crypto assets to provide some kind of legality around the treatment of crypto-assets. The end goal is to promote innovation, offer proper protection to consumers, and make sure that the financial market stays stable.

The EU Commission approved the regulation in March 2022, almost pushing it towards becoming a law. It is expected to become a law by 2024.

According to the commission, enabling full access to the internal market and providing legal certainty will lead to innovation. 

To minimize the risk of money laundering, the goals of MiCa include:

  • Managers and principal shareholders are perfect for purpose and have sufficient expertise in dealing with AML and Combating the Financing of Terrorism regulations. 
  • Robust internal control and risk assessment mechanisms, systems, and procedures are set in place to make sure the confidentiality of information is kept intact. 
  • Crypto assets service providers need to maintain records of all kinds of transactions, orders, and services related to crypto-assets that they offer.
  • Systems are set in place to detect potential market abuse committed by clients.

Consumers need to have a proper understanding of the EU and country-specific regulations for investments, banking, payments, and due diligence to understand MiCA.

Crypto Regulations for Germany

In Germany, 40 banks are already interested in offering crypto custody services after the latest AML laws. With EU-wide rules and an open market, there are some specific expansion opportunities.

Under the German Banking Act (KWG), licenses are required for crypto exchange platforms. BaFin is the German Federal Financial Supervisory Authority is the authority that has issued guidance for managing crypto securities registers. 

In Germany, the identity requirements include:

  • First and Last Name
  • Place of birth
  • Date of birth
  • Nationality
  • Residential address

Crypto Regulations for France

Out of all the countries, the KYC rules in France have been hardened the most to include all Crypto transactions. This includes crypto-to-crypto transfers. The rules in France are harsher than in other jurisdictions. Holding anonymous accounts is prohibited and there are strict KYC obligations for every account. All crypto accounts have to undergo the identity verification process.

The ID verification for a crypto account in France includes:

In the coming couple of years, Europe’s crypto landscape will change dramatically. Especially after MiCA and other regulations become effective.

New Regulations for Exchanges and ICOs

There have been changes in regulations governing exchanges, which are the platforms on which cryptocurrencies are traded. Most of these exchanges have been registered as trading facilities or alternative trading systems (ATS) under the Securities Exchange Act of 1934. A trading facility is an entity that regularly facilitates the purchase or sale of securities or commodities, while an alternative trading system is an entity that facilitates the trade of securities or commodities in a manner that does not trigger a regulatory requirement.

In Canada, exchanges must now register as trading or commodity boards. In the U.S., exchanges must register with the CFTC as commodity trading advisors (CTAs) or derivatives clearing organizations (DCOs). Similarly, the SEC has proposed regulations for ICOs. These regulations would require ICOs to register with the SEC as an investment of securities.


The regulatory landscape for cryptocurrencies has been changing rapidly in the past few months. New regulations, along with old ones, have also come into force. In this article, we will be discussing the latest developments in the cryptocurrency regulations landscape in Canada and United States. The concerns around potential risks arising from investing in cryptocurrencies or token sales led to a tightening of the regulatory environment by several securities regulators in both the United States and Canada.

The Canadian Securities Administrators (CSA) published a notice on September 12 that outlines their views on how securities laws apply to businesses that deal in virtual currencies such as bitcoin and ether. And on September 25, the U.S Securities and Exchange Commission (SEC) announced that they will begin monitoring digital token sales to protect investors from risks involving unregistered securities.


Verizon 2022 Annual Data breach Report

The 15 year old tradition is still standing strong with this week’s DBIR Annual Report. In the latest data breach report, Verizon highlighted their analysis of over 5,212 breaches and 23,896 security incidents to find the most common trends used by fraudsters. The 4 most commonly used methods include enterprise estates, credentials, phishing, and exploiting vulnerabilities.

In the report, it was stated that the hackers prefer to exploit the human element (errors, misuse, and social engineering). By combining these elements and the entry points above, hackers find access to organizations and begin stealing data. As a matter of fact, Verizon Data breach report states that 82% of all breaches this year were because of the human element. Human elements can be anything, including errors, misuse, and social engineering. 

Other factors were also included in the high number of data breaches, including:

  • 45% were related to credential resume
  • 25% of breaches were due to social engineering
  • 50% were related to remote access and web apps

Verizon’s 2022 Data Breach Report – Takeaway

The core of this year’s data breach report was that the weakest link out of all are humans. The reason for that is simple, it’s because users continue to click on malicious links, and they continue to lose or hand out their credentials. Users all over the world are making the same kind of mistakes that hackers love to exploit. This is what provides hackers the back passage to sensitive systems of a business. While humans are making mistakes, it’s not a surprise as humans are bound to make mistakes. If these reports are scaring you, then worry not, it’s not all bad news, because you can always find ways around this problem.

While eliminating the human element from this equation sounds challenging for businesses, there are other options as well. Verizon recommends the usual approach can reduce usual approach to reduce some challenges, such as two-factor authentication and/or implementing password managers for users, all In an effort to avoid the impact credentials introduce. 

Using this approach, you can reduce the likelihood of attackers being able to exploit poor passwords to gain access to applications,  systems, and data. These capabilities have been available online for use, but the number of data breaches is increasing every single year. 

Let’s focus on credentials for a moment. Why? If you do a quick search for credentials in the report, it appears over 86 times. With that in mind, the report suggests, “unfortunately, if you can access the asset directly over the internet by just entering credentials, so can the criminals.” If we can improve on authenticating users without the use of usernames and passwords, then organizations can reduce the risk of data breaches. 

Another way to reduce the risk of data breaches is by onboarding customers smartly. With DIRO online document verification, businesses can streamline their KYC and KYB verification processes. 

With smarter customer onboarding practices, organizations can save time, money, and effort. DIRO offers a range of verification solutions that can be used for:


Age Verification: Use Cases, Regulations, and Guidelines

Digital age verification is crucial in this day and age. So in this article, we will talk about how age verification works, different rules and regulations, and minor protection in different parts of the world. Almost everyone can get easy access to digital products and services. According to a survey in 2015, almost 1.46 billion consumers purchased goods over the internet. This number increased drastically by 46% since 2021. This can be credited to the COVID-19 Pandemic. In the current situation of the world, more and more people love to purchase products online. While the rising number of online customers is great for online businesses, it also creates challenges.

Today, minors can easily get access to age-restricted content from all over the internet. Unlike the offline world, where minors can’t get access to alcohol or tobacco, buying goods online is completely different. According to research, more than 1 million minors fell prey to ID theft in 2017, which resulted in a $2.6 billion loss.

What Is Online Age Verification?

Online age verification is a process to protect individuals and audiences from consuming non-age-appropriate content. Merchants of age-restricted products need to take responsibility to sell their services only to people over their age. For online businesses, it is essential to understand the age of their users, and digital age verification is a great way to get around it. It is a safe way for minors to perform online activities, and maintain regulatory compliance.

Digital Age Verification vs Manual Age Verification

Since the inception of adult-based services, verifying your age has become a common practice. Tobacco and alcohol stores don’t allow minors to purchase and consume these products. According to regulations by the Food and Drug Administration (DSA), the minimum age for buying and selling tobacco products is 18. These laws can perfectly work in offline stores as there is someone available physically to verify age. When it comes to online stores, verifying the age of an individual becomes challenging. 

So, it makes sense that minor protection rules should also apply to digital businesses. Digital business vendors often just ask for usernames and passwords to protect the users. There’s a huge need for verifying the age of minors before they interact with these platforms. Fortunately, just recently there have been huge developments in the online age verification methods. 

Compared to a couple of years ago, verifying an individual’s age has become relatively easier by relying on biometrics technology. There are several age verification systems available today that rely on AI and Machine learning to smartly identify if the individual behind the screen is minor or grown-up.

How does Digital Age Verification Work?

Age verification helps businesses onboard legitimate customers and prevent minors from using age-restricted processes. Here’s how most age verification processes work:

1. Submit the Date of Birth

The user has to submit date of birth information including date of birth using an online form as provided by the vendor. 

2. Upload Documents

Users upload date of birth documents that are issued by the government. These include documents such as ID documents, driving licenses, or passports.

3. Verification Process

Based on the information provided by the users, businesses verify the age of the users. This happens by using a document verification solution or an online ID verification solution. Based on this verification, the end-user is verified and declined.

Global Age Verification Guidelines

Different geographical locations have different guidelines when it comes to age verification. If there’s one thing similar about all the guidelines, it’s that all of them focus on parental controls. The main purpose is to make parents aware of appropriate services for their children and obtain consent for the children to use these services. 

1. Age Verification in UK

The UK government made some changes in 2017, to make sure that a country is a safe place for children. Following that, some changes have been made to the laws to limit easy access to age-restricted products and services. 

The online age verification provider, interactiveAgeCheck (iAC) is responsible for minor protection. This is backed by CitizenCard, UK’s biggest photo-ID and age verifier organization. It thoroughly considers recommendations made by the UK Council on Child internet safety.

2. Age Verification in Europe

The GDPR (General Data Protection Regulation) is issued by the European Union and applies to the citizens living in EU states. It has a complete set of rules and guidelines for the collection of personal data. This information includes biometrics, health, and genetic information. The GDPR’s Article 8 allows the age of consent to be anywhere between 13-16. This suggests that anyone over the age of 16 in the EU is allowed to consume age-restricted products and services. 

3. Age Verification in USA

The Federal Trade Commission’s minor protection law is named COPPA. It’s one of the most impressive and crucial minor protection laws in the USA. The rule book outlines how companies should collect and verify information related to children under 13. complying with these regulations doesn’t just include age-restricted content warnings, or integrating an age verifier.

The Cellular Telecommunications and Internet Association issued guidelines on restricting career content not suitable for younger audiences. It outlines different content rating standards so that the parents are aware of the type of content suitable for their children. By using internet access control offered by major internet carriers, consumers can limit access to specific websites using filters or block certain websites. 

4. Age Verification in Australia

The Australian Communications and Media Authority (AMCA) put out a new guideline in 2008 to prohibit minors’ access to age-restricted content. These regulations apply to anything aired in Australian media or hosted on TV channels within the country. The broadcasting Services Act of 1992 played a vital role in the development of these frameworks. 

For every content rating group, these rules offer a different set of customer verification, the MA15+ guidelines require:

  • A warning message that the content is MA 15+
  • Safety information for parents to protect their children who are below 15

The RA18+ guidelines contain rules regarding:

  • Warning about the risk of using proof of age by another person or someone who’s not eligible based on their age
  • Consider which evidence is provided, and how it’s presented

Risks of Not Completing Age Verification Checks

There are some risks of not having the age verification methods. These include non-compliance and a drop in market reputation for offline and online businesses at the same time. Generally, the perceived level of risks involved figures out the level of control and application of the regulatory framework.

Here are some risks of not having proper age verification mechanisms in your process:

1. Compromised Market Reputation

Building a great business requires providing customers with the best customer experiences. User satisfaction is crucial in building loyalty for customers and building a good reputation for your brand. Not investing in age verification software can hurt your business by having a negative brand image. Not having a proper age verification process can lead to easy access to age-restricted products and services, it puts minors more at risk. 

2. Non-Compliance fines

All kinds of vendors and organizations have to comply with GDPR, regardless of the type of products and services they offer. The purpose of this regulation is to maintain privacy and secure record-keeping. These regulations are equally important while verifying the age of individuals during onboarding processes. Non-compliance with GDPR can lead to hefty fines for businesses. 

Till 2016, non-compliance fines for COPPA were 160,000, which were later increased to 43,280 dollars.

3. Financial Losses

Online businesses can reduce fraud in chargebacks by parents for non-consenting transactions. Having an age identifier or verification process integrated into your onboarding process can help in reducing financial losses. 

Conclusion: Importance of Age Verification

In the end, the age verification process is crucial to protect the young generation from the adverse effects of age-restricted products and services. Merchants have to take on the social responsibility to secure minors and restrict their access.

General Verification

What is Signature Verification?

The widespread use of digital signatures has raised tons of questions. Most of these questions are related to user security. Numerous individuals and businesses see the benefit of transitioning from the traditional method of signing documents. The traditional method requires printing, scanning, hand-signing, and re-scanning of the documents and they are a huge security threat. Overall, they’re unsure how the digital signature verification process works.

The solution is to remove the mystery regarding the digital signature verification process.

How do Digital Signatures Work?

The terms digital signature and electronic signature are often used interchangeably, but they are very different from each other. The first point is understanding the difference between electronic and digital signatures. Digital signatures are a type of highly secure electronic signature, and they have a robust verification process.

eSignature or Electronic signature on the other hand refers to any virtual mark (Like an image file) that is included in a document to signify approval. Digital signatures work by leveraging an encrypted system that is based on a standard technological framework called Public Key Infrastructure (PKI). Certified authorities provide individuals with a digital certificate, which is stored by them mostly on a USB stick. 

Whenever the individual wants to sign a new document, they’ll have to attach their digital signature to the document using special software. An encrypted “hash” that is specific to that document is then created. The individual that’s sending the document then has to match the digital hash with a public digital certificate, in turn verifying the signature. 

Most digital signature providers use a mathematical algorithm to generate digital signature keys. 

  • Public key
  • Private key

Whenever a signer digitally signs a document, a new cryptographic hash is created for the document. This is done to verify the authenticity and integrity of the document. The recipient of the digital document can decrypt the encrypted hash by using the sender’s public key certificate. Once that is done, a new cryptographic hash is created from the receiver’s end.

While verifying digital signatures, both the cryptographic hash are compared to check their authenticity. If the hashes match, the document is original and it hasn’t been tampered with.

The Role of Digital Signatures

Over time, digital signatures have become a norm for all businesses. In many regions, including parts of North America, the European Union, and APAC, digital signatures are considered legally binding and they hold the same value as traditional document signatures.

In addition to digital document signing, they’re also used for financial transactions, email service providers, and software distribution. Digital signatures are crucial in specific industries where authenticity and integrity of digital identity are important. 

Industry-standard technology known as public key infrastructure makes sure to authenticate a digital signature is valid.

Why Should You Use PKI or PGP with Digital Signatures?

Using digital signatures that are supported by PKI or PGP improves their strength and significantly reduces the possibility of security threats. You can reduce security issues that often come along with transmitting public keys, by simply verifying that the key belongs to the sender, and verifying the identity of the sender. Verifying the identity of the sender is crucial when you’re dealing with a digital signature.

The level of security of the digital signature is completely dependent on how secure the private key is. Without PGP or PKI, proving someone’s identity or revoking a compromised key is next to impossible. If the private key is not well protected, it could allow malicious actors to assume the identity of someone else and go through the process without proper verification.

By relying on third-party verification services, businesses and individuals can verify digital signatures. This can ensure that the digital signatures are not being used by someone who doesn’t have the authority.

As paperless, and online transactions are growing day by day, the use of digital signatures can help you protect and secure the integrity of your data. By understanding and using digital signatures, you can protect yourself, the information you share, confidential documents, and transactions. 

How are Electronic Signature Verified?

And how are electronic signatures verified? Numerous legislation like the ESIGN (The Electronic Signature in Global and National Commerce Act), UETA (The Uniform Electronic Transactions Act), and eIDAS (Electronic Identification, Authentication and trust Services) offer the validity of electronic signatures. 

The process for verifying electronic signatures is a lot similar to traditional methods that are used to verify physical pen and ink signatures. Verification is essentially about proving an electronic signature was made by the intended signee by verifying the data, location, and time of the signature. This helps in ensuring that the document wasn’t tampered with. 


Use of Biometrics for Improved Onboarding Experience

The pandemic has changed a lot of ways we do basic activities. The retail space, banking, education, hospitality, and several other industries took the brunt of the pandemic. Fortunately, the reliance on technology improved how we used to do basic activities. These technologies have specifically increased the efficiency of customer onboarding and employee onboarding. So, instead of using physical documents and in-person verification, digital onboarding methods are being used.

Many banks are now generating lower levels of revenue, with some banks reporting a decline as low as 70% from the year before the pandemic. Many banks had to lay off employees and permanently close some of their branches. Banks that have stayed open have adopted new technologies and shifted their day-to-day operations around the technologies available to them. Customer onboarding, ID verification, customer authentication, and other processes all became digital.

While the digital transformation was already underway in the banking sector, the pandemic pushed the transformation into overdrive. Evolving customer expectations, growing FinTechs, and changing regulations around technologies are also helping in speeding up the digital transformation process. By implementing digital ID and document verification solutions, banks can improve the onboarding experience while managing fraud.

Utilizing Biometrics Technologies in Banking

Every person in the world has a unique set of fingerprints and unique hand geometry. Biometric identity verification systems examine these and other biometrics identifiers to identify individuals. The utilization of these systems improves security, speeds up the verification process, and prevents cybercriminals.

In this socially-distanced economy that we’re currently living in, cyber attacks are becoming more prevalent and sophisticated. Fake identities and synthetic identities are on the rise which makes it harder for banks to detect fraud. Almost half of U.S. consumers have experienced some kind of ID theft in the last two years, more than 37% of people have experienced application fraud, and almost 40% of consumers have experienced account takeover fraud.

But it’s not always easy to implement these new methods, and banks have to follow strict compliance standards they have to follow during customer onboarding, which can make it difficult to find a one-stop solution for all kinds of consumers. They need solutions that comply with digital privacy guidelines and updated financial regulations. They also have to make sure that the onboarding experience isn’t too difficult or time-consuming for consumers. Luckily, consumer opinion regarding new technology is changing, which means the adoption of these technologies can be easy.

Use of Biometrics for Customer Onboarding

Biometrics is the most reliable way of authenticating identities and it’s a great method of preventing ID theft and spoofing. Banks know that the use of biometric verification can be helpful as they were the first industry to use them. Banks are now also relying on facial biometrics as multi-factor authentication. This is because facial recognition does not require customers to be physically present at the branch, because of fingerprint scanners, palm scanners, and iris scanners. 

Banks all over the world are using layers and layers of biometrics technologies in their daily operations. Banks are now discovering that they can use facial biometric verification since the beginning of customer relationships. This reduces complications for a customer, alleviating the pressure to remember a confusing PIN or token. Using biometrics across banking makes transactions more secure and overall increases security. Moreover, it boosts operational efficiency, all the while making the experience easier for the customers.

Use of Biometrics for Employee Onboarding

As more and more employees are working remotely because of the pandemic, that’s why securing the employee onboarding process is as important as customer onboarding. Employee security breaches are a big concern for all large organizations that deal in sensitive data of any kind. Having a biometric in the employee onboarding process is quite similar to customer onboarding.

Employee-owned smartphones are loaded with a mobile app that initiates their enrollment into your business. Or companies can build a custom employee onboarding program by combining online document verification services and biometric verification. 

Digital Transformation Across Industries

Before the Covid-19 pandemic changed the world, retail banks and credit unions completely relied on manual onboarding processes. This clumsy process was time-consuming, inefficient, and insecure. Collecting identity information can be laborious and waiting for the information to be verified can take even longer, thus making the process inefficient.

Online onboarding technologies verify customer identities by comparing customer photos and IDs. And verify online documents such as utility documents, bank statements, and other documents. This improves the user experience and reduces abandonment rates. Plus it can be done remotely, without customers needing to stand in big lines and it also reduces the document handling costs for banks and other businesses.