The Trust Edition - December 2024
?? Welcome to our December issue of The Trust Edition!
This month, Klarna's been hit with a hefty fine, Vietnam's social media users brace themselves for strict identity verification rules, and Face ID farming is on the rise.
??As 2024 comes to an end, we’re proud to share some of ComplyCube's key achievements this year as we continue to strengthen our commitment to innovation, security, and inclusion.
Industry Highlights
?? Klarna Hit With ￡35M Fine After Breaking AML Rules
Klarna, the Swedish Buy Now, Pay Later (BNPL) company, has been fined over ￡35 million (500 million Swedish kronor) by Sweden's Financial Supervisory Authority (FI) for violating anti-money laundering (AML) regulations.
The fine stems from "significant deficiencies" in Klarna's risk controls during a review of its operations between April 1, 2021, and March 31, 2022. FI found that Klarna had failed to properly assess the risk of its products being used for money laundering or terrorist financing, and lacked adequate procedures for due diligence, particularly for customers using its invoice product.
Daniel Barr, Director General at Sweden's Financial Supervisory Authority (FI), stated:
“The anti-money laundering regulations must be followed. It is important to counteract the risk that the firm's operations could be used by criminals. Klarna has not followed the requirements on, among other things, a general risk assessment and procedures and guidelines for due diligence measures."
Although Klarna was found in violation of key AML rules, the Swedish regulator did not deem the infractions severe enough to issue a warning or revoke its authorization. In response, Klarna clarified that the fine resulted from a routine review, not from actual money laundering incidents, and emphasised its commitment to maintaining a secure financial environment.
The Klarna fine highlights the growing attention regulators are placing on the BNPL sector. With providers such as Klarna experiencing rapid growth, regulators are likely to introduce stricter oversight to ensure financial products don’t inadvertently facilitate money laundering or other financial crimes. The AML deficiencies uncovered during the review may lead to broader industry-wide regulations, prompting BNPL providers to strengthen their internal compliance frameworks.
Find more information on Klarna’s AML fine here.
???? Vietnam’s New Internet Rules Require Identity Verification for Social Media Users
Vietnam’s strict new internet rules—known as Decree 147—are now in effect. The decree mandates that major social media platforms like Facebook and TikTok require users to verify their identities before using the services.
??This move aims to curb online misinformation, cybercrime, and harmful content by ensuring that users are accountable for their actions online. The government is also pushing for more stringent control over content shared on these platforms, putting more pressure on social media giants to comply with local regulations.For users, this means that social media accounts will now need to be linked to verified identities, a significant shift in how digital privacy and security are handled in the country.
However, critics are calling this an attack of freedom of expression. Vietnam's government is known for quickly suppressing opposition and detaining critics, particularly those who gain attention on social media platforms.
In October, blogger Duong Van Thai, who had nearly 120,000 followers on YouTube and frequently live-streamed content critical of the government, was sentenced to 12 years in prison for disseminating anti-state materials.
As the digital landscape continues to evolve, countries like Vietnam are tightening their grip on internet governance to ensure a safer, more regulated online environment.
Learn more on this story here.
?? FINTRAC Imposes USD 2.46 Million Fine on Exchange Bank of Canada for AML Non-Compliance
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has fined Exchange Bank of Canada USD 2.46 million for failing to comply with anti-money laundering (AML) regulations.
??The fine was imposed after FINTRAC found that the bank did not submit suspicious transaction reports despite having reasonable grounds to do so, failed to monitor ongoing business relationships effectively, and neglected to report cash transactions of USD 10,000 or more.
Exchange Bank of Canada has appealed the decision, although no further details have been released. The fine follows a similar USD 7.4 million penalty imposed on TD Bank earlier in 2024 for similar AML control deficiencies.
Learn more about this fine here.
??? Dark Web Face ID Fraud Warning: A Growing Threat
A recent Forbes article warns of a rising threat: Face ID farming. Hackers are collecting vast databases of stolen facial images from the dark web, using them to spoof biometric systems and bypass Face ID security. This new form of identity fraud poses a serious risk, enabling criminals to impersonate legitimate users and access sensitive accounts.
"If you are approached by anyone, knowingly from the dark web or, more likely not, offering you cold, hard cash in exchange for your image and copies of your identity documents, don’t do it. No matter how much the short-term incentive, it could just as quickly turn into a very costly mistake." ~ Forbes Magazine
It's critical for businesses to adopt multi-layered security strategies that combine facial recognition with additional methods like liveness detection and document verification. This will help protect businesses from these increasingly sophisticated attacks and ensure stronger defence against fraud.
Learn more here.
?? ComplyCube 2024: A Year of Milestones and Achievements
As we look back on an extraordinary year at ComplyCube, we’re proud to share the key accomplishments that have helped shape our growth, strengthen our global presence, and reinforce our commitment to innovation, security, and inclusion:
? Onboarded 95.6% of our clients’ global customer base in under 1 minute: Through the power of our cutting-edge technology and seamless onboarding process, we’ve significantly accelerated customer verification.
?? Prevented over $141M in potential money laundering attempts: By utilizing advanced AI and machine learning algorithms, ComplyCube has been at the forefront of fighting financial crime. Our solutions have helped detect and block millions of dollars in potentially illicit transactions, safeguarding businesses and their customers from fraudulent activities.
? Blocked over 92% of fraud attempts in real-time: With our proactive fraud detection capabilities, we’ve managed to block an impressive 92% of fraud attempts as they happen.
?? Received top awards for innovation, customer service, and tech excellence: Our commitment to pushing the boundaries of innovation has been recognized by multiple prestigious industry awards.
?? Maintained a flawless 100% uptime for our services throughout the year: Reliability is key to building trust, and we’re proud to report that ComplyCube has achieved 100% uptime for all our services.
?? Awarded 5 prestigious certifications including UK DIATF, ISO 9001, and PAD Level 2: We are proud to have earned five new certifications, including the UK DIATF, ISO 9001, and PAD Level 2.
?? Enabled over 4.5 million unbanked individuals to access financial services, promoting inclusion: At ComplyCube, financial inclusion is at the heart of what we do. This year, we’ve made it possible for over 4.5 million previously unbanked individuals to access essential financial services, empowering them with greater economic opportunities and helping bridge the digital divide.
?? Unveiled our new Trust Centre, showcasing our market-leading security and compliance posture: We believe that trust is the foundation of every successful digital interaction. That’s why we launched our new Trust Centre, which provides transparency into our security practices, compliance certifications, and ongoing efforts to protect our clients and their customers from emerging risks.
?? Launched several major features, hundreds of enhancements, and integrations: We’ve been relentlessly improving our platform to meet the evolving needs of our clients. This year, we introduced several new features, as well as hundreds of enhancements and integrations, allowing businesses to leverage our solutions more effectively in diverse and dynamic environments.
?? Built customised solutions, including integrations with the DVLA (UK) and AAMVA (US): In line with our commitment to providing tailored solutions, we’ve launched new integrations with key regulatory bodies such as the UK’s DVLA and the US’s AAMVA. These integrations provide our clients with seamless access to government-issued identity data, improving verification accuracy and streamlining compliance processes.
?? Verified millions of identities, safeguarding businesses and building digital trust on a global scale: Over the past year, ComplyCube has verified millions of identities globally, helping businesses to stay compliant while enhancing their security.
?? African Startup Conference
The ComplyCube team had the privilege of attending the African Startup Conference this month, where artificial intelligence (AI) was a key theme driving conversations about innovation and growth in Africa.
?? A standout moment for the team was participating in a panel discussion on the topic: “The Trust Factor: Driving Economic Growth in Africa and Algeria – FinTech, Postal Services, & Telcos as Catalysts for Change.”
From the exceptional venue, CIC Alger, to gaining valuable insights from African startup founders, the conference was deeply inspiring for the team. Next year, ComplyCube will return with an even stronger presence, showcasing our unwavering commitment to driving innovation and empowering growth across Africa. ??
??Read Tarek Nechma's full post on the event above.
?? Team Christmas Event
We wrapped up 2024 year with an inspiring team strategy session, followed by a celebratory team dinner in the heart of London. The enthusiasm, shared goals, and collective vision for 2025 were truly motivating.
Here’s to overcoming challenges, driving meaningful change, and reaching new milestones in the year ahead. ??
?? For more information on ComplyCube's range of services, including AML, KYC, and IDV solutions, contact one of our specialists and start a conversation today.