23.01.2020

Anti-money laundering and Counter Terrorist Financing system in modern fintech industry

The implementation of technologies usually comes with some difficulties in its practical usage such as discrepancy about international law for regulations, security etc. The panelists discuss week points in automatization and what specialists need to work on to provide global safety in digital world.
The moderator: Hans Schwab. Speakers: Prof. Dr. Bryan Ford, Andrew Howard, Pratibha Jain, Igor Data.
Andrew Howard, CEO, Kudelski Seсurity states that the usage of DOT in anti-money laundering has some positive aspects such as transparency, the ability to remove information disadvantage between the parties, enable huge process automatization working in financial transactions. Technologies have a lot of gaps and its actual implementation and actual reality are not the same.

Andrew mentions that it is difficult for regulators and technologies to keep up with all currencies that exist now and integrate them.

Pratibha Jain, Founding Partner, Head of the Delhi office of Nishith Desai Associates, India reminds the audience that fin-tech concept is overly broad including digital banking, digital landing, digital insurance, payment systems.

Anti-money laundering and counter terrorist financing system is significant aspect not only for national security, but also for economic growth in India. There are extremely strict regulations that hamper money movement from one country to another. Thus, there is no differentiation between small and big amounts, and it impedes developing this sphere.

Pratibha mentions US jurisdiction that is the only one where principle base approach of low making is used. Before dealing with crypto currency, Indian banks advice organizations to start with self-regulations and crypto standards.

Magdalena Boskic, Head of Compliance Crypto Finance AG speaks about myths and wrong perceptions of digital assets. When it comes to crypto currency and blockchain we can see every transaction which is immensely helpful for detecting criminal activities. Education is the only way to get rid of wrong understanding of these technologies. Nowadays the biggest challenge for businesses is the regulatory dynamics including many laws and regulations which are difficult to follow in cross border interaction.

She adds that law is never as fast as the development of technologies. Start-ups are not only to innovate, but also to drive and inspire further developments of regulatory.

Igor Data, CDO, Integral Petroleum SA, Geneva, Switzerland describes blockchain as a transparent system, but as the same time as hidden transactions where it is difficult to understand who the payers and receivers are. Also, Igor agrees with the speakers about the lack of standard regulations for all countries. He thinks that communities can regulate themselves trying not to mix clean money with dirty

Prof. Dr. Bryan Ford, Head of the Decentralized/Distributed Systems (DEDIS) lab, EPFL, Switzerland talks about weakest-link security, pointing that the more data and connectivity, the less security is. Information security requires three main properties such as confidentiality, availability and integrity. It is mentioned that blockchains strengthen Integrity and availability, but replicating data weakens confidentiality. Speaking about crypto currency the professor claims that there are many ways in principle to achieve strong privacy together with accountability, excluding "either-or" concept. To make crypto currency governable and truly resistible to misuse, we need to give it broad-based accountability to real people. Here the problems arise where it is difficult to distinguish real person from fake account.ID card checking is considered to be dead end nowadays.

The moderator: Hans Schwab. Speakers: Prof. Dr. Bryan Ford, Andrew Howard, Pratibha Jain, Igor Data.
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