The recent Privacy Act Review by the Australian government is poised to have a notable effect on the financial services sector, especially regarding how they verify customers under the KYC/AML (Know Your Customer / Anti-Money Laundering) mandates.
Nathan Kerr the Chief Technology Officer at One Click Verify, a provider of identity verification solutions to the financial services industry, has assessed the report and analysed its possible implications for financial services providers, with the following quick update and more to follow.
One of the most important suggestions in the report is to create a new privacy principle that focuses on how to handle personal information, especially when collecting and using sensitive information. This will require financial services providers to be more forthcoming about how they gather, use, and safeguard customer data and ensure their practices align with privacy and cyber security risks (Proposal 11.1, 21.3 and 21.6).
Regarding KYC/AML programs, this implies that financial services providers will need to be more thorough in their identity verification procedures, especially when collecting and storing sensitive personal information. They will also need to furnish clear and concise information to customers about how their personal information is being used and acquire their consent before collecting and storing any sensitive data (Proposal 18.1).
Another significant recommendation of the report is the introduction of a new enforcement regime that empowers the Privacy Commissioner to impose substantial penalties on organisations that contravene the Privacy Act. Therefore, financial services providers will need to guarantee that they have resilient privacy policies and procedures in place, and that they regularly review and update them to ensure compliance with the new regime (Proposal 25).
Overall, the Privacy Act Review is set to have a substantial influence on the financial services industry, particularly regarding how they verify customers under the KYC/AML requirements. Financial services providers will need to be more transparent about their data collection and usage practices and ensure that they have robust privacy policies and procedures in place to evade penalties for non-compliance. As the Chief Technology Officer at One Click Verify, we are committed to providing solutions that aid our clients in complying with these new requirements and maintaining the trust of their customers.
Further insights and recommendations on the specific issues that will affect the financial services industry as a result of the Privacy Act Review will be shared via the One Click Verify blog. Follow us on LinkedIn to find out about the latest developments and insights in the identity verification space. As always, we are committed to providing our clients with the most effective and compliant solutions to meet their KYC/AML requirements.