WASHINGTON D.C. – The financial underworld is increasingly digital, and with it, so is the fraud. The Federal Deposit Insurance Corporation (FDIC) and the Financial Crimes Enforcement Network (FinCEN) are fighting back, not with raids and arrests – yet – but with a recent “Tech Sprint” aimed at bolstering digital identity proofing. The goal: to cut down on the flood of synthetic identities, compromised personal information, and the money laundering that fuels it all.
Nearly 60 experts from over 200 applicants battled it out, forming eight teams to present solutions to a panel of government judges. The stakes? Finding a way to reliably verify who’s actually opening accounts online, before illicit funds flow through the system. The current patchwork of identity verification methods is clearly failing, leaving banks and customers vulnerable. “Helping financial institutions to stop identity fraud will help us to continue to have confidence in the safety and soundness of our banks and the integrity of the U.S. banking system,” stated Martin Henning, FDIC’s Deputy Director, Operational Risk.
The challenge posed to these teams was blunt: “What is a scalable, cost–efficient, risk–based solution to measure the effectiveness of digital identity proofing to ensure that individuals who remotely present themselves for financial activities are who they claim to be?” It’s a deceptively simple question with immensely complex implications. Compromised Personally Identifiable Information (PII) is rampant, and fraudsters are getting increasingly sophisticated. FinCEN’s Acting Director, Him Das, underscored the importance, stating, “Identity is a fundamental cornerstone of financial integrity, and identity proofing is precisely the type of complex issue that benefits from public–private collaborations like this Tech Sprint.”
Three teams were singled out for their innovative approaches. Team “ConfIDence,” comprised of Dakota Clum (Bonifii), Nancy Guglielmo (Bank Policy Institute), Elizabeth Cronan (GeoComply), Tracy Manning (LexisNexis Risk Solutions), Michael Engle (1Kosmos), Vadim Slavin (GlobalID), and Candler Eve (MidFirst Bank), earned recognition for their creativity. Team “Heimdall” – Patrick Curry (Sedicii Innovations Ltd.), Stephen Ritter (Mitek), Casey Jennings (Seward & Kissel LLP), Greg Woolf (FiVerity, Inc.), Rob Leslie (Sedicii Innovations Ltd.), Lisa Zeimetz (First National Bank & Trust Co.), and Ryan Rodrigue (Wolf & Company, P.C.) – was lauded for its potential effectiveness and impact. Finally, Team “Six” – Daniel Buchner (Block), Megan Monroe (Block), Holly Kramer (Splunk), Bruce Silcoff (Shyft Network Inc.), Timothy Madore (HSBC North America), Jessica Winchell (Credit First National Assn.), and Jay Meier (FaceTec, Inc.) – received accolades for its market readiness.
While this Tech Sprint doesn’t result in immediate arrests or asset seizures, it represents a crucial step in the ongoing arms race against financial crime. The FDIC and FinCEN are clearly signaling they’re willing to explore new technologies – and collaborate with the private sector – to stay ahead of the fraudsters. The full report detailing the findings of the Tech Sprint, “Measuring the Effectiveness of Digital Identity Proofing for Digital Financial Services,” is available for review.
Contact: Brian Sullivan, FDIC, 202-412-1436; Jayna Desai, FDIC, 703-905-3770. Last Updated: April 5, 2022. The Grimy Times will continue to monitor developments in this case and report on any resulting enforcement actions.
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