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Fighting off fraud attacks with Sumsub ID verification technology

What is Sumsub?

Sumsub is an international startup to help companies onboard new clients online and adhere to AML/KYC regulations using its AI-driven identity verification tools. Sumsub technology is aimed to fight fraud attacks and make the identity verification process, fast, secure, and transparent for clients.

Current industry landscape

In 2020 many businesses had to go online due to the Covid-2019 hit and related restrictions. But with the spread of online business activities, the number of Internet scamming practices, as well as their level of sophistication, also increased, threatening the well-being and security of millions of people and companies. First of all, fake vaccination passports which are illegally sold online have become more popular as a response to the new reality challenges: you have to show your vaccination pass for entering a public space or going to vacation. To fight that we developed a verification solution that can verify the vaccine passport. We collected all international passports and Sumsub's algorithms can identify fakes easily.

What is more, during the pandemic many households’ income fell dramatically. As a result, more fraudulent attempts were made by ordinary people. According to Sumsub analytics, 65% of recent scams are easily recognizable. Still, 35% of online fraud require more careful examination or special tools to detect. Fake ID documents remain the most popular type of scam. For example, fraudsters make a physical copy or add graphic edits to an existing ID card or driver license. In order to ensure ID authenticity are being developed effective instruments such as anti-photoshop check and security features check. The solution analyzes various parameters of the submitted documents to identify fraud and filter out suspicious users. Online scammers also try to spoof biometric verification systems by showing a passport photo instead of a person’s face or by wearing a 3D mask.

Another type of fraud is manipulating users directly, or the so-called social engineering. For example, attackers can find out when people look for jobs and send them interview invitations to major, well-known companies such as Microsoft and Apple. Victims follow phishing links that grant the attacker access to their devices or submit their data through a questionnaire that looks like an HR website but is in fact a payment system.

Financial security is of the utmost importance to the activities of all companies. As the modern world economy is unstable, and businesses are constantly facing new threats, the need for adequate financial security management systems is becoming more and more important. The most effective ways to fight monetary fraud entail organizations that can qualitatively verify the users in accordance with applicable law and provide reports on the checks made at the request of the regulator or partner bank.

Fintech, mobility, the sharing economy, gaming, and other online services require fast, accurate, and automated online identification systems. Those services all compete for their users, so their quality, reliability and speed give them an edge on the market and increase profitability. Onboarding is an important component of the user experience that determines whether the user will continue to use the service or uninstall this application.. Meanwhile, only a few platforms fulfil all three requirements: most services either provide poor verification, skipping everyone in a row or do good compliance or anti-fraud work, but cut off the number of honest users, who are not so motivated to undergo difficult verification.

Many providers only provide a technical solution that customers need to modify according to their processes. With this approach, customers also have to independently examine the laws and regulations in different countries and assess the risks. It's expensive, time-consuming, and unsafe without the necessary preparations.

Confidence among users is another important element. Fraud and personal data leaks severely undermine the reputation of companies and reduce the credibility of consumers and investors. Protecting noncash payments from fraudulent activity begins with data protection. Scammers, for example, can infiltrate the marketplace using another's data. Alternatively, they may start using the financial service by using fake identities and cards, and later ask the bank for a refund (chargeback) since they "did not make a payment." Unless the company has measures to prevent such threats or prove the identity of the payer, it could suffer huge losses.

According to McKinsey, the financial sector is the main driver of identity verification services (about 28%). This market is estimated to grow to € 20 billion by 2022. Telecommunications, retail, and cryptocurrency together represent 28% of the company's target market in addition to financial services. In CB Insight's statistics, the financial services market is a fast-growing sector, with a volume of $34.5 billion based on 1,913 concluded deals. In addition, more and more people use financial services on a daily basis. As of 2020, 69% of the world's adult population (3.8 billion people) will have a personal bank account. In 2011, 51% of the population used financial services, in 2014 - 62%. Other markets may be interested in checking counterparties: gaming, trade, market, and B2B.

Sumsub's competitors include Onfido, Jumio, Trulioo, Au10tix, Veriff, Passbase, Comply Advantage and Indow

Why Sumsub was created

Back in 2015, a lot of online fraud was going unnoticed, particularly in the car insurance sphere. Fraudsters would photoshop damages on newly purchased cars and then file claims on these fake damages. This scheme was fairly successful--and it was costing insurers thousands of dollars at a time. Back then, Sumsub was already building neural networks and saw an opportunity to address this growing online fraud problem. So, Sumsub built its own anti-photoshop technology with the aim of helping companies accurately detect fake claims (and kick criminals out of the market for good). Its anti-photoshop tool gained a lot of attention and positive feedback. Eventually, platforms started to rely on them as a source of peace and security. The founders were inspired to go further down the anti-fraud and identity verification path. As their clientele expanded, Sumsub needed to expand and change according to their needs. They hired a team of industry experts and developed dozens of new features - all with aim of building Sumsub's existing anti-photoshop technology into a more powerful product.

Sumsub's mission

Sumsub is an international startup to help companies onboard new clients online and adhere to AML/KYC regulations using its AI-driven identity verification tools. It was founded by three brothers Andrey, Jacob and Peter Sever. Sumsub technology is aimed to fight fraud attacks and make the identity verification process, fast, secure, and transparent for clients. The startup business model is based on verification & identification services adjusted to global compliance. Wide legal expertise allows them to be a leader company as they provide at the same time the set of different regulatory requirements for more than 220 countries and almost any language.

The Sumsub team developed an all-in-one customized solution that permits to operate verification remotely and without tech support. Its solution helps to scale faster business to international markets and to adjust it to international compliance more efficient.

Their anti-fraud forensic software is based on machine learning algorithms and analyzed fraud patterns for clients. Its customizable user-friendly platform is globally applicable and offers a wide range of solutions from fully automated identity verification to semi-automated and agent-assisted verification. Sumsub’s approach and methodology are designed according to the FATF recommendations regarding AML and CTF requirements, which serves as the international basis for local AML laws. The system is based on a risk-based approach and follows global and local regulatory norms (FATF, FINMA, FCA, CySEC, MAS). All the data is being kept in Amazon GDPR compliant servers, which are in the EU. Overall responsibility for all data lies on the DPO (Data Protection Officer).

As a solution, Sumsub covers a much broader range of customer needs. Existing solutions could only target one problem--be it KYC, KYB, crypto compliance, liveness, or legal & compliance support. This meant to adopt a separate solution for each challenge, which is simply inconvenient and costly. Sumsub set out to build an all-in-one solution, covering all identity verification and anti-fraud needs. Sumsub values communication and support above all what makes them stand out from other companies in the field. Sumsub aims to create a world without digital fraud and money laundering.

They help companies to minimize their security risks and protects people's identities from different types of fraud.

A quote from the founder

“Let your customer lead you to what they actually need. Once you carefully observe the market, you will recognize the areas where businesses struggle the most. Only then will you be able to deliver maximum value. From the very beginning, I knew that our solution was aimed at getting our clients out of misery. Over time, we learned that this specifically meant eliminating regulatory headaches and fraud concerns. And as we tackled these challenges, our clients were able to focus on growth”, says Jacob Sever, Founder & CPO.

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