some pain points that companies or even users experience? - What would a comprehensive end to end solution look like for Japanese companies? 2022-03-27
eKYC” 1. eKYC implies many concepts and variation depending if it’s applied to individual or corporate. We will focus on individual for this assignment 2. eKYC for individual can be split into 2 usages: Identify veri fi cation used for example to new service registration and allow transparent on-going veri fi cation (will be the focus for the assignment) Authenti fi cation to validate access to restricted services (or areas) when required 3. Identi fi cation veri fi cation can be roughly spit into 2 steps: - Identity check using of fi cial documents and photos - Background check during both the on-boarding and the on-going
forecast” • eKYC was “kicked-off” when the Prevention of Transfer of Criminal Proceeds law was voted by the end of 2018 and was enforced in 2020 • since the summer of 2020, there have been a number of cases of fraudulent withdrawals due to inadequate identity veri fi cation at the time of account opening, which has increased the need for eKYC solutions as a means of immediate and reliable identity veri fi cation. • Figure shows the sales of the projected eKYC solution in the Japanese market made in 2020 and published on 2021 • With the booming of cashless and crypto, it won’t be a surprise if those projections will be below reality. Source: nikkei from data projection of ITR consulting. Currency was converted from Billion JPY to Million USD (100 JPY = 0,80 USD)
of eKYC” Key points of study held by the Mobile Marketing Data Labo on a panel of 500 Japanese users who answered online and published on 202109-06— (source). All used eKYC at least once. • 85.2% of eKYC users said they would like to use eKYC next time and thereafter (among them, 65.7%. "because it could be completed online”) • 14,6% won’t and the main reason they gave is they are ”I am worried about data storage” • Survey shows among the top 3 most used usage of eKYC, 2 of them is related to cashless solution…which is quite a paradigm shift in Japan!
as a Service” • "eKYC as a service" are companies that, throughout integration, offer “eKYC individual on-boarding/on-going” capabilities to 3rd parts (similar to advance.ai) • According to a study of Trustdock (one of the leaders in Japan), there are close to 18 companies that provides “eKYC as a service” • Many of those companies have already an existing core business (mobile operator, retail banking, conglomerate, popular chat system…etc..) • Some outliers in this list are SMEs to be considered as “eKYC service native”, such as Trusdock. • No Foreign brands
on “Trustdock” site web in English (Japanese one is better) • Trustdock is a Japanese SME which has executed the brillant basics where it comes to digital marketing and digital presence. • The company appears among the fi rst results when googling ekyc (google Japan) • They are penetrating CRMs with eKYC integration with salesforce • They received relevant reward regarding eKYC integration from 3rd parti • The overcame lots of issue when it comes to compliance and enabled their platform to be integrated with state IDs such as “My Number card”
for crypto • eKYC is happening for crypto (especially crypto assets since some of them shall be considered as securities and are therefore regulated) • KPGM ignite in Japan are implementing their eKYC approach to crypto throughout a proprietary platform (now in “phase 2”) Web site presenting the eKYC for crypto
1 • Regardless of the amount, for most Japanese banks, when you receive funds from oversea you are requested by the bank clerk to: • Con fi rm if the money received is not connected in any way to North korea, Iran (and I guess soon Russia) • To Give a description of the reason of this transfer • To Give an explanation if there’s a high variation between 2 transfers The funds are blocked until you take the call…
2 • Implementation of eKYC for individual is missing in some cases, the “brillant basics” in terms of implementation • In this video, a youtuber had to take a picture of himself AND his ID at the same time to validate the eKYC process • He tried 15 times and failed (in all good faith!) • The reason is the application cut his face in half most of the time or he was hiding by mistake the number of his license with his fi ngers • He concluded it was easier and faster to go to the local shop to complete the process… Video link
3 • Mizuho’s services (3rd retail bank in Japan) were literally “out of order” 5 times in 2021 with multiple glitches in 2022. • The reason is quite common in IT Finance in Japan: Mega bank lost their IT system governability since it relies on outdated systems and maintained by “hacks” made by successive generation of engineers. • Google has been mandated to drive the digital transformation of the bank in March 2022 (ref in English: https://www.youtube.com/watch?v=TsIfJlPosPE)
Digital Transformation plan "Living in Japan is great, digital transformation isn't" (Everyone, 2000-present) • eKYC is closely tied to Digital transformation (abbreviated in Japan by “DX”) when it comes to integration with the fi nancial industry… something that traditional Japanese IT companies are basically failing at. • It is becoming less and less uncommon to see local Japanese companies partnering with foreign ones for driving Digital transformation strategy and execution • End to end solution requires to be equipped with • tangible case studies (with clients ambassador) • Success data • endorsement from various legal and governmental entities • Local and bilingual presence to handle technical and operations meetings • A network of local integrators • Embed regulations -> in short use Trustdock as a benchmark (especially this case study)
everyday life • Legal age has been lowered from 20 to 18 since 2022 in Japan • eKyc will be needed beyond banking: buying alcool from the Internet is one example (screenshot of a site on the left) • eKYC’s deployment is being done in airports in Japan (ex: Kansai International Airport which is close to Osaka and will likely spread out to other verticals • eKYC as a label to trust crypto projects You must be 20 Yes
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