Task force encourages robust digital ID for remote banking as Aadhaar payment service promoted

The Financial Action Task Force (FATF) says in a new guidance paper that digital ID systems with appropriate risk mitigation mechanisms in place can provide a lower level of risk for mobile customer identification and transactions than face-to-face interactions, RiskScreen reports.

“Reliable digital ID can make it easier, cheaper and more secure to identify individuals in the financial sector,” the FATF guidance paper says. “It can also help with transaction monitoring requirements and minimise weaknesses in human control measures.”

The paper is intended to provide guidance for how to decide if a digital ID system meets FATF’s requirements for customer due diligence, and also notes that digital ID systems can be used to onboard customers for greater financial inclusion.

One such scheme is the Aadhaar-enabled Payment System (AePS), and the Vellore Head Post Office in Tamil Nadu, India, recently held an awareness drive to demonstrate the benefits of the system, including for people in rural and hilly areas, The Hindu writes.

Aadhaar-holders can register for AePS through postal branches or with postal workers carrying electronic devices, with fingerprint identity verification.

Cash depositing will soon be available through the system, according to the report.

Plans to provide AePS to rural residents in Kerala through postal workers acting as “mobile ATMs” were announced last September.

Article Topics

Aadhaar  |  banking  |  biometrics  |  digital identity  |  identity verification  |  risk mitigation  |  secure transactions