Financial crime—things like fraud, money laundering, and illegal fund transfers—is a growing problem that affects economies worldwide. While recent initiatives, like the UK ‘Financial Crime Intelligence Sharing Initiative’, signal progress, the tools and technology for detecting and preventing financial crime must evolve urgently to outpace increasingly sophisticated criminal networks. Corporate Digital Identity (CDI) is emerging as one of the most promising solutions in this space. CDI enables financial institutions to better verify corporate identities, identify beneficial ownership, and streamline due diligence, positioning it as a critical tool for financial crime prevention today.
CDI offers real benefits in today’s regulatory and business environment, as well as the scope to scale and evolve in line with new standards and regulatory requirements. By adopting CDI today, banks can ensure their financial crime processes are future-proof.
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Why corporate digital identity matters now
CDI is a digital profile of a business that includes important details like its legal name, certifications, ownership information, and other key data. This consolidated view offers financial institutions a stronger foundation for meeting regulatory requirements around Know Your Customer (KYC) and Anti-Money Laundering (AML). With CDI, financial institutions can streamline client verification processes, detect inconsistencies more effectively, and enhance the accuracy of risk assessments.
Without CDI, financial institutions struggle to consistently gather, maintain, and verify critical business identity data across regions, exposing them to greater risk. Every corporate client must be verified using accurate, up-to-date data, and CDI provides that data in a single, accessible format. This real-time insight is invaluable in today’s landscape, where the speed and efficiency of risk assessments are critical to preventing criminal activity before it escalates.
Creating data value through CDI
CDI helps banks improve how they manage data by breaking down barriers between different departments and systems. It brings together data from various sources, making sure it is consistent and accurate. This allows all teams within the bank to work with the same trusted information, which helps eliminate errors or confusion caused by conflicting data. CDI uses processes like normalising data and resolving inconsistencies to create a single, reliable source of required information.
By making data more organised and easier to access, CDI supports ongoing efforts to improve data management, which is a big focus for many banks today. It helps banks make better decisions based on accurate, up-to-date information. This also supports banks in complying with privacy and security regulations. With CDI, banks can use their data in a smarter way, improving efficiency across teams and supporting compliance with rules in a way that keeps customer information safe.
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By GlobalDataCDI – a practical solution for banks of today
CDI is a natural complement to the Client Lifecycle Management (CLM) platforms many banks have invested heavily in. CLMs require data, and a lot of it, if they are to deliver the return on investment expected. However, banks haven’t been able to support the integration of data sources to the scale required and these systems have not yet delivered the return expected. CDI solves this problem by bringing together and standardising data from different sources into a format that seamlessly integrates with existing platforms.
A major benefit of CDI is how easily it fits into banks’ existing technology systems. By integrating with CLM and CRM systems, CDI improves efficiency and ensures that customer data is up to date, consistent and accessible. By being technology-agnostic, CDI not only improves current processes but also sets the stage for future innovations, like perpetual KYC (pKYC), which requires continuous updates and monitoring. By using CDI, banks can improve how they manage customer data today while preparing for future advancements in risk management and regulatory requirements. This makes onboarding easier, helps banks stay compliant, and strengthens overall data security, all without disrupting current operations.
As financial crime continues to evolve and grow more sophisticated, the need for effective solutions has never been more urgent. CDI presents a powerful tool that helps financial institutions stay ahead of emerging risks. The faster financial institutions adopt CDI, the more they can reduce fraud risks, strengthen compliance, and improve their overall security. Acting now not only protects the financial system but also gives institutions a head-start in shaping the industry’s future direction. CDI offers a strong, practical solution to a growing problem—one that shouldn’t be delayed.
Henry Balani is Global head of Industry and Regulatory affairs, Encompass Corporation
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