Thursday, 16 July 2020

CEX.IO: 30% Decrease in Fraud Since KYC Procedure Upgrade

CEX.IO confirms a 30% decrease in fraud after the KYC procedure upgrade in December 2018, as a result of automated rejection of fraud attempts before verification requests.

This improvement is the result of implementing a complex RegTech solution, which combines various KYC/AML tools. CEX.IO uses this solution to verify users via the mobile application.

Mobile verification consists of a fully automated procedure that includes scanning a user’s ID, verifying residency, and collecting data to comply with existing AML standards. While the front end of the solution has been carefully crafted by top UX specialists to minimize the number of actions required from the user, the backend has evolved based on almost a decade of experience of the CEX.IO compliance team. The heart of the solution is an Expert System: an advanced scoring platform that collects all data about a customer into a dynamic score card. This system is also responsible for further behavior monitoring and information updates.

A Risk Analyzer functions as a decision-making algorithm. Having collected data from more than three million customers globally, we were able to tailor this algorithm to be very specific for every country and region. Taking this approach allowed us to cut fraud significantly as well as increase the number of automated decisions.

As a result, upgraded verification due diligence procedures are completed with little to no human intervention. Excluding the human factor makes verification faster, hence customers spend less time waiting for the AML verdict and more time trading.

“We are constantly improving our onboarding flow, keeping user experience as a top priority. The main idea of this major upgrade is to cut the number of actions required from the user and replace them with background checks. For example, to take a selfie, you now have to blink instead of tapping on the screen. In this way we eliminate an additional tap on the screen while bringing in an incremental liveness check. It’s also a fun experience.” — Vitaly Kedyk, CEX.IO Executive Director

The RegTech solution is based on the UX experience of a team that has been developing verification tools for seven years.

“With the upgraded KYC procedure, CEX.IO is aiming at a zero-fraud service, which results in absolute security of customers’ funds. As of now, we are offering verification through the mobile app, but our system is able to work with all types of interfaces, including tablets and web.” — Vitaly Kedyk

About CEX.IO

A UK-based multi-functional cryptocurrency exchange established in 2013, CEX.IO provides a rich variety of trading tools for Bitcoin, Bitcoin Cash, Bitcoin Gold, Ethereum, Zcash, Dash, Ripple, Stellar, and Litecoin. These cryptocurrencies can be traded for USD, EUR, GBP, and RUB.

CEX.IO provides a variety of payment options including credit and debit cards as well as reliable and timely wire transfers. The company strives to offer the best cryptocurrency trading experience and the most convenient service to its customers. Since April 2016, CEX.IO clients have processed over 1 billion US dollars via Visa and Mastercard cards.

The CEX.IO exchange repeatedly passes PCI DSS certificate renewal to validate compliance, allowing it to process, transmit, and store credit card data.

CEX.IO is among the founders of CryptoUK, an association started by major cryptocurrency players to represent the interests of exchanges, trading platforms, intermediaries, and asset managers, among other stakeholders. CryptoUK is aimed at building cooperation with authorities in the UK, such as the FCA, to develop an appropriate operating framework for crypto businesses.

With more than 2.7 million users across the globe, CEX.IO provides stable services backed by cold cryptocurrency storage, financial viability, high security, and KYC and AML best practices. Since 2015, CEX.IO has held MSB (Money Services Business) status with FinCEN, a bureau of the US Department of the Treasury. As a registered MSB, CEX.IO has proved that the company complies with Bank Secrecy Act requirements applicable to financial institutions as well as to each of the specific requirements applicable to MSBs.

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