One AML New Zealand Electronic Verification

The Department of Internal Affairs, Financial Markets Authority and Reserve Bank of New Zealand have recently published a new explanatory note guideline for Electronic Identity Verification.

This guideline, which applies to Part 3 of the Amended Identity Verification Code of Practice replaces the previous version published in 2017 – and all Reporting Entities should now take this updated information into account in their AML/CFT programme.

The Updated Guidelines

In short, the updated note identifies commonly used electronic sources in New Zealand, and sets out the supervisors’ expectations when they review or inspect an Entity’s Electronic Identity Verification (EV) procedures, policies and control.

Electronic Identity Verification

EV – when a customer’s identity is verified remotely or non-face-to-face, has two components, both of which must be satisfied:

  • confirmation of identity information via an electronic source

  • matching the person to their identity

A Reporting Entity can satisfy EV requirements by using a single independent electronic source that incorporates biometric information – thus verifying an individual’s identity to a high level of confidence.

Alternatively, two reliable and independent matching sources can be used. In this case, supervisors expect that the primary electronic source used to verify the individual’s name and date of birth is either a confirmation source from the Government (e.g. passport, birth, death or citizenship certificate) or an NZTA Drivers Licence. Common secondary sources used to verify the individual’s name include Credit Bureaus, Companies Office, Land Registry or Vehicle registration.

Where an electronic source is not robust enough, additional methods must be adopted to ensure the individual the Entity is dealing with is the genuine holder of the identity they are claiming, such as issuing a letter with a unique identifier to a verified address, or phoning the customer on a verified number.

Documentation

Whatever methods are used, all Entities must clearly document their processes, to demonstrate how all relevant criteria have been satisfied.

This should include:

  • when EV will be used

  • the EV provider and product, including how it is used

  • the electronic source(s) used for verification, including whether a single independent source, or two matching sources, are used

  • record-keeping processes

  • exception and escalation processes

The Mandate

Given the prevalence of financial crime, money laundering regulations are more important than ever. EV processes – and these updated guidelines, play an imperative role in helping fight this corruption, and safeguard our nation.

But, here at One AML, we know that these updates can be confusing to navigate.

We Can Help

Luckily, with a wealth of AML/CFT compliance and subject matter experience behind us, we are here to help Reporting Entities throughout the country meet their obligations, including fulfilling these updated guidelines.

Get in touch with our friendly team of professionals today.