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FinTechs belonging to this category provide identification services, which are required for most banking services.
Introduction
Attitude of the country towards identification services
The identification market is already relatively established in Australia with both private entities such as banks, and other financial institutions and public entities using this technology.
The Digital Transformation Agency (DTA) has recently partnered with FinTechs to transition identification technology to be more greatly used by government services. The system will allow both people and businesses an easier more secure way to verify their identity when using governmental services.
Legal affairs
Obligations and requirements to provide identification services
Providing Identification services within Australia requires compliance with the Money Laundering and Counter-Terrorism Financing Act (Cth) 2006 (AML/CTF Act) and the Anti Money Laundering and Counter-Terrorism Financing Rules 2007 (AML/CTF Rules).
These requirements include documenting the identification procedure and verifying that they are satisfied that the individual is who they claim to be and that the customer who is claiming to be an entity is a real entity.
These regulations do allow for third parties to fulfil the identification and KYC requirements under section 37A of the Act.
Additional comments regarding the legal situation for identification services or what FinTech’s must be aware of in this business area
With recent changes to anti-money laundering rules and regulations which expands upon the third-party reliance model it allows further delegation of due diligence and identification checks. The amendment which occurred in 2021 established three new categories for reliance including a safe harbour for isolated breaches.
Economic conditions
Market size for identification services and biggest companies in this business area
The market for FinTech within the identification area is relatively small, forming only 1.2% of FinTech’s total market. Major companies within this area in Australia are Frankie Financial Pty Ltd, Meeco and Aplyid Pty Ltd.
Additional comments regarding the economic situation for identification services or what FinTech’s must be aware of in this business area
N/A.