High-Tech Financial Crimes Warrant Coordinated Digital Identity Efforts, FinCEN Warns
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Leaders at the Financial Crimes Enforcement Network noted that stronger authentication measures are critical and spurred by emerging technologies.
Securing digital identity across government networks has a wide range of use cases and applications, including within the Financial Crimes Enforcement Network as the agency works to combat emerging threats linked to advanced technology.
Speaking during the FedID conference this week, FinCEN Acting Deputy Director Jimmy Kirby discussed his organization’s endeavors to counter online financial crime through secure identity authentication protocols. Kirby mentioned security breaches that expose sensitive personal data and login credentials as chief reasons financial institutions need to incorporate a strong digital identity verification system.
“FinCEN encourages financial institutions and service providers to continue to coordinate between their cyber security, fraud and financial crime areas and consider specific NIST digital identity standards as they build out their identity proofing and authentication processes,” he said in remarks at the conference.
Kirby also emphasized the rise in digital assets, namely digital currencies, as catalysts for stronger authentication measures implemented by financial and banking entities.
“There are a number of features of a digital identity framework that—taken together—have the potential to spur innovation in financial products and services across the legacy financial system, as well as digital assets and emerging central bank digital currencies,” he said.
FinCEN advocates better security protocols for users attempting to access a given network in a financial organization, part of the agency’s broader plans to counter money laundering and terrorist financing.
Advisory entities, like the National Institutes of Standards and Technology, have long supported the implementation of digital identity management services and processes within federal agencies to bolster security.
Kirby noted that, per NIST’s description, successfully managing digital identity is challenging. He said that some of FinCEN and the broader federal government’s initiatives to source smart digital identity technologies include global partnerships and authentication-focused tech sprints.
“All of these building blocks need to preserve privacy and security, promote financial inclusion and protect the integrity of the financial system,” Kirby said. “These are key to building trust in the system.”