New innovation: Biometric facial recognition launched by ATFX takes FX trading into effective future

Today’s facial recognition technology is of such high resolution and has such a low failure rate that national governments are using it routinely at borders when admitting (or not!) millions of people every day worldwide.

In this age of biometric national passports and automated airport security systems, the ability for a computerized government database to be able to connect to a biometric recognition system to vet entries and exits across the world is very much proven, and is very likely to be more accurate than human resources.

During recent months, major banks and financial institutions have begun to refine their biotechnology development, largely as a proactive step to move the data security and client safety arena into the next generation.

It was therefore inevitable that some of the more innovative and forward-looking FX and electronic trading companies would begin developing facial recognition systems and deploying them in order to provide retail traders with a comprehensive and ergonomic security solution.

As 2020 begins and we now move into a new decade, this type of technology is being pioneered.

ATFX has been at the forefront of developing a facial recognition solution, and has spoken this morning to FinanceFeeds about its importance in providing a comprehensive solution in the areas of artificial intelligence, cloud computing, and big data in areas such as trading operation and market support.

Speaking to ATFX’s senior management team this morning, the rationale behind the move toward biotechnology was explained to FinanceFeeds.

“ATFX attaches importance to the security of customer data, so we have used various technologies to prevent risks steadily. This technology will help enhance the security standards and precision in client’s identity verification at offices, thus reducing identity theft in account opening” said the company’s senior executive.

“The company has injected investment into the latest fintech solutions to provide one of the best user interfaces in the industry currently. Our clients will be able to enjoy the benefits from the existing and new innovative services that the fintech arm is offering.”

How it works:

The move aims to allow clients to open the account and conduct transactions anywhere, anytime within 60 secs and without having to visit an office and creating new security standards during the digital era.

Clients of ATFX only need to fill in the necessary information and import the ID picture. Afterwards, the Optical Character Recognition (OCR) system can read and identify the information of ID card and the geometry of clients‘ faces automatically, which significantly reduces the time or errors compared with the traditional way. Also, it can reach a confidence level of 98%.

In order to achieve constant results in multiple regions, ATFX’s international coverage required an automated KYC due diligence solution suitable for multiple-country use.

To achieve the necessary level of compliance and fight off increasing identity fraud, ATFX joined forces with Electronic IDentification, a software vendor which aims to disrupt the Digital Identification and e-Signature industry, therefore providing a single solution for all things compliance and user onboarding.

ATFX consider these matters to be of great benefit to the company, clients and the FX industry because it prevents unauthorized access by malicious persons, ensures the safety of clients’ assets, avoids legal issues when complying with new and future regulatory rules.

A vital step in cybersecurity

FinanceFeeds has been an advocate of the move toward biotechnology for quite some time. Two years ago, we pointed out that as an equally effective paradox to watertight systems that only allow access to data or international mobility via completely unique attributes such as the iris within a human eye, criminal entities with intentions to defraud are also using high technology and ruses that appear plausible to the potential victim in order to empty bank accounts – and similarly electronic trading accounts – of retail customers worldwide.

The general public across many modern nations – which let’s face it – represents absolutely the target audience for many large retail FX companies of good standing – have demonstrated their faith in biometric security systems, as there has been no reported resistance by any individuals or groups when being asked to provide photographs to government agencies in order to be able to use facial recognition systems to verify identity for all manner of very important and security-dependent tasks.

Yet, when a physical letter is sent, retail customers are beginning to doubt its legitimacy.

This is perhaps due to a widespread understanding that unique facial features are absolutely unable to be counterfeited, as today’s members of modern society are no longer afraid of ‘harvesting of information’ by governments as was the case in the 1990s with those who are now retirement age, but fully understand the modern systems which operate both for the preservation of legitimacy and compliance, and also methods used for nefarious purposes.

MiFID II was implemented in January 2018, and during the period when many retail FX firms were in the process of digesting the somewhat ambiguous infrastructural rulings from the European Securities and Markets Authority (ESMA) which have thus far required exponential explanation to compliance personnel by  specialist regulatory technology firms and trade repository executives across the world.

Within MiFID II’s stipulations on the reformatting of brokerage infrastructure, absolutely no advancement in cybersecurity for retail clients had been included, leaving the forward thinking innovators within our industry at companies such as ATFX to pre-develop it and lead the way.

Since that time,other important regulatory authorities around the world have looked increasingly at biometric recognition technology, the most notable being Hong Kong’s SFC, which in November 2019 hinted at conducting inspections on firms under its auspices to evaluate compliance with cybersecurity requirements.

To mitigate hacking risks, the SFC mandated two-factor authentication (2FA) along with 19 other baseline requirements for all Internet brokers, including companies that offer leveraged foreign exchange trading. Since April 27, 2018, logging into online trading systems requires authentication utilising two of the following factors: what you know (such as your login password), what you have (such as an SMS one-time password received via your mobile) and who you are (such as your fingerprint). Other baseline requirements came into effect in July 2018, including prompt notification to clients upon system login and timely patch management.

During that particular report, Hong Kong’s SFC touched on biometric recognition, but has thus far limited it to fingerprints, however eventually facial recognition is likely to be globally required, and is much easier to administer for FX companies due to most of the retail FX trading community using laptops with webcams, as not many retail laptops are equipped with fingerprint recognition pads.

On this note, ATFX considers that financial technology is driving innovation in financial services globally and changing the trend of the FX industry and end-user expectations for trading services.

“Following the company’s institutional business, ATFX Connect’s successful in the global from the third quarter this year, we have evolved from being recognised as a retail broker to an innovative and rapidly growing fintech company with the capability to facilitate and partner with a range of more diversified clients” said ATFX’s senior management team.

“ATFX puts great efforts in striking the right balance between retaining appropriate flexibility for innovations and ensuring that clients interests adequately safeguarded during fintech development. The company recently created an additional layer to ensure the security and safety services to the clients” concluded the company’s executive.

In 2018, Bloomberg deduced that given industry-wide implementation costs that are expected to exceed €2.5 billion as firms face reworking KYC (know your client) process, repapering clients and reconfiguring systems, they should consider focusing on implementing in the most efficient way possible.

Bloomberg also opined at the time that while the regulation also gives firms an opportunity to enhance their services, gather more useful and accurate data and – most importantly – boost competitiveness, interpreting the KYC data and new client onboarding and reporting requirements in the right way will be critical to success.

Quite simply, this is absolute testimony to the outmoded nature of most mainstream financial services reporting and advisory firms (some of which are being paid subscriptions of over $30,000 per month for their consultancy services), and also highlights the ineptitude of those responsible for consulting with ESMA on behalf of national regulators.

This of course does not simply apply to European markets, as the prevention of fraudulent access to retail trading accounts is the responsibility of every broker and regulator globally, however given the complexity and requirement to restructure the environment which operates FX firms in Europe, this has been overlooked.

Today’s smartphone cameras can easily be used to verify account access via facial recognition, as can computer webcams.

The recently released Symantec Internet Security Threat Report (ISTR) Financial Threats Review 2017 stated that 38% of all financial threat detections were against corporations, rather than customers. While these attacks are more difficult to execute, they yield a higher profit, which is why there was 1.2 million such attacks in 2016.

Attacks against financial institutions are on the rise, with the emergence of a select group of cyber criminals targeting financial institutions in a sophisticated manner.

Some research by FinanceFeeds conducted in the Middle East last year showed that incidents targeting banks have spread around the world, striking institutions in Ukraine, Poland, Bangladesh, Ecuador, U.K. and India, to name a few, with losses totaling hundreds of millions of dollars. These widespread events indicate that financial criminals see these networks as prime targets for attack.

FinanceFeeds concurs with this, and also is of the understanding that several attacks of this nature are aimed at gaining access to customer accounts and passwords, providing the attacker with the full user credentials required to make successful withdrawals from trading accounts to their own bank accounts without any contact with the actual account holder.

The FX industry is so multi-faceted that the need for cybersecurity exists in many specific areas such as the electric payment processing sector, the safeguarding of client funds in online trading accounts and the actual access to trading accounts themselves in order that trades can be opened and closed.

Thus, ATFX’s step forward is most certainly a welcome one for clients and regulators alike.