Ricardo Robledo
Tu Identidad
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Knowing Your Business Partners Saves Money, Reputation

By Andrea Villar | Mon, 08/09/2021 - 05:00

Q: Why do companies need to incorporate identity verification in their processes?

A: There are two sides to this. The first is in the financial sector, which is regulated and must comply with the Know Your Customer (KYC) process. This process includes verifying ID cards, facial identification, proof of address, and background checks. Mexico is part of the Financial Action Task Force (FATF), which together with the National Banking and Securities Commission (CNBV) and the Mexican Association of Insurance Institutions (AMIS), among others, established all the rules that prevent money laundering. Banks, Multiple Purpose Financial Societies (SOFOMs), and insurance companies have no choice but to comply with these regulations. Their purpose is to create a risk approach for the institutions to identify and prevent money laundering. 

The second is the non-regulated industries, where an increasing number of companies are finding it necessary to have identity verification tools due to the complexity of the digital sphere. It is increasingly essential for the provider to know its customers to avoid financial and reputational risks. Just as companies need to know who their customers are in B2C operations, the same should apply to B2B. It could be risky to establish a business relationship with a company you do not know.

Q: What are the main problems Mexican companies face when they cannot validate a person's identity or company?

A: By not having validation protocols, companies may face fraudulent transactions that lead to significant financial losses. Additionally, the reputational risk is high. One only needs to look at how national and international banks have been flagged for not keeping up-to-date customer records and allowing illicit transactions. Last but not least are the costs that a company can save. Today's companies still have processes that are full of paperwork and erratic interaction between different areas and with their customers. This results in longer delivery times for a product or service. If digital resources are not used to streamline these processes, the long-term cost is very high. 

Q: What is your authentication approach for B2B processes, considering that a false negative can mean a big loss in sales?

A: Identity validation is not a binary issue that can lead to false negatives. Increasingly, additional factors are being taken into account as part of a validation process that allows companies to achieve higher levels of accuracy. The identity validation process is like a funnel that incorporates different diagnostic measures. For instance, if a user submitted an unauthenticated document, we will request extra paperwork to check that they are not fake. We also need to know if they are on any national or international blacklists. Each of these components adds an additional percentage of confidence to eliminate false negatives. This process, as time-consuming as it may sound, only takes a few seconds. 

Q: What does it mean and what does it entail to create a digital identity?

A: The digital identity stems from the evolution of the KYC process, which took place in Estonia. This country allows the information owner to use it and share it with whomever they want. If people go to a shop and are asked for their information, they give it with their consent and have the right to know who, where and for what purpose it is used.  In Mexico, the initiative to create a digital identity card was recently approved by Congress. This is an example of the creation of digital citizenship promoted by the state. The private sector has no place in this process but it does have a role in its use and protection. 

Q: What are some specific industries or processes that would benefit from such a tool but which you have not tackled?

A: There are several industries that can benefit from this technology such as notaries, real estate brokers, among others. For example, when you buy a car, the car dealer needs to comply with the KYC process for all the sales which exceed certain thresholds. A few months ago, I bought a car and spent a long time sitting at a desk while my documents were checked and photocopied and forms filled out. In this case, a digital identity verification tool would be more than useful.


Tu Identidad, founded in 2017, is a Mexican company that offers an identity validation platform for authentication of both companies and individuals.

Andrea Villar Andrea Villar Journalist and Industry Analyst