FDIC and FinCEN Announce Winning Teams for Digital Identity Tech Sprint

On April 5, 2022, the Federal Deposit Insurance Corporation (“FDIC”) and the Financial Crimes Enforcement Network (“FinCEN”) announced three teams of experts to approach creativity, effectiveness and market readiness and who will lead the charge in assessing and measuring “the effectiveness of digital identity proofing—the process used to collect, validate, and verify information about a person.”

These three teams were selected from the 200 applicants who sought to participate in the “Tech Sprint.” Once selected, these teams shared their approach to “increase efficiency and account security; reduce fraud and other forms of identity–related crime, money laundering, and terrorist financing; and foster customer confidence in the digital banking environment.” In order to do so, the agencies posed the following question:

“What is a scalable, cost–efficient, risk–based solution to measure the effectiveness of digital identity proofing to ensure that individuals who remotely (i.e., not in person) present themselves for financial activities are who they claim to be?”

According to Martin Henning, the FDIC’s Deputy Director of Operational Risk, the mitigation of fraud via the use of proofing in the financial sector will “help us to continue to have confidence in the safety and soundness of our banks and the integrity of the U.S. banking system.”

Financial institutions and organizations engaged in the financial sector should continue to monitor the progress of this sprint to ensure that they are aware of the potential next steps for the industry.