Compliance Acronyms You Need to Know for Digital Identity Verification

In the world of compliance, there are so many acronyms you need to know. GDPR. KYC. PSD2. AML. CCPA. Each acronym comes with its own set of complex requirements that businesses must meet. This complexity is a part of a global strategy to protect customers, the financial system and the world at large. Nevertheless, these compliance measures add great challenges to businesses as they try to follow the regulations, such as when teams work to implement digital identity verification measures. In this article, we will break down the different acronyms that risk and compliance teams regularly work with. The goal is to help you understand what the terms mean so you can better comply with the measures.


Are your customers who they say they are?


The internet has created new ways for cybercriminals, money launderers and fraudsters to take over people’s identities. This can wreak havoc on innocent people, companies or whole industries. This growing phenomenon has caused many to begin questioning who they are doing business with. It is becoming clear to many that its critical to perform id authentication and assure that the people we do business with online are actually who they claim to be.

Digital identity verification solutions offer a way to tie your customer’s identities with their real identities. Essentially, id authentication allows them to prove that who they claim to be is who they really are. These solutions help strengthen your brand online because they prevent fraud and ensure that you are interacting with real customers.

Digital Identity Verification Services also create feelings of trust and safety in your customers. As they go through the process of verifying themselves, they can feel confident that you are doing your due diligence to ensure your transactions are real and legitimate. In a world where identity theft and data breaches are at an all time high, building these feelings of trust and safety are critical.

Compliance Acronyms You Need to Know for Digital Identity Verification

Regulators Aim to Help

Because identity theft and data breaches are at an all time high, lawmakers are actively creating legislation and regulation to combat these growing threats to personal safety. Lawmakers want to keep people’s personal identity information safe and ensure they are protected from fraud. All over the world, they have created a wide array of legislation, including AML, KYC, GDPR, etc.

In the following section, we will discuss five key terms to consider when creating a robust cybersecurity process. This is especially important if your company operates at a global scale. These terms are important to consider when creating an identity verification process to validate your customer’s identities. In order to develop a proper identity verification process, you must comply with these important regulations.

Here are the most important terms you must consider:

     1. KYC: Know Your Customer

The financial industry has a vested interest in knowing who their customers are. This ensures that they are doing business with legitimate individuals. This can be quite hard when customers are looking to open accounts quickly, easily and online. Nevertheless, financial institutions must find a balance between confirming who their customers are and reducing the friction necessary to open a bank account.


     2. AML: Anti-Money Laundering

Financial institutions and other regulated entities have a duty to prevent money laundering from happening at their institutions. Money laundering laws are aimed at preventing criminals from profiting from illegal criminal activity—such as terrorism. It is especially important for financial institutions do their due diligence to ensure such activities do not occur.


    3. GDPR: General Data Protection Regulation

Probably one of the most widely publicized regulations in recent history, the General Data Protection Regulation is a consumer privacy act passed in the European Union. It protects consumer data in the EU. The legislation states that the personal data of EU consumers must be collected in a way that is obvious for EU consumers, is properly protected, and is easy to be deleted at the request of EU consumers. Any company that handles data from EU consumer data, whether they are located in the EU or not, must comply with this legislation or risk fines as high as 4% of their global annual revenue.


   4. CCPA: California Consumer Privacy Act

After GDPR passed, California was the first state in the United States to pass a data privacy law. It goes into effect in 2020 and is considered one of the strictest in the US. This law provides California residents the right to be informed about how their personal information is collected by companies and why it is collected in the first place. It also gives California residents the right to request their data be deleted in a company’s database, opt-out of the sale of their data, and access the data collected about them in a readily usable format. Failure to meet these mandates can result in fines of $2500 per violation.


   5. PSD2: Revised Payment Service Directive

PSD2 is a piece of legislation passed in the EU that affects both individuals and businesses. It allows bank customers to use third-party platforms to manage their finances. Under the directive banks must allow third party finance platforms to access customer accounts. It affects companies in the financial sector including banks, credit unions, fintech providers and payment companies in the EU.



As you work to enhance your cybersecurity strategy, you will come across many compliance acronyms, including GDPR, CCPA, PSD2, AML and KYC. These regulations all affect your security strategy, especially if your company is operating at a global scale. It is critical to comply with these different pieces of legislation and determine how they affect different parts of your cybersecurity strategy. For example, these pieces of legislation will affect how your digital identity verification process. This is why it is imperative to know what the regulations are, so you can make the appropriate choices to meet your goals and also meet compliance.

To learn how IDMERIT meets compliance and can assist with your identity verification needs, contact us for more information.




Tony Raval
Tony Raval

Tony Raval brings more than 15 years of leadership in data technology as the Founder and CEO of IDMERIT, headquartered in Carlsbad, California. He leads an executive team including top data tech veterans to execute on his passion of creating a global data universe generating true and trusted intelligence. IDMERIT’s competitive success has come from the company’s ability to perform cross-border transactions, for which Tony and his team have developed a meticulous process and progressive technology. The company was launched as the result of a highly effective engagement with a leading global financial institution, whereby the company was uniquely able to triangulate multiple elements to create a comprehensive, and yet, frictionless experience. Tony has provided data intelligence to companies such as Google, SalesForce, and HP as well as clients across financial, government and other sectors seeking a superior partner in compliance and mitigating risk. He holds a Master’s Degree in computer engineering and data sciences, is an active member of the Entrepreneurs Organization San Diego and dedicated mentor to new entrepreneurs in EO’s Accelerator Program, enjoys meditation and running, and he and his wife Sonal recently celebrated their three-year-old son's birthday.

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