Spotting fake IDs: A new reality for the art market?

January 4, 2021
by ArtAML™ Team

We frequently hear art market participants ask if money laundering is really an issue for the industry.

While it’s still early days for the implementation of the 5th Money Laundering Directive that required member states (at the time including the UK) to bring in legislation by 10th January 2020, as a specialist AML technology provider for the art market, we’re increasingly aware of real-life examples of questionable behaviour.

One UK gallery that was manually conducting ‘Know Your Customer’ – or ‘Know Your Collector’ in this instance, realised that a passport provided as photo ID by a prospective new client was a fake.

Our CEO Susan J Mumford notes:

“As a former art dealer and gallerist, this story is saddening and alarming alike. You would hope that art is always going to good homes, and when we hear stories like this, cannot deny that some criminal activity is being directed at the sector – presumably driven away from other industries that are already regulated. My personal hope is that the legislation will in time result in positive news headlines about the art world, thereby attracting new buyers who have previously been turned off owing to industry reputation.”

The international nature of the art market, in combination with an increasing number of online transactions (think: sales resulting from Instagram and transactional marketplaces), results in a need for secure and robust ID verification when it comes to AML. Enter our partnership with Yoti, a specialist ID verification service that has been built into the ArtAML™ platform.

The resulting ID verification service enables customers to securely upload photo ID – importantly avoiding have such a sensitive document sent by email. Initial checks on the ID are conducted using machine learning technology, and if necessary, additional verification is done by humans. For higher-risk transactions such as ‘buyer not present’ (as above), you can include ‘liveness’ and ‘face match’ checks as part of the authentication process for additional reassurance (see more info below).

Our CTO Dr. Chris King adds:

“Our integration with Yoti has been designed so that if a photo ID is identified as inauthentic, it will appear to the person uploading that all has gone as it should, while the art market participant will see the outcome. This feature supports taking a risk-based approach, which might result in the submission of a suspicious activity report and not ‘tipping off’ the would-be buyer, which is against the law in the UK and many other jurisdictions.”

How then does the partnership with Yoti alleviate concerns?

Yoti uses both computer vision and human experts. This combination of automated and manual checking enables previously difficult cases to be processed, providing a higher level of assurance.

Data validation checks ensure that text and numerical fields included in the ID match the encoded barcodes or MRZ fields on the document.

Visual inspection checks for security features such as: microprint, holograms, template matching, pixel modification and more.

Using liveness technology, Yoti ensures that individuals using the service are real and not impersonating someone else. A simple movement towards the camera enables the parallax effect to ensure the face is 3D, while texture and photo analysis confirm the human is real and not a photo or spoof attack.

In employing these anti-spoofing tools that have been approved by the National Institute of Standards and Technology (NIST), you can be rest assured that ID documents provided are genuine and belong to the individual using the service.

With ArtAML users reporting that what used to take hours now takes minutes, it’s clear that this integration, which utilises cutting-edge technology, provides assurance and saves vital time. This achieves our goal to support users’ compliance while they carry on with business.

Keen to see ‘Remote ID verification’ in action, with potential application for your own AML needs?

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