The Power of Orchestration Hubs with On-Demand KYC and Anti-Fraud to Fuel Trust, Adoption and User Engagement in Cryptocurrencies.
Published on June 18th, 2020.

When we reflect over the past few months and the impact the global coronavirus pandemic has infiltrated on all levels from business operations, economic boundaries, the very essence of the world's financial system to the way people live and work it truly uprooted. Our world was not ready for a global pandemic, just like it wasn't ready for the global catastrophes that have hit historically, and it has managed to destabilise our entire globe. The difference, however, is that we are in an era we are more technologically savvy and interconnected. Globally we had the opportunity for a vast amount of markets to adopt their businesses mantras and processes to accommodate this anarchist and continue to thrive.

Global events and hardships have proven to reshape our world unapologetically. In our current pandemic, it has forced the utopia technological digitalisation of our engagements to a new wave of innovation. People have turned to the comfort of their internet to facilitate their external existence. Whether working remotely, video conferencing to connect with a doctor, a friend or family member, through to entertainment seeking, financial management and lifestyle purchases. Everyone globally states, this too shall pass, regardless of how disruptive and disastrous its consumption has been. However, when it halts its global absorption, it will bring with its sizable and lasting structural changes to our online and economic ecosystems.

Reflecting over the past few months in our financial ecosystem we have seen serve turbulence, impacting our global stock markets, financial products and commodities as a result of COVID-19. Additionally, due to the threat of the pandemic contamination businesses have opted payment preferences to cards and digital with significant adoption as people are not willing to increase their risk of exposure by physically handling fiat. Globally we have turned emphasis on digital payment, cards, bank ledger shifts to manage our finances and increasing our trust in digital investments as a path forward. The pandemic has fuelled a 72% surge in the use of fintech apps in Europe alone, speeding the pace of overall technological progress and advancements. (1)

As a result, we have genuinely begun seeing a rapid rise of adoption towards cryptocurrencies. They are finally surfacing as a palatable alternative payment method to fiat. In a recent survey performed in April 2020 (5,421 participants in 24 countries) unveiled that 45 per cent of respondents preferred Bitcoin rather than stocks, real estate, and gold, and trust in Bitcoin has grown 29% in the past three years. (2)





This rise in the trust is directly correlating with the rising price. On May 7th, Bitcoin broke $10,000 USD for the first time since February 24th, just days before its next halving. (3) Furthermore, data from major exchanges – Deribit, LedgerX, Bakkt, OKEx, and CME – shows that open interest on options rose above $1 billion, surpassing the previous all-time high of $970 million registered on February 14th, according to crypto research firm Skew. (4)

As we continue to come out of this global pandemic, a recession is looming, and the purchasing power of traditional currencies is likely to be affected. In a recent article, Antoni Trenchev, co-founder of Nexo states "Bitcoin is mostly uncorrelated to the rest of the market, providing asymmetric returns for holders of the cryptocurrency." (5) For those who understand the benefits of digital currency and engaged with its adoption – it is like digital gold – predict the current surge will continue to expand interest in owning Bitcoin and Bitcoin could rise to a $50,000 value in 2020.

When we dive further into the potential for digital currencies to be infiltrated deeper into our advancing digital world market, global regulations and fraud prevention requirements will need to be well established. The rapid rise of adoption will inevitably bring more risk and open gates for sophisticated fraudsters to indulge. Historically, regulations over the digital currencies have been inconsistent patchwork solutions founded on reaction and implemented state by state and country by country. For an industry built and designed for instant, global, internet-based transfer, this has been a challenge to navigate. In Europe, where most nations are now transposing the first money laundering directive (5MLD) (6), licensing and registration requirements are being implemented.

Data is leading the way and the crypto market is no different.

Digital currency platforms will need to not only implement more advanced Know Your Customer (KYC) into their customer onboarding and engagement journeys, but be ready for whatever regulatory advancements generate, globally and per localised region. However, doing so efficiently and seamlessly has proven to be one of the most significant industry pain points. Integrating a single KYC data service provider can be a costly and cumbersome process. Many crypto platforms have integrated the bare minimum. They have not established a foundation to future-proof their KYC and risk mitigation while harnessing the power endless on-demand KYC can do for their business.

Just as data aggregation and complete orchestration hubs with build-in anti-fraud technology have proven the way of the future for merchants within our online payment ecosystem and various online markets, digital currency platforms are no different. With the current online engagement levels and cryptocurrency adoption on the rise, there is no time than now better suited for crypto businesses to gain a competitive edge to leverage data and these solutions.

Even though consumers have ported their liveliness online, they are now even more apprehensive of fraud and risk exposure towards their digital identities. Engaging with a crypto business that has implemented a wide range of KYC and fraud defence measures will maximise customers engagement, adoption and build further trust and loyalty to not only their crypto platform but to cryptocurrency as a whole.

Orchestration hubs solve the cost, time and complexity many businesses face in their risk mitigation.

Orchestration Hubs provide instant access to thousands of KYB and KYC data services with real-time activation, agility, automation and a consolidated view of risk to bolster onboarding and transactional security measures from just a single endpoint. They are becoming the most efficient method to obtain all the KYC required and premium fraud defence without any touch on operations or time waiting for multiple KYC integrations to be complete.

4Stop, leaders in data aggregation and fraud prevention technology have one of the world's largest data hubs composed of tier-one global data providers within their ecosystem - providing complete global coverage. They remove the complexity of risk management integrations and manual due-diligence to establish a one-stop risk mitigation solution. Proven to fuel online businesses and crypto platforms with best-in-class global KYB and KYC data services, compliance and optimal fraud defence in a fail-safe, future-proof, simplistic and real-time manner. Companies can deploy data services in real-time combined with cascading verification logic to validate in the most cost-saving way, with real-time results and intelligence. 4Stop's platform allows them to confidently anticipate risk and be empowered to make well-informed decisions, backed by quantifiable data to manage their regulatory obligations and fraud risk to accelerate their business performance, regardless of our online evolutions.

To find out more about 4Stop's innovative KYB, KYC, compliance and anti-fraud solutions please contact a representative directly at sales@4stop.com or register below for their upcoming webinar on June 24th at 2:00 pm GMT "How to Future-Proof Your KYC and Risk in One API."