Some small but important progress was made in the fight against fraud during the final day of a recent conference organized by the Cloud Communications Alliance (CCA). The association has endorsed new best practice guidance for know-your-customer (KYC) processes that are based upon the model KYC standards published by Numeracle last year. The CCA has several important internet-based comms providers amongst its membership, including Gamma, Peerless, Ribbon, Sinch, Vonage and Zoom. The introduction to the guide argues that it should be followed in order to comply with obligations imposed by governments and regulators.
It is crucial to highlight that the implementation of KYC procedures is now not merely a voluntary option but rather an explicit legal obligation mandated by applicable laws and regulations around the world. Additionally, regulators around the world have emphasized this requirement in their enforcement proceedings. Failure to implement robust KYC procedures has resulted in significant fines, tarnished CSP reputations, and the imposition of compliance plans with regular mandatory reporting.
I am not a fan of this kind of argument; multinational comms providers headquartered in the USA would not have made such limited progress with improving their KYC processes if they genuinely believed there might be a severe cost for failing to comply with vaguely-worded obligations. However, progress usually depends on groups of businesses agreeing on a common need to improve, and consequently isolating those competitors who refuse to change. It then becomes easier for authorities to penalize the laggards. The publication of this guidance should be seen as a significant development within that context.
The KYC guidance is not mandatory but CCA members are strongly encouraged to follow it:
Adoption and use of these best practices and principles reflects a company’s commitment to preclude the use of its network(s) to transmit illegal or unwanted calls or traffic while providing the highest quality communications service to its customers. CCA members who pledge to comply with these KYC best practices and principles will receive a special designation as a “CCA KYC member.”
The CCA’s KYC guidance can be found here.
