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The analytics company partnered with Bitfury Group’s Crystal Blockchain to launch a service that will help banks assess and manage the risk of their clients’ crypto business.
In a press release published on 16 December, the company said that the complexity of tracing transactions and measuring risk on blockchains made banks hesitant to engage with clients working in the crypto industry.
“The crypto industry is relatively young and as the tech develops it has unique compliance requirements,” noted Marina Khaustova, the CEO of Crystal Blockchain.
She said that establishing anti-fraud operations in the industry requires combining the best practice of more mature financial industries with the knowledge amassed by experts in the crypto markets.
FICO’s financial crime solutions and the blockchain analysis provided by Crystal will enable banks to understand the risk-exposure from customers that engage in crypto business.
After gathering a potential client’s information, including all of their virtual assets and wallets, the bank will feed the data into FICO’s risk management solution. FICO’s know-your-customer (KYC) solution will then cross-reference the data against the Crystal Blockchain analytics platform to obtain Crystal’s risk score for each client.
The company explained that the risk score is calculated based on the client’s transaction history with anonymous and deanonymized sources and links. The traditional KYC risk factors and the Crystal risk score provide the initial risk assessment that can be followed with further due diligence.
Aside from assessing prospective customers, banks will also be able to apply the blockchain analysis to existing clients and monitor them in real-time. If the blockchain detects any “nefarious” crypto transactions it will automatically change the Crystal risk score and alert the bank. FICO’s Alert and Case Manager (ACM) will visualize further details from Crystal’s blockchain analysis in an interactive UI to support the bank’s investigation into the matter.