The Office of Economic Cooperation and Development (OECD) predicts that Colombia’s economy, which has grown 1.8% in 2024, will see gains of up to 2.8% in 2025.  With over 44 million residents and a booming domestic economy, it’s not surprising that there’s been a boom in digital identity fraud, too.  If Colombia wants to continue its rise to financial power in Latin America, businesses need to combat the 43.5% growth in digital fraud.

Booming Digital Economy in Colombia

As of 2023, 63% of Colombia’s population regularly uses the internet, with over half of the 15 years or older population having participated in digital transactions.  This is an over 30% growth from 2014, noting the country’s rapid digitalization.  

Colombia also has the third largest market of digital firms in Latin America and the Caribbean (LAC), with 12.8% of all digital firms in the region.  It makes sense, then, that in 2023, Colombia was chosen to house the European Union (EU) – LAC Digital Alliance.  This alliance is aimed at fostering secure digital transactions, decreasing barriers to digital access, and boosting research opportunities.  

Digitalization Doesn’t Mean Sophistication

While a leader in the digital marketspace in LAC, Colombia isn’t immune from struggles to grow its digital economy.  Inequality to digital access is a huge barrier to widespread adoption of e-commerce, though organizations and alliances like the EU – LAC Digital Alliance are working to minimize the gap in access.  

Global efforts to boost digital usage and digital transactions in Colombia have been successful, but the growth of access doesn’t always translate to sophistication of use.  Low digital skills and knowledge prevent those with newfound access to online spaces from safely participating.  The first half of 2024 saw an almost 50% increase in digital fraud, making the need for Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations necessary for consumers and businesses alike.

Current KYC and AML Landscape in Colombia 

The strict KYC and AML regulations already in place are the first step in ensuring Colombia’s continued expansion into digital commerce.  Law 526/1999 established the Financial Information and Analysis Unit (UIAF) to detect and prevent financial crime.  The UIAF has been supplemented by additional laws, like Law 1121/2006, which established regulations that business and other entities must comply with to avoid being associated with illegal activities, such as terrorist financing.  Provisions include strict due diligence guidelines, record-keeping requirements, and more aimed to boost online protections.

Clear and strict regulations are an important part of maintaining security and preventing digital fraud, but their power is limited. Law 1581, the Statutory Law on Personal Data Protection, restricts the collection of personal information online.  This limits the usefulness of many identity verification systems, as they rely on this data to validate consumer information.  

This, coupled with a wide array of identification documents, makes digital identification difficult.  Official documents range from passports to citizenship cards to driver’s licenses.  The variety of document types can further hamper document verification, an important tool of identity validation.  

Aristotle Integrity and Our Orchestration Approach to Identity Verification

Integrity, a division of Aristotle, is here to help your business expand into Colombia’s growing digital landscape to provide you with the ease of mind you need to take on this new venture.  Our orchestration approach to identity verification provides you with the peace of mind you need to be compliant with KYC and AML regulations while protecting your consumers. 

• Integrity IDV-Direct: A web-based platform to verify the identity of online visitors across our database of 3.4 billion citizens across 135 countries allows you to quickly and efficiently. The platform is available through a single API allowing for an “integrate once, use anywhere” approach and is combined with several external gateways to deliver a best-of-class verification solution that leverages global data.  
• Integrity AutoDoc and Integrity Document: We offer both automatic and manual document verification options to ensure that you’re compliant with local regulations and have a solution that fits your verification needs.  Our partners and agents are ready to help and are tested regularly to find potential fraud in document review and identity verification.
• Integrity AML: Check consumer information against SSN dead rolls, OFAC, DFAT, UK HM Treasury, DEA, LEIE, Interpol, and numbers of other global financial watch lists. Integrity also checks for Politically Exposed Persons (PEP) that may need to be tracked and provides a real-time flag and access to PEP information in the back office to determine true hits or false positives.

How can Integrity help you address expanding into new marketplaces and ensure your compliance with local regulations? Click the “FREE DEMO” button in the upper right corner and a representative will suggest the proper solution to meet your needs.