PayGate Leads Investor Protection with P2P Financial Anomaly Detection

PayGate Leads Investor Protection with P2P Financial Anomaly Detection

Block abnormal transactions through FDS and AML

In an era when online fintech is becoming a household item, the importance of detecting abnormal transactions is growing further ahead of the implementation of the legislation of the P2P financial industry amid concerns over consumers' damage from illegal activities such as hacking or voice phishing and money laundering.

In 2020, P2P financing will be the first year in the world to be recognized as a full-fledged financial operator through the implementation of the Online Investment Linked Financial Business and User Protection Act (hereinafter referred to as the “On-To Act”) under the guidelines of financial authorities. PayGate is leading the industry with substantial results protecting investors by blocking abnormal transactions through Financial Instruments (FDS) and Anti-Money Laundering (AML), which must be implemented as financial operators.

▲ PayGate's AML & FDS Performance since October 2018 (Source: PayGate, Inc.)

Through PayGate's Seyfert system since October 2018, the number of suspicious transactions that have been auto-blocked by the system was 64,850 out of the total 15 million transactions, of which 47,036 transactions were manually reviewed, resulting in about 100 cases, 1 billion won worth of consumer damage prevention.

Looking at the types of abnormal transaction detection, there are a variety of cases such as △attempts to launder money using illegal sports toto sites, △voice phishing attempts after acquiring personal information through hacking of portal site accounts, and △attempts to buy goods through shopping malls.

There were a total of 240 P2P financial service providers registered with the Financial Supervisory Service as of February 2020. There are still many businesses waiting for registration, and since the law's implementation, a growing number of prospective start-ups are trying to plan and pursue projects that are precisely differentiated according to the institutionalized content.

On the other hand, since the ratio of abnormal transactions such as △voice phishing, △second-hand fraud, △virtual account payment fraud, and △illegal money laundering is also increasing, PayGate's detection of abnormal transactions is an important prerequisite.

PayGate has as much internal control and compliance mind as any other financial institution, implements steady training for executives and employees, including protection of personal information and prevention of money laundering, and has invested a lot of money every year from start-up to now to self-appraise external accounting audits and security audits.

In addition, we are striving to develop technology and services in order to self-declare the Paygate Vision 2020 to reflect the needs of P2P financial firms and investors, and to serve innovative systems in a total of three phases.
PayGate, which has made various efforts for the national safety of fintech, was established in 1998 and is steadily growing through e-payment service, and is a fintech company that continues to develop systems and technologies along with the development of the domestic P2P financial industry.

The Seyfert service, which is operated by the company, is a blockchain-based web standard FinTech platform that utilizes global financial accounts that allows users to transfer funds, settle money, transfer foreign currency, settlement, exchange of money, and escrow without special plug-in installation, while providing third-party separate storage services for investments that are indispensable in the P2P financial business.

The third-party separation storage service is encrypted in the form of blockchain base's electronic wallet system, which is highly secure, and continues to carry out abnormal transaction detection (FDS) and money laundering prevention (AML) through big data analysis system and deep learning by utilizing the strength of phishing block service, thereby playing a role in protecting P2P financial investors.

"We will always communicate and work in a wake-up manner so that we can establish ourselves as a reliable company in the P2P financial market where the day changes and develops differently," said Park So-yeong, CEO of PayGate. "To push for this, Vision 2020 was to be announced externally through meetings with member companies, but we are maintaining internal security to strengthen the domestic situation and internal affairs.", she said.

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