Inventing Anna - not on our watch

Like every good story, it involves creative licence applied to real-life events, punctured with glamorous locations, private jets and just enough technical detail to keep your Head of Compliance awake at night. Indeed, the series boasts some of the highest viewing figures on Netflix this year.

This ‘true story’ involves a young woman of little means who allegedly defrauded financial institutions, businesses and high net worth individuals and borrowed significant sums of money with no means of repayment. A self-styled German heiress, Anna Delvey and her story have become a lesson for institutions and millennials alike; if something appears too good to be true, it probably is.

There are wildly varying reports of the figures involved in the fraudulent applications and transactions involved in Anna's significant fraudulent activities. Whilst reports differ, it is recognised that the intention was to raise multi-millions to fund an upmarket arts and entertainment facility in New York. Understandably, the financial institutions who were allegedly taken in by Anna, have been hesitant to disclose the sums and terms involved in the fraudulent loan and funding applications. We do, however, think it is fair to say that their Risk and Compliance Heads have had significant questions to answer as a result.

Could this really happen?

Is the story fabricated to such an extent that it is beyond the realms of the possible in today’s global financial world? In short; no. It is a matter of legal fact that Anna Sorokin (even her name was fraudulently acquired) was found guilty of theft of services and grand larceny in 2019 and was convicted on eight counts and sentenced to four to 12 years in prison.

So how did this happen?

In today’s supposedly highly regulated world, how did a young woman of no financial means manage to persuade a host of investors and corporate bankers that she was of sound financial standing and worthy of investment? The truth may be hidden in the telling of a good story, indeed in the Netflix series the use of a voice changing app and a SIM card which obfuscated an American mobile number to one from a German network, seem pretty basic tools to use in such a high value fraud. But the truth is, many of the traditional means of identity verification used by institutions are now increasingly old fashioned, with an over-reliance on paper based documentation and analogue methods of verification. We live in a digital world and we need to be able to both protect and validate our identities using digital means.

Could technology have prevented this from happening?

Forged in Jersey from our deep understanding of regulation and technology, Vaiie solutions digitise experiences to enhance the way businesses meet their regulatory obligations. Vaiie has developed a product which uses technology to support the digital verification of a customer’s identity. The product is called Identify and provides technology to support compliance professionals such as those dealing with Anna, with identity verification.

At Vaiie, we have worked with leading industry specialists to build products which solve problems and provide solutions for everyday compliance challenges. We know our clients want to enhance the way their compliance teams operate. They need to reduce the time it takes to onboard customers, verify that these customers are indeed who they say they are and ensure that they have all of the relevant documentation required to satisfy organisational and regulatory requirements.

This intelligent technology can drastically reduce onboarding time, cost and abandonment rates for the client and can also provide enhanced capabilities to reduce the risk of fake documents being accepted. Identify is not just a risk management and productivity tool, it enables businesses to manage how their customers interact digitally with their brand.

Vaiie’s Identify product verifies customer identities in minutes with fast, secure and easy to use ID authentication, facial recognition and liveness checking. By providing a simple mobile-first experience to the client, Identify enables the client to follow a simple and secure process to submit all of the relevant documentation required.

In the context of Anna; we believe that our technology would have enabled the institutions involved to assess Anna’s identity and moreover, would have supported these institutions in quickly identifying that she wasn’t who she said she was. We know that our technology would have swiftly highlighted the yawning gaps in her story and the lack of real substance in the claims made in relation to her supposed source of wealth and financial estate.

Hindsight is a wonderful thing

Perhaps those involved and the institutions they represent have benefitted from the lessons learned in relation to their take-on processes? Undoubtedly, many sleepless nights and tense conversations with regulatory bodies could have been avoided for those who were taken in by the fake heiress.

Whilst we appreciate that ‘Inventing Anna’ is a high profile tale, worthy of its own Netflix series, we also know that there are many unscrupulous individuals exploiting gaps in organisation’s due diligence and KYC processes for their fraudulent financial gain. Other high profile examples continue to be worthy of their own dramatisations; look no further than ‘The Tinder Swindler’ and ‘The Thief, His Wife and The Canoe’ for other incredulous examples.

Much has been discussed in relation to various technical solutions to business challenges: the next “big thing” in technology - that product that will solve an organisation’s problems is always just around the corner. The reality is, it is hard to know where to begin when it comes to defining your business requirements. That is why engaging a Regulatory Tech business will help.

This article was originally published in June’s Connect magazine.