Know Your Customer? Know Your Human. Compliance lessons from Elon Musk’s assault on Twitterbots
KYC stands for “know your customer” and is used to describe banks and other regulated entities’ obligations to perform due diligence on their customers to mitigate the risk of money laundering. It is also part of the broader concept of reputational due diligence that all sorts of companies perform to protect themselves from various risks, ranging from fraud and corruption risk to other environmental, social and governance (ESG) risks.
The Twitterverse was recently abuzz with hashtag #KYH – a hashtag that took up the concept of “know your customer” in a modified form. The hashtag began trending following a cryptic tweet by Elon Musk stating that, upon taking over ownership of Twitter, he would “authenticate all real humans.” What did he mean? Presumably, he will be waging war on scammers and bots.
Financial institutions, government agencies and corporations seek to assess the risk of their business partners by using the concept of reputational due diligence to mitigate such risk. In doing so, they might benefit from using technology. The combination of robust data sources and artificial intelligence like natural language processing, among others, might help identify whether a proposed business partner, be it a vendor, raw material supplier, or customer i) exists, ii) is reputable (or not) and/or iii) presents risks in areas like environmental responsibility, forced labour, cybersecurity or fraud and corruption.
In such a reputational due diligence, social media authentication may play a new role as Pete Viksnins describes in an article recently published. Thus, he welcomes Musk’s intention is to police Twitter and to remove its bots.
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