Top Fintech Terms You Should Know

Like any industry, fintech — or financial technology — has its own particular jargon. To help our readers with the special vocabulary that we often use in our blog posts, we have compiled a list of some of the most commonly used terms along with their definitions.

AML – A set of procedures, laws or regulations designed to stop the practice of generating income through illegal actions. In most cases money launderers hide their actions through a series of steps that make it look like money coming from illegal or unethical sources was earned legitimately. (Source: Investopedia)

anonymity – Any interaction a user has on the Internet that protects his or her identity from being shared with another user or with a third party.  Different levels of anonymity exist, and examples of anonymity can be seen all over the Internet. (Source: Google Sites)

API – An application programming interface (API) is a set of requirements that governs how one application can talk to another. (Source: readwrite.com)

bank grade ID verification – A term used to describe identity verification that meets the high standards of financial institutions for reliability, accuracy, and security.

big data – Big data is an all-encompassing term for any collection of data sets so large and complex that it becomes difficult to process them using traditional data processing applications. (Source: Wikipedia.org)

biometrics – The process by which a person’s unique physical and other traits are detected and recorded by an electronic device or system as a means of confirming identity. (Source: Dictionary.com)

Bitcoin – Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. (Source: bitcoin.org)

Card not present – Card-not-present (CNP) fraud is a general term for fraudulent transactions when a cardholder doesn’t present a card in person at the time of purchase. CNP generally occurs through mobile payments or online, making it more difficult to prevent and detect.

CASL – Canada’s Anti-Spam legislation (CASL) is the unofficial name of a Canadian law intended to help to protect  Canadians while ensuring that businesses can continue to compete in the global marketplace. It prohibits the sending of unsolicited commercial electronic messages by email, social media, or text message. (Source: Government of Canada)

CFT/CTF – Combating the financing of terrorism (CFT) or counter-terrorist financing (CTF) policies have been put in place by many jurisdictions as a means to prevent, trace and recover illicitly-acquired assets that are the proceeds of crime, and to disrupt and dismantle global terrorist financial and criminal laundering operations. CFT/CTF is often associated with AML when dealing with compliance issues. (Source: Acronym Finder, US Department of State)

chargeback – A refund made by a credit card company to a credit card holder. Chargebacks occur when a card holder disputes an item on one’s credit card statement, usually because he/she claims that he/she never authorized the charge. For example, if a person is a victim of identity theft because someone stole and used his/her credit card, that person may receive a chargeback on all unauthorized transactions. Other reasons for receiving a chargeback include receiving goods late or damaged, or not receiving them at all. (Source: The Free Dictionary)

collaborative consumption – An economic model based on sharing, swapping, trading, or renting products and services, enabling access over ownership. (Source: ScienceDirect)

collaborative economy – The “collaborative economy” (or “collaborative consumption”) is an economic model where consumers use new technology to provide, buy, sell, share or rent goods and services. (Source: Santander)

cryptocurrency – A cryptocurrency (or crypto currency) is a medium of exchange using cryptography to secure the transactions and to control the creation of new units. (Source: Wikipedia.org)

cyberbullying – Cyberbullying is the use of cell phones, instant messaging, e-mail, chat rooms or social networking sites such as Facebook and Twitter to harass, threaten or intimidate someone. Cyberbullying is often done by children, who have increasingly early access to these technologies. The problem is compounded by the fact that a bully can hide behind an electronic veil, disguising his or her true identity. This secrecy makes it difficult to trace the source and encourages bullies to behave more aggressively than they might face-to-face. (Source: WhatIs.com)

cyber identity – A cyber identity is a montage of information taken from a person’s activity on the Internet. This information is aggregated and resolved to a single identity from sources including social login providers, ad networks, mobile applications, e-commerce websites, and social networks. (Source: Trulioo)

Data Exchange – Trulioo’s Data Exchange is a platform available to select global data partners and clients interested in providing access to customer data for electronic identity verification (eIDV) purposes. Data Exchange enables clients and partners to set bid/ask prices for eIDV on a regional basis. Our partners are put at the forefront in valuing their data used to verify global consumers. Through a single integration into our platform, help your users prove their identity on the web, while generating revenue with our marketplace monetization model.

data source – A database of personal information that is used by identity verification/identity proofing services to validate an identity. Examples of data sources include credit bureau records, government records, property files, consumer marketing data, and telephone/utility records. (Source: Trulioo)

eIDV – Electronic identity verification (eIDV) is another term for identity verification or identity proofing.

emerging market – An emerging market is a country that has some characteristics of a developed market, but does not meet standards to be a developed market. This includes countries that may be developed markets in the future or were in the past. (Source: Wikipedia.org)

EMV – EMV stands for Europay, MasterCard and Visa, a global standard for inter-operation of integrated circuit cards (IC cards or “chip cards”) and IC card capable point of sale (POS) terminals and automated teller machines (ATMs), for authenticating credit and debit card transactions. (Source: Wikipedia.org)

financial inclusion – Financial inclusion or inclusive financing is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society. (Source: Wikipedia.org)

fintech – Fintech refers to the integration of technology into offerings by financial services companies in order to improve their use and delivery to consumers. It primarily works by unbundling offerings by such firms and creating new markets for them. (Source: Investopedia)

FINTRAC – The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), Canada’s financial intelligence unit, was created in 2000. It is an independent agency, reporting to the Minister of Finance, who is accountable to Parliament for the activities of the Centre. It was established and operates within the ambit of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its Regulations. (Source: FINTRAC)

geolocation – The process or technique of identifying the geographical location of a person or device by means of digital information processed via the Internet. (Source: Oxford Dictionary)

GlobalGateway – An online electronic identity verification (eIDV) service developed for the international market. Our product was created specifically to help businesses comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) rules and has since evolved to support a diverse range of international electronic identity verification requirements. GlobalGateway is used by e-commerce, finance, insurance, gaming and social media clients worldwide for all their compliance, risk mitigation and age verification needs.

Identerati – an informal collective of individuals, organizations, and companies with a common interest in identity and identity management in a digital and online context. This group is perceived as being among the top influencers and thought leaders in the sphere of identity and access management. The term is often used when referring to the future of the industry usually without naming any members of the group. (Various online sources)

identity proofing – The process of providing sufficient information (e.g., identity history, credentials, documents) to a service provider for the purpose of proving that a person is the same person it claims to be. (Source: Wikia)

identity theft – The illegal use of someone else’s personal information (as a Social Security number) especially in order to obtain money or credit. (Source: Merriam-Webster)

data breach – A data breach is the intentional or unintentional release of secure information to an untrusted environment. (Source: Wikipedia.org)

identity verification – The identification of individuals by using their physiological and behavioral characteristics to establish a mapping from a person’s online identity to their real life identity.

Internet bot – A software application that runs automated tasks over the Internet. Typically, bots perform tasks that are both simple and structurally repetitive, at a much higher rate than would be possible for a human alone. (Source: Wikipedia)

Internet of Things – A proposed development of the Internet in which everyday objects have network connectivity, allowing them to send and receive data. (Source: Oxford Dictionary)

Internet troll – A person whose sole purpose in life is to seek out people to argue with on the internet over extremely trivial issues. Such arguments can happen on blogs, Facebook, Myspace and a host of others. The best thing you can do to fight an internet troll is to not answer or report them. (Source: Urban Dictionary)

knowledge-based authentication (KBA) – A security measure that identifies end users by asking them to answer specific security questions in order to provide accurate authorization for online or digital activities. Knowledge-based authentication has become prevalent in many different types of network setups and across the Internet, where companies often ask users to answer these questions in order to gain access to personal, password-protected areas of a site. (Source: Techopedia)

KYC – Know your customer (KYC) is the process used by a business to verify the identity of their clients. The term is also used to refer to the bank regulation which governs these activities. Know your customer processes are also employed by companies of all sizes for the purpose of ensuring their proposed agents’, consultants’ or distributors’ anti-bribery compliance. Banks, insurers and export credit agencies are increasingly demanding that customers provide detailed anti-corruption due diligence information, to verify their probity and integrity. (Source: Wikipedia)

match rate – In identity verification, a measurement of how often queries on data sources yield sufficient information to confirm an identity. Higher match rates represent more reliable and effective identity verification.

PCI Compliance – Payment card industry (PCI) compliance is adherence to a set of specific security standards that were developed to protect card information during and after a financial transaction. PCI compliance is required by all card brands. There are six main requirements for PCI compliance. (Source: SearchCompliance)

POS – Point of sale (POS) refers to the capturing of data and customer payment information at a physical location when goods or services are bought and sold. The POS transaction is captured using a variety of devices which include computers, cash registers, optical and bar code scanners, magnetic card readers, or any combination of these devices. (Source: Webopedia)

risk-based approach – A process that allows reporting entities to identify and measure potentially higher risks for money laundering and terrorist financing, develop strategies to mitigate those risks, and focus resources in areas that are deemed to be higher risk. (Source: Fintrac)

SaaS – Software as a Service (SaaS) is a software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network, typically the Internet.

sharing economy – An economic model in which individuals are able to borrow or rent assets owned by someone else. The sharing economy model is most likely to be used when the price of a particular asset is high and the asset is not fully utilized all the time. (Source: Investopedia)

social data – Refers to the collective data produced by individuals as they actively participate in online social activities (including mobile).

social login – Also known as social sign-in, social login is a form of single sign-on using existing login information from a social networking service such as Facebook, Twitter or Google+ to sign into a third party website in lieu of creating a new login account specifically for that website. It reduces website registration barriers, allowing users to authenticate using their existing social media identities and pre-verified user accounts. (Source: Wikipedia.org)

social verification – Using a ‘Wisdom of Crowds’ methodology to confirm identity.

spam – Unsolicited, undesired e-mail. Also used as a verb. Spam is the e-mail version of junk mail. (Source: Dictionary.com)

startup – A company that is in the first stage of its operations. These companies are often initially bank rolled by their entrepreneurial founders as they attempt to capitalize on developing a product or service for which they believe there is a demand. (Source: Investopedia)

thin file – “Thin file” is a term used in the credit scoring world to describe a brief credit history. Traditionally, credit bureaus would not lend to people with thin files because they displayed too little experience in handling loans. However, more credit bureaus are considering alternate data — such as the history of utility payments or rent — in making lending decisions. (Source: CreditCards.com)

tokenization – Tokenization, when applied to data security, is the process of substituting a sensitive data element with a non-sensitive equivalent, referred to as a token, that has no extrinsic or exploitable meaning or value. (Source: Wikipedia.org)

transaction review – An administrative feature accessed through the GlobalGateway portal that provides visibility into your verifications regardless of your integration. GlobalGateway customers can repopulate entries automatically, review failed transactions for data optimization, add data sources to boost match rate, and create lists of historical transactions for audits or reports. (Source: Trulioo)

TruDetect – TruDetect is a SaaS, identity verification product capable of scoring the authenticity of cyber-identities. TruDetect evaluates global, Internet identity information and behavior applying proprietary, machine-learning algorithms to determine the authenticity of a profile in real-time. TruDetect can be integrated via an API, web-based UI or batch process and requires only the user registration info you are currently collecting. This SaaS process is invisible to your users and can be utilized at any point in your user validation workflow thereby enabling seamless and effective authentication. (Source: Trulioo)

unbanked – Describing a person or group of people who do not have an account at any bank. Unbanked persons are either paid in cash or cash their paychecks rather than deposit them. Unbanked persons are often poor; lack of a bank account often renders one ineligible to buy a house or take advantage of some social services. (Source: The Free Dictionary)

underbanked – The underbanked are people or businesses that have poor access to mainstream financial services normally offered by retail banks. The underbanked are a distinct group from the unbanked, who are characterized by having no banking facilities at all. (Source: Wikipedia.org)

User as Owner – The idea that personal information, aggregated or stored by an organization can be collected but not released without consumer consent, and this places the responsibility and power into the hands of the consumer. It enables standardized privacy policies that work across borders under the assumption that the individual owns their own personal identifying information (PII). This means that companies and governments can store an individual’s information, but not permitted to use the information or share it without the individual’s consent. User as Owner negates the need for governments to create individualized and quickly outdated regulations that govern the use of personal data. It ensures that policy makers and businesses like Google are not deciding how a person’s information is used in any context. If an individual’s personal information can only be released with their consent, then that person decides what information will be made available, to whom it will be made available, and for what purpose. An organization, government, or institution either providing or accessing an individual’s personal information will be responsible for obtaining permission from the individual before releasing it to third parties. This will create an environment of accountability, which naturally leans in the favor of consumer privacy. Knowing that there are penalties for the mishandling of personal information will spur data aggregators and relying parties to proceed only with the individual’s knowledge. (Source: Trulioo)

validation – Providing specific personal information to prove ownership of the identity for the purpose of identity verification. (Source: Identity Theft Awareness)