How Tech Platforms Are Changing Verification and Authentication

To compete in the digital market, financial apps and websites require secure and seamless onboarding experiences. Tech companies have risen to the challenge.

In the finance world, everything’s gone digital. If you’re still trying to verify customers’ identity by asking where they lived ten years ago, or making them jump through manual hoops like sending small “test” transactions to verify a linked account, you’re falling behind.

How you verify identifications and authenticate customers has a big impact on acquisition. Online bank account enrollment has an abandonment rate of 19%, with rates increasing the longer an application takes. The more time it takes a customer to complete onboarding, the higher the chance they’ll take their efforts somewhere else.

Skimping on robust ID verification and authentication isn’t an option. With fraud at an all-time high and AML and KYC compliance a must, it’s understandable that financial institutions tread carefully when it comes to identifying their customers.

Fortunately, a few fintechs are finding ways to help financial institutions ensure security and compliance without sacrificing speed for customers.


The Rise of Identity Verification Platforms

Today’s customers are accustomed to quick, friction-free, mobile experiences. Historically, ID verification in finance hasn’t met that expectation. New tech companies have stepped up to help, using customers’ mobile cameras and other tools to automatically verify IDs and flag potential fraudsters.

It’s one thing to verify that a person’s face matches the photo on their ID, but it’s also important to authenticate that the ID is valid and government-issued. Additionally, it’s critical to make sure that the photo a user submits is taken in the moment and wasn’t obtained at an earlier time or procured by a bot. Ensuring that someone is completing a verification process in-person is called “liveness”.

Some of the platforms helping financial service providers streamline their ID verification and authentication include:

  • Jumio. Jumio uses AI, biometrics, machine learning, and certified liveness detection to quickly verify customers and block fraudsters while meeting KYC & AML compliance requirements. Jumio powers clients like AirBnB, HSBC, WeWork, and United Airlines.
  • Onfido. Onfido also uses AI to assess whether government-issued IDs are genuine or fraudulent using photos of ID cards, then compares the IDs against facial biometrics from a selfie taken in real-time by the customer. Once verified, users are authorized to link bank accounts and access their data within the app. Onfido is behind ID verification for First Bank, TBI Bank, and Revolut.
  • Vouched. Meeting the needs of employers as well as benefits, healthcare, and financial services providers, Vouched’s identification tools detect fraud in real-time without creating friction for customers. The platform uses APIs rather than knowledge-based ID verification, leveraging facial recognition, authenticity, and data matching.

These ID solution providers and others leverage additional data like a user’s IP address, geolocation, social reputation, and more to determine whether someone is who they say they are. National registries are also proving useful in flagging identities which have been reported stolen or belong to someone who is deceased.


Comprehensive Solutions: Verification and Authentication Go Beyond Onboarding

ID verification and authentication play a critical role in financial service onboarding. Banks and other service providers need to know that customers are who they say they are before creating a financial relationship.

Streamlined identity verification can help improve the experience of other key moments in a financial customer’s journey: 

  • High-value transactions. Whether transfers, loans, or lines of credit, high-value transactions should trigger a process that ensures the requested activity is initiated by your actual customer, and not someone else. This is as simple as requiring a new selfie at the transaction request, which facial recognition technology automatically approves.
  • Reduce abandonment. When applying for loans or credit, customers often abandon processes that take too long. With near-instant ID verification, that isn’t a problem.
  • Security. Ensuring that every account belongs to a verified customer and that each sign-in is authenticated increases security for the app and your organization overall. Keep out fraudsters and bad actors to protect everyone who comes in contact with those accounts.
  • Compliance. AML compliance and KYC verification prevent illicit activity, and governmental bodies are invested in making sure financial service providers meet requirements. AML/KYC regulations are complex, but compliance doesn’t have to be. With the help of ID verification technology, finance organizations can surpass requirements for added security.

In the arms race for digital security, modern authentication and identity technology allows financial service providers and their customers to stay one step ahead of the fraudsters.


Build Security Into Your Digital Processes With Kunai

At Kunai, we build digital solutions for financial service providers, from security to stunning user experiences. To learn more about our work and what we can do for you, reach out today.

Tom

Sandeep

Sandeep: Tell me a bit about the early part of your career.

Tom: I spent a decade helping to build start-ups focused on application and database software. This was where I learned how to sell and do business development. I was fortunate to be part of one company going public and another being sold to IBM.

Sandeep: What is something you learned during this time that helped you with consulting?

Tom: I began to appreciate how different customers achieved varying levels of success with the same foundational technology. This made me understand just how critical getting your team and process right can be.

Sandeep: This is something I only came to appreciate years into consulting, especially after the sale of my first consultancy to Capital One.I saw teams in different parts of the company trying to solve challenges like real-time messaging. Same corporate culture, same technology, same internal support mechanisms. Night and day outcomes.

Tom: We saw a lot of the same thing after selling our practice to EMC (sold to Dell in 2015). This is probably the thing I'm most proud of when it comes to the teams I've helped to build: the ability to perform well in a variety of contexts, sometimes in ways that inspires the client team to up their game as well.

Sandeep: Yes. It's particularly cool to see your team succeed in individual ways after an acquisition...consulting skills definitely translate into the corporate environment.

Tom: Totally. We have people who've stayed on at Dell and risen up the ranks, while others took the opportunity to become successful executives at other Fortune 100 companies....or to start their own agencies and startups.

Sandeep: We've both been around a while. My first consulting project was a Y2K thing for Cisco back in 1998. You've been around a little longer than that :). How do you think consulting has changed most during the past five years?

Tom: I think because there is so much infrastructure available now, consulting has become more delivery and outcome-oriented. A better blend of strategic and tactical. Public Cloud has also enabled velocity to increase at a pace unfathomable 5 years ago.

Sandeep: What has stayed the same?

Tom: It's still mostly about people. People who thrive on change and are focused on their personal and professional development. I love that this has not and will not change...it's what I love about consulting.

Sandeep: I know you're adjusting your work style to COVID. You're still a dude who clearly prefers to drive an hour for a socially-distanced hike or outdoor meeting over Zoom any day of the week :) But personal styles aside, what is specifically compelling about a remote agency during the era of COVID?

Tom: Kunai has been remote for years, which gives them an inherent advantage. There is something about the communication and management styles that just works in a way that other organizations are still figuring out.

Sandeep: Yeah, I think what a lot of people fail to realize is that remote work isn't just office work over Zoom. it's an entirely new paradigm. There needs to be an understanding for asynchronous efficiency...and this just takes time and effort to develop. How do you approach remote work and family? What are you learning about separating work and personal time?

Tom: No matter what the form of interaction, Focus. Be present. Quality over quantity. The best weeks are the weeks where I proactively schedule work and personal time. Neil (Kunai's Head of Delivery) shared a great quote with me "With discipline comes freedom." When I am proactively addressing the majority of my professional and personal commitments, I find I earn a little flexibility. A little freedom.

Sandeep: Tell us about a business hero of yours that I may not have heard of before.

Tom: Paul O'Neill is someone you may not know. His work in both the public and the private sector created a profound impact

Sandeep: We are both over forty years old :). How have you learned how to work smarter during the past decade or so? What do you wish you knew about consulting when you were 25 that you know now?

Tom: Consultants want to make lasting change. Lasting change is often not the act of a single person. Today I work much harder bringing others along on the journey.

Sandeep: Last question. What are you doing here? :) Why join a small consulting company this late in your career when you could have a cushy job somewhere else?

Tom: I love a good challenge personally and professionally. When I turned 40, I decided I would run a 10K every Thanksgiving weekend and try to have my finishing time be less than my age. With the exception of one year where I did not run due to a health issue, I have met the goal. I also recently completed the Leadville 100 Mountain Bike race. So, I guess I'm here because I'm a glutton for punishment :) Jokes aside, our customers have a job to do and I intend to put Kunai in a position to execute flawlessly on their behalf. I love committing jointly to audacious goals for our customers and our business.

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