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.
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:
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.
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:
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.
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.