Financial institutions need a secure identity verification system that guarantees the identity of the person on the other side of their smartphone making a transaction.
It is incredible to think of the unexpected turn that the world of digital transactions and the acceleration of the digitalisation of everyday processes has taken as a result of the Coronavirus. This is the case, for example, of identity verification of consumers or users in digital onboarding processes, instalment sales of products or services, contracting financial products, accessing online gaming websites and a long etcetera of situations that require knowing who is on the other side.
Previously, identity verifications used to be done in person at a physical location (office or branch). It was a manager of the entity or company who would go through all the documents, ask questions or review records, and then carry out an assessment of the possible identity fraud of the person they had identified. Fortunately, technology has entered the scene, enabling digital identity verification on a large scale, at high speed and from mobile devices for the convenience of users and employees. These digital verification processes enable remote identity verification by taking photographs and/or recording the session, allowing financial services, marketplaces, e-commerce and other transactions to meet the necessary compliance, security and trust requirements online to identify their customers.
However, while technology supports the automation of identity verification for digital services, many organisations have not yet made the switch. Why? For these organisations, the cost of manual verifications may not be considered, as they are already paying staff to perform the task. But do these companies know the true costs of running manual identity checks? Do they know how efficient or secure their current processes are, or how much they could improve their operations by introducing automated digital identity verification?
Cost 1: The human factor
Often, the highest cost to a company is human resources: the salaries and other associated costs to find, train and retain valuable staff. If your organisation uses manual checks, you will need to consider the time required for an employee to perform that check as a direct cost. While that employee’s wages may already be accounted for, the time spent on manual processes is time taken away from other priorities.
Especially if the employee is highly skilled in compliance matters, spending it on running verifications is not making full use of his or her knowledge and talents. In any case, manual verification is a tedious and tedious task that frustrates the higher profiles who are nevertheless often the ones who carry out this process because of the sensitivity of its outcome.
Cost 2: Human error, the great danger for institutions
Automated tools can perform tasks relentlessly, without getting tired or error-prone. The same cannot be said of people. Manual checks involve manual data entry, potentially introducing errors into the process. Errors can cause false rejections of verifications, meaning that data has to be re-entered, information has to be re-acquired, or accounts are rejected outright. Any of these outcomes can lead to increased costs, poor customer experience or loss of revenue.
These errors can propagate through the system. Perhaps someone who should have been rejected as a money laundering offender manages to open an account. Or, an audit trail becomes difficult to resolve because the data is inaccurate. Again, the results can be higher costs, especially if fines are handed out. There is also the risk of reputational damage, which is difficult to quantify, but can be significant.
Cost 3: Abandonment
In today’s online and mobile world, people have become accustomed to instant gratification. They can get an Amazon package delivered the same day or open an account for a new service within minutes.
Having to physically travel to a location is a major impediment to sign-up or contracting processes, especially when an alternative is just a click away. Manual verification processes are not built for the realities of today’s business environment, let alone future opportunities.
Digital identity verification processes enable customer acquisition through online channels such as websites or apps. Business is not limited to working hours or geographic location. For any business looking to grow their online operations, ensuring that an effective automated online verification process is in place is a critical piece of their digital processes.
It is also imperative that the verification process is seamless and relatively quick from the user’s point of view. If the execution of an online transaction is too slow, asks too many questions or is otherwise problematic, the customer will often abandon and move on to a competitor.
An identity verification provider is necessary
While manual verifications are detrimental to digital processes, does this mean that the answer is to create your own automated verification system? It would require finding, vetting, integrating and managing multiple data sources to acquire the identity information needed for matching. It would require creating a set of technology that can quickly verify multiple data fields against multiple data sources, often with disparate information. It would also require implementing extremely high security and privacy protocols to protect the valuable Personally Identifiable Information (PII) it processes.
Fortunately, there are identity verification providers on the market that specialise in this area and carry out all the processes. Therefore, it is just a matter of integrating with the right service provider and start automating your identity verifications.
A global business
Today, consumers can be on the other side of the world or across the street. So when choosing an identity verification provider, an important consideration should be country coverage. Can the provider verify customers from all over the world? Even if your organisation is not receiving customers from a particular country now, any international expansion should not be held back by the requirement to find and integrate a new identity service.
It is not simply a matter of “getting coverage”. Rather, it is about getting the quality of data and controlling the jurisdiction of that data to perform the appropriate identity checks at the speed and scale required.
Trust is the top priority
Identity verification is necessary when carrying out sensitive transactions, such as opening a bank account, for example. Now, with many remote customers, identity verifications are vital for many businesses who want to know who they are dealing with and trust becomes a critical factor.
Human beings are made up of our own unique emotional system. But there is one thing we all agree on, and that is the need to feel confident in everything we do, otherwise we don’t do it. This vitally important need carries over into the world of secure digital transactions especially as they relate to procurement processes. Indeed, we all know that “you don’t play with money“, and when we are dealing with financial matters, trust has to be paramount.
Aware of this situation, digital service providers are faced with a clear commitment: to ensure the trust of users and financial institutions in the digital transactions in which they participate, especially during identity verification.
Both the entity and corporation, as well as the customer, both parties need to feel secure. One, the companies, that the customer is who he/she says he/she is, and thus avoid fraud. The other, the customers that they are protected and secure when providing data, whether personal or financial. How is trust between the two parties achieved? Thanks to a trusted third party, external to both parties, which acts as a secure link: a comprehensive provider of secure digital transactions with the capacity to verify identities from anywhere in the world.