In past years, a shift from in-person to online services has significantly impacted the financial industry, requiring a change in customer expectations and regulatory requirements for secure account opening. But just as online banking provides added convenience for customers to open accounts online, it enables customers to quickly abandon the account opening process in response to poor user experiences.
One of the most promising solutions for secure account opening is identity verification, which provides a way for users to quickly verify their identity online to meet compliance and security requirements. This blog post will cover how identity verification services can deliver secure, compliant and frictionless account opening experiences and how Transmit Security’s Identity Verification can help enterprises maximize these outcomes to reduce risk and improve conversions.
Whereas physical account opening requires customers to travel to brick-and-mortar locations to interact with employees, where they can ask questions, complete background checks and prove their identity, digital account opening can be done remotely on customers’ devices, at any time and from any location.
Although this significantly improves the convenience and flexibility of account opening, face-to-face processes give employees the opportunity to not only physically review photo IDs such as passports and driver’s licenses but compare them with the live customer in front of them. With digital account opening, it is much harder to ensure that a live customer — as opposed to a bot or a malicious imposter — is the one opening the account.
The increasing ubiquity of digital services and the need for online access to accounts makes digital account opening capabilities a crucial component of modern banking. But in order to reap the benefits of digital account opening, banks will need to solve several critical challenges:
Online identity verification enables customers to remotely prove their identity simply by scanning a government ID and taking a selfie to prove they are who they claim to be. Background checks with global watchlists may also be incorporated into this process, enabling businesses to easily comply with AML, KYC and other industry regulations for financial services.
However, not all identity verification services are alike: whereas newer services leverage AI-based models to assess the validity of IDs and match selfies to ID photos, legacy models rely on manual checks that do not scale for enterprise use cases or enable the real-time verification today’s users demand. On the other hand, black-box AI-based models that do not provide adequate transparency into the reasons for rejecting user requests can complicate the work of fraud analysts and make it difficult for security teams to fine-tune decisioning logic.
Transmit Security’s platform-native Identity Verification Services provide enhanced security and user experiences while simplifying compliance with industry regulations for financial enterprises and other businesses that must adhere to strict account opening requirements. For each request, Identity Verification returns a fast and accurate recommendation along with transparency into the reasons for denying or challenging a request that analysts can use to investigate fraud claims and security teams can use to detect patterns in large-scale fraud campaigns.
Our Identity Verification Services leverage advanced AI capabilities and natively integrated services for risk, trust, fraud, bots and behavior detection that improve the security of identity verification. This includes:
Form abandonment is one of the key risks of online account opening and is often the result of poor user experiences or security concerns that discourage prospective users from providing their personal information. But while online identity verification can help assuage concerns about security and build trust with users, friction-filled experiences may still cause drop-offs during the account opening process.
To guard against these issues, Transmit Security improves the convenience of identity verification through:
To safeguard the account onboarding process of enterprises that are at a high risk of financial fraud, regulations such as KYC (know-your-customer) and AML (anti-money laundering) have arisen, requiring stricter controls around how regulated enterprises verify customers’ identities.
KYC is part of the broader AML framework and focuses on gathering information about customers during the account opening process to establish customer risk factors and prevent fraud, whereas AML requires the implementation policies and procedures to detect and report suspicious transactions throughout the entire customer lifecycle to prevent money laundering and terrorist financing.
Transmit Security simplifies compliance with KYC, AML and other industry regulations through:
In addition to compliance with KYC, AML and other industry regulations, Transmit Security’s Identity Verification can have a significant impact on businesses, improving profitability and reducing risks. Some of the key outcomes we’ve seen include:
And with the only platform-native identity verification service woven into the fabric of a complete identity platform, Transmit Security enables a reduction in the cost and complexity of implementing identity verification by consolidating vendors — one of the key trends that security and identity leaders are embracing.
As the financial industry continues to shift towards digital platforms, identity verification will become even more crucial in delivering a positive user experience while mitigating fraud risk.
Transmit Security’s Identity Verification Services go above and beyond traditional solutions by providing enhanced security measures, reducing user friction and simplifying compliance with industry regulations. The result is a seamless, secure and compliant account opening experience for users, which ultimately drives higher conversion rates for businesses.
To find out more about our Identity Verification Services, check out our full service brief or contact a sales representative for a customized demo of how Identity Verification can simplify account opening on your application.