Identity verification has always been a key focus for businesses that need to comply with KYC regulations and mitigate the risk of application fraud during in-person customer onboarding. For remote customer onboarding in the midst of the Covid-19 pandemic and the removal of face-to-face meetings and office interaction, financial institutions are hastily looking to digital identity verification to enable them to onboard customers remotely in a secure, efficient and compliant manner.
Lee Bosio, Managing Director of Vaiie – a specialist provider of digital regulatory technology, offers insight into some of the most talked about myths surrounding the implementation of regulatory technology, in particular digital ID verification.
Myth: Video platforms are a suitable substitute for ID verification during remote working
With businesses turning to video platforms like Zoom and Teams to conduct their customer and staff correspondence and interaction during the pandemic, many are known to be using these online platforms to verify the identity of their customers during the onboarding process. These video tools might be sufficient means of keeping businesses, clients and teams connected, but when it comes to the verification of individuals, video platforms expose businesses to heightened risk and should be avoided in remote compliance workflows.
With video platforms, there is no immediate or valid way to check the liveness and authenticity of a document being produced. Despite the pandemic and change of business practices, regulated businesses still need to ensure they are rigorously risk assessing individual customers during onboarding and can explain the conclusions reached. Digital ID verification allows for enhanced security and mitigation of risk through robust technology that works alongside existing KYC and AML policies and procedures to reduce fraud and identity theft.
Myth: Digital ID verification implementation is outside of our budget
Whilst there is inevitably a cost involved in implementing a digital ID verification solution, when discussing the financial considerations of such a project, it is essential to compare its long-term value across the efficiencies and savings that would be generated throughout an organisation as part of a wider digital transformation strategy.
A digital ID verification tool removes paper-based processes and eliminates time consuming activities like archiving. It also reduces the time it takes to onboard a customer and boosts operational efficiencies.
A robust digital ID verification tool can be completed, saved and stored digitally within a matter of minutes saving time, money and human intervention. Imagine what more could be achieved if your compliance function were freed up to handle more complex enquiries, as opposed to spending excessive time onboarding a client?
Myth: All digital ID verification tools are the same
Even though the rate of providers offering regulatory technology solutions is rapidly increasing, not all digital ID verification tools are the same. Some are much more sophisticated, reliable and tailored to existing platforms and software to ensure compliant, real time remote verification can be achieved.
It is important that businesses find a solution that neatly aligns with the high standards of regulation set by the industry regulator. Enabling a successful and effective digital identity verification requires careful consideration of security, privacy and compliance requirements, as well as geographical coverage and vendor capabilities. The process of identifying someone’s ID digitally can now be done seamlessly online through intuitive, user friendly and time convenient technology, reducing customer abandonment rates, enhancing security and delivering an exceptional client experience.
Article first appeared in Business Brief Issue 380 page 42.