For a seamless Know Your Customer (KYC) digital onboarding process
This ebook provides banks, neobanks, fintechs, and other financial institutions (FIs) with the best practices for delivering exceptional digital onboarding services.
- Discover the eight critical areas to focus on that we have identified during deployments of KYC projects using our solution in the private banking sector.
- Detect key technologies to leverage for a smooth onboarding experience and reduced identity fraud.
- A case study from a US neo bank shows how banks can mitigate attacks using identity affirmation with Gemalto IdCloud, ID verification, and risk management technologies.
Let's sneak peek at some of the actionable takeaways from this guide.
The 8 areas of focus for digital onboarding
FIs need to consider digital onboarding according to these eight areas:
- A user-centric approach
- Strong identity verification technologies
- Best-of-class facial match
- Regulatory compliance
- Enhanced onboarding with risk assessment
- Multi-layer identity verification service approach
- Customer retention strategies
- Digital audit trails
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A user-centric approach: the urgent need to reconsider customer onboarding
The digital-first path is rapidly becoming the "new normal" in banking.
The connected consumer of today expects to be able to open a new account online using their tablets, laptops, and smartphones.
However, many FIs either offer a fragmented approach - where you still have to sign a final document in-branch- or deliver an unfriendly complex online experience.
The result?
Processes are taking way too long and leading to a high abandonment rate. In other words, potential new customers give up and may never return.
ID verification and facial match
The challenge starts with document authentication at the initial phase of the digital onboarding process. Needless to say, the digital authentication process eliminates costly and time-consuming manual verifications. Advanced ID checks will be used for online ID verification and represent a solid barrier to fake IDs. Live facial identification is one of the most important features of online identity proofing. It ensures that the document's actual owner is present during identity proofing.
There's more. ID and selfie checks are complemented with liveness detection.
Liveness detection ensures that a person is physically present and would detect any spoof attack. It's an additional security layer to confirm genuine presence.
FIs should make sure that their provider has extended expertise.
Combined expertise in documents, identification, online authentication, advanced biometrics, and security are essential in ID verification. Managing a rich solution from a single provider is easier than a patchwork of solutions.
Regulatory compliance and audit trail
Banks must verify their clients' identities and backgrounds. They must take the necessary KYC measures to onboard only eligible clients to comply with legislation such as AML6.
They also need to be able to reassess the account holder regularly over time.
Additionally, KYC digital onboarding solutions can help certify that banks comply with regulatory frameworks and national laws when processing information and providing services.
Audit trails will protect banks against legal claims and disputes. Banks can prove they applied all due diligence when onboarding new clients.
But diligence steps can increase the level of friction during customer onboarding.
So, businesses should look for solutions in compliance with industry and government regulations that can be easily integrated and create no disruption to the legitimate customer journey.
Risk assessment and multi-layer ID service approach
A risk-management engine will identify, assess and control threats. It represents a solution that can significantly reduce the risk of fraud.
Risk parameters such as the device, email, and IP address can be analysed, allowing the bank to score the individual more accurately.
This process is called identity affirmation and is key to flagging suspicious activity or fraudulent behaviour.
FIs can define business rules via policy management and decide whether to accept or reject an application for an account.
By combining risk-based identity affirmation with an identity verification solution, FIs can drastically reduce ID fraud at the account opening stage.
FIs need several layers of verification for the onboarding process and usual online access.
With ID verification and affirmation solutions in SaaS mode (Software as a Service), the software is accessible directly from the cloud. It enables FIs to configure the necessary verification flows depending on the results, scores, or business rules that apply to the service.
This pay-as-you-go model provides beneficial cost savings and flexibility.
Cloud services can offer an optimal approach to providing these verification services without FIs having to reorganise their business entirely.
Customer retention strategies
A flexible and evolving KYC identity verification solution that combines best-in-class technologies can help FIs develop a more compelling customer retention strategy as they nurture an optimised user experience.
It makes sense when you think about it.
For example, biometric data such as face or fingerprint can be used for further customer authentication in other services the FI may want to offer during the entire account lifecycle (mortgages, loans, insurance, payment cards, and international remittances).
A comprehensive KYC digital onboarding solution that creates minimum customer friction can be a business opportunity. It should contain all the ingredients to enrich retention schemes.
We hope you enjoy reading this ebook.