All major industries now have a Know Your Customer (KYC) mandate. For financial institutiions in the US, it’s not just about managing risk, but compliance with Anti-Money Laundering Laws (AML) and the US Patriot Act’s Customer Identification Program (CIP) provision. Similar practices for preventing money laundering, terroist financing and theft are followed worldwide.
Identity verification is a critically important component of KYC and the process of digital onboarding.
Validating every new customer in person is costly, inefficient, and time consuming. Remote onboarding of new accounts is not only easier for institutions and customers alike, but also fits with evolving business models and customer behaviour (when was the last time you went into a bank branch?). But remote onboarding of new customers comes with the increased risk of a fraudster spoofing the system.
Many companies have implemented processes that incorporate facial recognition software. Customers take a selfie and that image is matched against the image on their government issued ID. Unfortunately, it’s possible for bad actors to spoof voice facial biometrics using high resolution cut outs, masks or video. Biometric matching, is useless without knowing that the person being matched is a live person.
