Remote Customer Onboarding

All major industries now have a Know Your Customer (KYC) mandate. For financial institutions in the US, the KYC onboarding process is 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, terrorist financing and theft are followed worldwide.

Identity verification is a critically important component of KYC and the process of digital onboarding for banks and financial services.

The Challenges with Remote Identity Verification

Validating every new customer in person is costly, inefficient, and time consuming. Remote onboarding of new accounts is not only easier for banking 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 banking 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 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.

4 steps to successfully combatting fraud in Remote Onboarding

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Validate the customer’s government issued ID and documents
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Ask the customer to take a selfie within your onboarding app. Not upload one!
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Determine facial liveness using IDLive Face — is the selfie a real person or a spoofed presentation using an image, cut out, video or mask?
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If liveness is verified validate that the person pictured in the ID is a match with the person presenting the documents.
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TIP: Take advantage of biometrics to speed up digital onboarding processes for banks and financial services. According to new research released by Signicat, the average amount of time after which consumers abandon financial services applications is 14 minutes and 20 seconds, and 55 percent of potential customers are lost if applications take longer than that to complete.

See how facial liveness works.

New customer onboarding is a “first impression” opportunity for financial institutions – from applying for and receiving a loan to signing up for a credit card or opening a new bank account. Banking customers today expect to be able to easily create new accounts online in minutes, not days. Unfortunately, the digital onboarding experience for banks and financial services is often bogged down by time-consuming steps that frustrate users and even force them to have to call for help or visit a branch.

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According to a report by Signicat, financial institutions are losing almost 40% of applicants during digital onboarding.

Regulated companies must follow Know Your Customer (KYC) procedures, gathering relevant information from applicants as part of anti-money laundering (AML) laws.

Biometric identity proofing with liveness detection is one way to ease compliance with KYC regulations while removing unnecessary user friction in banking and other industries’ digital onboarding. These don’t just simplify the user experience, but also help identity and stop fraud.

More institutions are relying on government issued identification as a trusted source. Face biometrics enables an identity check to ensure the user applying is a match. Liveness detection is critical in the digital onboarding process because it verifies that the user is present, not using a high quality photo, cut out or video representation of the real user in an attempt to fool the system.

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TIP: Take advantage of the onboarding process by using IDVoice to collect voice data (with permission). By adding less than 20 seconds to the process, you now have a second biometric modality for use in delivering highly secure and frictionless authentication.

ID R&D's facial liveness detection confirms liveness in the KYC process. Talk to us and learn more about improving your remote onboarding process with IDLive Face.

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