ID verification in Banking Industry– From weeks to seconds

Going into the club, or entering into a restricted area, we are always asked to prove our identity. The proof of identity is the one and only thing i.e. ID card. This scenario is possible in the physical world when a person is present during verification. But what about the digital world? How are we going to prove our identity? Of course not by marking physical presence.

Digital ID verification is the way to do so. With the organizations shifting their business operations in digital space, customer convenience and satisfaction are becoming essential in order to survive a competitive market. Banking institutions are now expanding globally through digitization which means transforming their business operation to incorporate customers from all around the world.

Customer onboarding is the critical and main process of every institution but how digital onboarding is going to work is the main concern of every business.

Traditional Customer Onboarding

Identity verification is an integral part of the customer onboarding process. In banks, customer onboarding means verifying the identity of individuals and the risk factors associated with them. Traditionally everything was done manually, in fact, it still is. The identity verification through documents takes a lot of time probably weeks and months. Due to this, most of the customers just walk away in the middle of the process.

Moving into the fourth industrial revolution, this practice is no longer efficient and reliable. The reason is you can’t expect the customer to physically present you his identity documents and wait for weeks to get verified. The era in which we are living, time Is money. No customer wants to undergo a process that is hectic and time-consuming. Therefore, banks are in dire need of an effective, fast and convenient solution that can address these limitations.

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Customer Onboarding and Stringent Regulations

With the increasing trend of digital frauds and money laundering incidents, the regulatory authorities have tightened reins on banking institutions regarding their KYC policies. As per KYC compliance, the banks need to conduct a customer identification program to ensure the identity of the customers. All these measures are to deter illegal transactions and payment frauds, especially money laundering and terrorist funding.

To comply with these regulations, the banks have designed KYC policies and special teams are hired to efficiently perform onboarding activities. But these operations are quite costly, time-consuming and require a lot of manual effort. According to a report, banks spend around $384 million per year on KYC compliance. Moreover, it involves in-depth customer verification and due diligence that may require up to 1,000 Full-time equivalents (FTEs) to successfully carry out the process.

Henceforth, manual KYC is not a reliable solution for the institution because of global expansion.

Digital Identity Verification for swift onboarding

Digital identity verification services are effectively facilitating the organizations to carry out the KYC process in real-time and provide a seamless experience to their customers. The customer verification that used to take weeks and months is now done within seconds because of AI-powered ID verification solutions.

These solutions do not only verify users’ identities but also critically validate the submitted documents. In manual verification, a human eye can’t identify the tampered/photoshopped document or information, but AI-powered solutions are quite efficient in identifying such forgery. Therefore, hindering the fraudsters from getting on board.

Through automate KYC measures, the financial institutes can generate evidence of a person’s real identity through identity and address documents within seconds. Moreover, the advanced identity verification solutions are incorporating OCR data extraction to automatically fetch information from the documents making process contact-less.

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According to Accenture’s 2016 survey, 73% of the surveyed compliance officers find identity verification – a domain of RPA – a key enabler in compliance, in the next three years. Through ID verification services, productivity can be increased, improving KYC/KYB, AML, CFT compliance processes.

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