Hide and seek is fun when you’re five, but it’s a tedious cat-and-mouse affair after you grow up and it turns into an interminable bout of whack-a-mole with invisible thieves.
“Invisible” is the operative word here, as the tsunami of remote onboarding triggered by COVID lockdowns has given fraudsters yet more cover to add to their anonymity. But that’s about to end.
PYMNTS’ December 2020 Digital Identity Tracker®, done in collaboration with Jumio, delves with enthusiasm and deep detail into the burgeoning field of video-based KYC, highlighting a number of compelling use cases from around the world that showcase its effectiveness.
As the new Digital Identity Tracker® states, “about 40 million bank customers in Thailand are expected to register for digital identity authentication under the country’s National Digital ID (NDID) program, which was recently expanded to more financial service providers. The Bank of Thailand, the nation’s central bank, announced the expansion, which was done in collaboration with the Securities and Exchange Commission, the Office of the Insurance Commission, the Electronic Transactions Development Agency (ETDA) and the National Credit Bureau (NCB).”
The central bank’s assistant governor, Siritida Panomwon Na Ayudhya, expects half of Thailand’s 80 million deposit accounts to be registered for NDID digital authentication, giving a sense of the scale of the rollout of video-based KYC and facial recognition now ramping up.
Seeing Is Believing
Battling remote onboarding fakery may be the face of this initiative, but video-based KYC as part of a robust identity verification strategy covers a good deal more than that.
Per the Digital Identity Tracker®, “video-based KYC enables FIs to safely onboard customers in a convenient, contactless way while the pandemic requires social distancing. Another key advantage is that video ID can reduce verification time from days to minutes.”
“Onboarding corporate customers for business accounts, for example, can take even as long as one month, and these lengthy waits are quite costly for large FIs, amounting to more than $500 million annually spent on due diligence,” the Tracker adds.
There’s also the issue of too little due diligence in slapping banks with steep fines, to say nothing of otherwise desirable account holders who bail on a friction-laden process. That’s expected to cost banks an $168.9 million by 2025, according to the new Tracker, and “FIs that leverage video-based KYC can reduce customer onboarding costs by as much as 90 percent.”
Timing Is Everything
In a time of transition and upheaval for legacy banking and its customers, with distrust of systems at an all-time high, solutions like video KYC are bringing stability and reassurance.
“In a number of European, Latin American and Asian countries, regulations allow banks and other FIs to use video-based customer identification for KYC, enabling customers to remotely onboard instead of requiring them to physically visit a branch office,” Philipp Pointner, chief product officer at Jumio, told PYMNTS. “We are in a time when people do not want to visit a bank branch to open up new accounts. With video-based KYC, onboarding time can be cut from days and hours to minutes.”
“Speedy, secure onboarding is vital at a time when consumers have to use digital banking to prevent health risks,” per the Tracker. “Online account openings increased by as much as 15 percent when social distancing mandates were implemented, and one study revealed that 73 percent of U.S. adult consumers are more likely to use digital banking in response to these mandates.”
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