Digital identity solutions and biometric technologies hold much promise when it comes to helping financial institutions (FIs) streamline their customer verification methods, but one survey revealed that banks could be doing much more to ensure they are getting the most from these tools.
The survey found that 30 percent of FIs — even those leveraging a host of digital ID solutions — still require existing customers who open additional accounts to complete applications wholesale rather than providing a simplified process. This illustrates that myriad banks must overhaul their customer verification methods or risk seeing their customers switch to competing FIs that can offer them financial services without requiring cumbersome, manual interactions.
The March edition of the Digital Identity Tracker® explores how FIs are revamping their customer verification strategies during the pandemic and how biometrics and other tools can ease the customer experience while maintaining security.
Around The Digital ID Space
Consumers expect digital financial services to operate smoothly, but research suggests they still face challenges when verifying customers’ identities online. A FICO survey revealed that 51 percent of banks in Canada and the United States require customers to prove their identities by visiting branches or posting copies of documents — even when they open accounts on the web. It also determined that while 49 percent of respondents used digital methods to verify customers’ identities when opening new accounts, just 16 percent tapped tools that allowed consumers to securely open accounts online in real time.
The financial sector is far from the only area seeing an increase in the usage of digital ID solutions that leverage tools like biometrics. The U.S. Customs and Border Protection (CBP) agency reported that it used facial recognition scans on 23 million travelers in 2020, for example, up 21 percent from the 19 million it scanned in 2019. The agency said the scans had a match rate of more than 97 percent last year and helped its officers discover seven impostors at airports and 285 in other settings.
Nations have also launched digital ID initiatives designed to deliver financial aid to residents hit hard by the pandemic, with evidence suggesting that biometric-based identification measures could be particularly suited to the task. A World Bank report examined how such solutions could be used to help governments accurately identify pandemic-related aid recipients and factor into nations’ vaccine delivery plans. The Washington, D.C.-based international nonprofit announced that it had pledged more than $700 million toward efforts to boost the implementation of digital identification and civil registration initiatives last year.
For more on these and other digital identity headlines, download this month’s Tracker.
TD Bank On Why FIs Must Accelerate Digital ID Verification Adoption
Many U.S. and Canadian banks have traditionally required customers to open accounts in person at branches. The pandemic is changing the game, however, forcing FIs to reexamine this practice as more consumers turn to digital banking. Biometrics can offer not only seamless ID verification and streamlined customer onboarding experiences — they also provide frictionless security in real time for banks that have to meet customer identification program (CIP) and know your customer (KYC) requirements.
In this month’s Feature Story, Angel Kadelski, head of U.S. mobile banking platforms for TD Bank, discusses why the future of digital ID verification involves using a combination of solutions to address these two needs.
To get the full story, download the Tracker.
D
eep Dive: How ID Verification Tools Can Help Banks Streamline Digital Onboarding
The pandemic has prompted consumers to seek the convenience and safety of online and mobile banking solutions, but many banks still require consumers to visit branches or submit paper documents to prove their identities when opening online accounts.
This month’s Deep Dive examines how banks can use digital ID verification to streamline the online banking experience for users and prevent them from abandoning account setup.
Read the full Deep Dive in the Tracker.
About The Tracker
The monthly Digital Identity Tracker®, a PYMNTS and Jumio collaboration, offers coverage of the most recent news and trends in the digital ID ecosystem.