How biometrics will help banks maintain “business as usual” — even when it’s anything but
This is a guest post by Kim Martin, VP of Marketing at ID R&D.
Few businesses will escape the effects of COVID-19. Even those well-positioned based on the goods or services they offer are revamping procedures and policies to keep their employees and customers safe.
There’s the well-known proverb, “Necessity is the mother of invention.” It is our great hope that the current adversity leads to innovation and positive change that better positions companies to maintain “business as usual” operations — even in the face of a global pandemic.
Financial institutions face some unique challenges and opportunities in the current environment. Coronavirus concerns have led to falling mortgage rates and according to CNN, refinance applications are up 479% in the US over this time last year. And it’s not just mortgages as US banks get Federal support to pump money into the fragile economy, including extending credit to businesses and consumers.
But what happens in an environment like the one we are in where inquiries are spiking while around the world, governments are requiring brick and mortar retails stores to close or reduce hours? [Shutdowns in Italy, France, UK; OCC guidance for US banks]
Biometrics and remote digital onboarding
We see that COVID-19 will lead to better preparedness to “go remote” — enabling businesses to maintain productivity without face-to-face meetings, travel, and brick and mortar hours. For banks, consumers have long shown an increasing desire for mobile and online options. This trend is growing quickly in Asia, Latin America, and Europe and now beginning to happen in the US. Yet, the number fully embracing Digital Onboarding processes for opening new banking and loan accounts is still low with plenty of room for growth.
Digital Onboarding simplifies access to financial services — not just during a time of crisis but all the time. However, one of the challenges of Digital Onboarding is balancing security and customer experience.
Compliance with Know Your Customer (KYC) and Anti-Money Laundering (AML) requires strong identity proofing. Some platforms enable users to upload a photo of their government issued ID and then use facial recognition to take a selfie that is matched against the ID. However, fraudsters can use high resolution photos, paper masks, video and 3D masks to trick the system. A technology called facial liveness detection closes these gaps to make the identity verification process more secure but not all make it easy.
According to Deloitte, 38% of customers say user experience (UX) is the most important factor when choosing a digital bank. While Digital Onboarding intends to make signing up for new accounts simpler and more convenient, the majority of processes still impose friction that leads to abandonment in the customer journey. Liveness detection is often one of the areas of friction, which is why it’s important for banks and other financial institutions to adopt a facial liveness approach that removes the need for applicants to follow complicated instructions when determining liveness.
Looking to the future
For banks that have not adopted Digital Onboarding, COVID-19 could certainly have an impact on the ability to process new account applications. But the virus aside, offering digital-first banking options has become a “business as usual” strategy for acquiring new customers and growing loyalty.
About the author
DISCLAIMER: BiometricUpdate.com blogs are submitted content. The views expressed in this blog are that of the author, and don’t necessarily reflect the views of Biometric Update.