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Evolving regulations, partnerships on selfie biometrics for remote onboarding build momentum

Synthetic ID fraud down, but not for long
Evolving regulations, partnerships on selfie biometrics for remote onboarding build momentum

New market research shows the competition around biometric remote onboarding hitting full stride to support the transition to remote processes for an enormous range of activities and transactions. Businesses are taking note, with The Moving Hub standing up a new capability, Signicat partnering up to address European financials’ needs, and a Canadian retailer partnering with Neo Financial.

Biometric onboarding market heating up: Acuity

With the market heating up, Acuity Market Intelligence has published a ‘constellation report’ on the market landscape for face biometrics verification and liveness checks for remote digital onboarding.

The biometric onboarding market has become crowded, with vendors focused on digital onboarding solutions, identity verification platforms, biometric core technologies, and biometric identity platforms, as well as the “big three” biometric identity companies; Idemia, NEC and Thales. The report covers two dozen biometric technology providers, and evaluates them based on innovation and market position.

A new Aite Group report sponsored by TransUnion has found that synthetic identity fraud has actually receded somewhat during the pandemic, but as the global economy bounces back, so will synthetic ID fraud, reaching $2.42 billion in 2023.

The latest data available, from Q3 2020, shows synthetic fraud in the auto, credit card, retail credit card and personal loans markets was $855 million, down from a high of $1.05 billion in the third quarter of 2018.

“The dip in synthetic fraud during the pandemic was a continuation of our 2019 findings that showed synthetic fraud was slowing amid the emergence of solutions that connect personal and digital identities,” comments Shai Cohen, senior vice president of Global Fraud Solutions at TransUnion. “We believe this slowdown was compounded by fraudsters who went elsewhere and could be lying in wait to take advantage of pandemic loan forbearance programs that may not have come due yet. Once synthetic fraud reemerges, which we think it will, companies must be ready.”

TransUnion has also rebranded its flagship identity proofing, risk-based authentication and fraud analytics solution from IDVision with iovation to TransUnion TruValidate. The company also launched its GLBA Synthetic Fraud Model to ensure unwarranted friction is not added to the authentication process.

New AML regulation coming

The latest AML rules do not represent a radical departure from past versions, but may require adjusted AML and KYC programs for financial institutions.

The sixth anti-money laundering directive (6AMLD) took effect in the EU on December 3, 2020, and financial institutions are obliged to implement it by June 3, 2021, according to a bobsguide editorial.

The new rules identify 22 new offences and extend criminal liability to different actors, like company representatives. They also raise the minimum prison terms from a year to four years, and increase financial penalties.

The way to deal with these new measures is by implementing solutions with machine-readable zone (MRZ) scanning and optical character recognition (OCR) for document data capturing, as well as face biometrics and liveness, write Melissa Global Intelligence Managing Director Barley Laing.

Real estate and conveyancing market revs

Movinghub has launched selfie biometric checks of facial images from ID documents to enhance its AML safeguards for mortgage brokers.

The service is backed by ISO/IEC 27001 data security standard compliance, is white-labelled and charged based on monthly usage.

The UK’s HM Land Registry (HMLR), meanwhile, is proposing a draft set of requirements to mandate digital identity checks in conveyancing transactions, The Law Society has announced. More robust ID checks could give conveyancers ‘safe harbour’ in the event of fraud by a client, if the standard for identity checking has been met.

Selfie onboarding availability grows

Signicat has formed a partnership with Mambu, which provides a cloud banking services platform, to integrate the identity verification methods available from Signicat’s identity platform with Mambu through an API call.

The partnership gives financial service providers across Europe biometric technologies for digital customer onboarding and legally-binding electronic signatures.

The deal follows a recent $110 million funding round for Mambu.

Our research into consumer attitudes towards onboarding show that financial service providers are struggling to keep up with consumers’ digital demands—and it is costing them customers,” says Signicat CEO Asger Hattel. “Partnering with Mambu, a fast-growing and strategic partner set to become one of the world’s largest marketplace players, means we can help more providers unlock the benefits of digital identity.”

In North America, Canadian retailer Hudson’s Bay has partnered with Neo Financial to enable its Mastercard customers to open new accounts through their smartphones within minutes with facial recognition, through the Neo Financial app.

The remote onboarding capability is part of Hudson’s Bay’s digital-first strategy, and goes along with enhanced services and tap-and-go payments, which is due to launch later this year.

Neo Financial was founded by co-founders of online restaurant delivery company SkipTheDishes, and the company’s credit card is issued by ATB Financial.

This post was updated at 9:02am Eastern on February 10, 2021 to correct the former name of TransUnion TruValidate.

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