Mobile identity verification is not new technology, but the lockdown has made a viable verification system more critical than ever. With so many customers conducting their banking from mobile devices, the risk of application fraud has never been higher.
Fraudsters can use personal information to open a bank account under someone else’s name or use synthetic identities to pose as first-time customers.
An up-to-date mobile identity verification process ensures that the customer being served is who they say they are and that your bank can catch synthetic identities before they become fraud.
Synthetic Identities are Hard to Catch
Fraudsters use synthetic identities to circumvent security measures. They do this to open new lines of credit in someone else’s name, which they intend to borrow on without repaying.
These identities are hard to catch because they establish a history of payments on their credit first before defaulting on it. This convinces the banking institution to treat their failure to pay back their loans as a loss of credit rather than fraud.
In 2016 alone, this strategy cost banking institutions over $6 billion in damages. In light of synthetic identities becoming more difficult to catch, 80% of banks say they will change their application process to fight synthetic fraud.
Many will be tempted to rely on their established KYC measures to catch fraudsters in the application process. However, these measures may not be sufficient to catch application fraud in time.
KYC Efforts are Less Effective When Used Remotely
In the past, banks have relied on their KYC measures to remain AML-compliant and verify the identity of their customers. However, many established KYC measures are most effective when conducted in person and may not translate to mobile banking systems.
Mobile identity verification systems weed out fraudulent applicants in a remote environment. They also help institutions stay compliant and avoid common KYC authentication mistakes, such as restricting the check to low-level documents only. Their verification procedures include:
Mobile license authentication
Optical character recognition
This multifaceted authentication procedure can check within 99% accuracy that the person talking matches their identity on file and that their ID has not been synthesized. These procedures easily integrate with most POS systems and work on a simple point and scan system that streamlines the process.
Mobile identity verification can not only make the application safer for remote environments, but it can increase an institution’s efficiency as well.
Improve Customer Experiences
This increased security and efficiency improves your customers’ experience. A state-of-the-art mobile identity verification system streamlines a bank or financial institution’s onboarding process, making it 60% more efficient.
Once the system authenticates the customer’s license, it parses the data and pre-populates the app for barcode verification. Since mobile banking has risen in popularity in the post-EMV era and especially during the pandemic, an efficient mobile verification system has become an essential part of the customer experience.
The “Digital Identity” is Becoming More Prominent
Since customers now prioritize online banking methods, fraudsters are ready to take advantage of the high transaction volume to commit virtual fraud. After the WHO declared the COVID-19 pandemic, Fintech lenders observed an early surge in lending fraud attacks, largely credited to:
first-party application fraud
third-party application fraud
synthetic identity fraud
Institutions that hope to prevent their customers from becoming part of these rising fraud statistics can use accurate mobile identity verification to prevent fraudsters from successfully opening applications in their name. This also protects the banks themselves from future lawsuits.
Stop Fraud Before It’s Too Late
Intellicheck offers efficient solutions for banks to verify their customers’ identities both in-person,online, or through the call center. Our mobile identity verification system is easy to use and integrates into most existing POS systems, saves your customers time in their application process, and saves banks money by preventing fraud before it becomes a lawsuit.
Mobile identity verification from Intellicheck is trusted by government agencies and law enforcement officers nationwide. Improve your customers’ experience at the same time you lock down the security of your credit by updating your authentication process for a mobile-centric modern age with Intellicheck’s identity verification systems.