The global growth of banks and challenger fintechs based in the western world has long been restricted because of issues related to effective identity (ID) verification. The stumbling block has been large parts of the world’s population, particularly in
Africa and Asia, lacking verifiable private addresses and internationally recognised IDs. This situation prevents financial institutions from carrying out vital ID checks as they normally would, meaning they risk missing out on possible expansion into new
and often burgeoning markets.
Smartphone coverage
There continues to be a huge increase in smartphone usage throughout the world. Africa is no exception with the continent set to see another 300 million new mobile internet subscribers over the next few years. This proliferation opens the door to financial
services organisations based in the west to use all the sources of information the mobile device provides to inform the identity of prospective and existing customers.
Firstly, mobile telephone numbers offer a form of digital identity because people rarely change them. These numbers can be used for dual stage verification, such as an SMS sent to the registered user’s mobile number with a unique code to complete the login
to a secure website or transfer funds.
Secondly, new technology is supporting secure customer onboarding and ID verification via mobile. Today, it’s possible for prospective customers to use a merchant’s app on their smartphone to scan their identity documents – such as a driver's licence. This
scan extracts the prospect’s data from the Machine Readable Zone (MRZ), enabling the financial institution to obtain the correct data electronically. Then checks can be carried out in real time to verify the document.
Also playing an important role in fraud prevention is the IP address of the mobile device. It’s possible to match the location of the phone’s IP address with that of the registered owner – where they are known to live or work. If this information matches
up, it’s likely the registered user is using the phone. However, if the device's registered owner is based in a country different from the information provided by the phone's current IP address there could be fraudulent activity taking place.
However, it’s not just mobile; other new technologies can play a key role in the ID verification process.
Biometrics is becoming an integral part of the ID verification toolkit. Once a customer has passed the ID checks at the onboarding stage, biometrics – which can operate across all devices – can confirm the customer's identity with facial comparison technology.
The issue is basic biometric services can be hackable. For instance, a fraudster could obtain the photo of a customer that might enable them to gain access to that person’s account. It’s why organisations should use a biometric algorithm that checks for eye
movement as part of their ID verification process. This ensures they engage with a real live person, not a static image or avatar, to prevent fraud. Equally important is how biometrics quickly enables customers to access their account or service without responding
to time-consuming security questions or remembering various passwords, thereby shaping a positive experience.
- Access to billions of records in real time
A crucial part of onboarding a new customer anywhere in the world is to have access to a global dataset of billions of records. For real-time ID verification, fraud prevention and data accuracy purposes, it should allow you to perform sufficient cross checks
of the contact information provided by the prospective customers – their name, telephone number, email address, or home address. This dataset must leverage government agency, credit agency and utility records, and access politically exposed person (PEP) watch
lists.
- Social media provides valuable insight
Significant insight can be gleaned from the users social media, such as Facebook and Instagram. Accessing this data within the parameters of best practice data protection for ID verification purposes helps organisations identify users' location and transactional
behaviour to support the ID verification process and prevent fraud.
Today, it’s possible deliver fast, accurate and secure ID verification anywhere in the world using evolving technology, mainly related to mobile. By using this technology in conjunction with accurate contact data from billions of global consumers in real
time, it’s possible for ambitious financial institutions to enter into new global markets and drive strong growth, securely.