It can be very time-consuming for individuals or business owners to take time out of their day to visit banks when they prefer to interact with their Financial institutions online. In this article, we will discuss the benefits of eIDs and streamlining cross-border transactions and how they can improve the client onboarding process. The big challenge for banks and FinTechs is to verify documents to prevent fake and stolen when onboarding new clients. This challenge is common across mortgages, auto lending, or purchases that you may need to start a new business.
Customers who work night shifts can find the limited opening hours of the bank and other financial institutions frustrating. Let’s say you want to sign a document, but you work during the opening hours of the banks. This presents a real challenge and the way to solve it is through more online services.
There are a lot of steps involved in loan approval and the process can easily be delayed while waiting for the customer’s signatures. This waiting period can lead to the bank or financial institution losing the client and makes the entire process inefficient. Instead, if banks can conduct verifications online it could be very beneficial to the customer. This can help especially during cross-border transactions. Online eID verification can reduce the need for customers to travel to distant locations to provide signatures. Whenever document verification can be done online, it can improve the overall level of efficiency.
However, to achieve this, banks and other financial institutions need to put security measures in place. Both the individual and their bank would have to start with an online identification process to ensure that people are who they claim to be. This is where online document verification and European regulation such as eIDAS come into play.
What is eIDV?
eIDV (electronic identity verification) uses publically available data and private databases to verify documents for verifying a person’s claim to whom they say they are. eID verification utilizes personal information like name, DOB, Social Security Number, and address among other types of data. The result of an eID verification could result in the person claiming who they are, a partial match of identity, or a fake or stolen identity.
eID verification is used by banks, brokerage firms, credit card companies, lending, money transfer, and mortgage companies to minimize the risk of financial fraud, and comply with KYC, AML, and CFT regulations. Other sectors that use electronic document verification are:
- Insurance companies
- Online gaming
- Job recruiters
- Real estate agents
Use of eIDV in Financial Institutions
Electronic identity verification matches the data that is offered by users to banks and other financial institutions. This information can include name, date of birth, address, and Social Security Number against multiple databases available online.
- Personal documents can be used as a source of document verification. These documents can be driver’s licenses, passports, birth certificates, and citizenship certificates.
- Several databases can be used for eID verification such as public and proprietary, credit bureau data, government databases, etc.
- Data that can be used as a source of verification by financial institutions can include address, postal data, property ownership data, credit bureau data, utility data, government data, etc.
Advantages of eID Verification
There is a certain cost associated with verifying the identity of a person, but it can be much less expensive in the long run to avoid the risk of doing business with individuals who use fake and stolen documents.
eID verification can detect fraud by verifying the passport provided by a customer to verify if a customer is real or not. eIDV can also be used to verify the identities of potential customers and if they are on the international watchlist, politically exposed people list, or on some other lists that can make them a potential risk for banks and other financial institutions.
Electronic identity verification can not only be used to verify documents and customer identities but can also be used to stay up to date with your existing customers. Businesses pay more money for eID verification services that can cross-check databases to authenticate documents and identity.
Why Should Financial Institutions Switch to eIDV?
Electronic identity verification services come with a lot of benefits. Banks, financial institutions, and FinTechs used to spend a lot of time and money verifying identities and documents using manual methods.
With the rise of technology, financial institutions can step away from the collection of POI (Proof of Identity) documents. They can instead conduct this using electronic identity verification by cross-checking information provided by customers during the onboarding process.
eIDV for a Speedy and Secure Customer Onboarding
Using eIDV will improve the customer onboarding process by gathering all the relevant information. The success of electronic identity verification solely relies on cross-checking the data from all available public, private, or government databases.
All the information must match up properly, for example, the name on the customer’s credit card should meet with other documents and the address provided. This improves data security and saves banks and financial institutions from fraudulent applications. To do this ideally, banks and other financial institutions need to have access to billions of data records globally. There are technologies out there that can provide secure eID verification online all while complying with KYC and AML regulations.
How DIRO’s Technology Can Improve the Customer Onboarding Process?
DIRO document verification technology can be used by banks, financial institutions, and FinTechs to verify documents of any kind. DIRO’s technology can capture original documents from the original web source and it can be used to prove whether a document is authentic or not.
Banks, financial institutions, and Fintechs can with user permission access all banks, utility company data, government databases, and private databases and cross-check documents with automated user consent and strong impersonation checks. Using DIRO’s document verification technology, users can access all:
- Online utility companies for verifying proof of address.
- Verify personal Online bank data.
- Online insurance companies to verify coverage.
- Online government portals for proof of income, tax returns, and more.