Identity verification plays a significant role in how financial institutions manage to protect their clients’ funds and personal information. With the evolving cybercrime landscape, it has become even more crucial for financial firms to invest in verification solutions to safeguard their data and protect their clients from fraud and identity theft.
Financial firms deploy various identity authentication solutions when onboarding new clients and before authorizing transactions. These steps are critical in ensuring that financial firms are transacting with legitimate individuals.
However, with the shift in digital platforms and electronic banking, conventional identity authentication methods are inadequate to deter fraudulent activities as criminals are using more sophisticated and malicious techniques to infiltrate banking systems and steal client funds and data. By 2020, the total annual expense to a financial institution was greater than $18 million.
Therefore, to protect highly valuable and sensitive data, financial institutions must keep up with industry trends, regulation compliance, and technological innovation. They need to replace outdated, manual checks with modern identity verification solutions when implementing new remote identity authentication processes and improving security and regulation compliance.
Firms must leverage technology to their advantage by using verification solutions such as mobile biometrics for digital identity verification. Facial biometric identification provides companies a more secure and less invasive way to verify if the individual trying to access their services is the legitimate identity owner. According to a 2018 report from the National Institute of Standards and Technology (NIST), facial recognition can match identities with a 99.8 percent accuracy.
Banking organizations can also use digital identity document authentication to complement their facial biometrics solutions. It allows customers to have their credentials verified remotely rather than in-person. This document authentication method asks clients to take photos of their ID documents, such as passport, driver’s license, or national ID, and submit the document image for validation.
Fraud remains a severe threat to all financial organizations and consumers. Identity theft, money laundering, and account fraud continue to threaten the banking sector, particularly if they fail to implement modern, strong security measures. Failure to implement necessary security measures will result in costly consequences. This infographic from Ipsidy discusses more on identity verification and identity document authentication.