36
COMMENT
KYC tech driving the next generation of banks
Jouk Pleiter, CEO and co-founder, Backbase
Banks spend a great deal of money trying to attract new customers. But while massive marketing budgets can bring new punters to their door, actually sealing the deal is a very different matter.
KYC (Know Your Customer) regulations dictate a large part of the customer onboarding process for all banks. From their point of view, onboarding is absolutely critical to get right as it is the riskiest part of the entire relationship, where a customer can effectively be lost before they have even opened an account. Therefore, how a bank deals with the thorny issue of KYC will dictate whether or not it can successfully attract customers in the short-term.
However, to think of KYC purely as a compliance issue is somewhat short-sighted. The simple fact is that a smoother onboarding process should be just a part of a strategy to become much more customer-centric. The ease with which most people can go about many aspects of their lives thanks to digital services (using their smartphones as tickets for the train, having access to millions of songs and movies at the click of a mouse) has set high expectations for banking services.
While using Uber, Netflix and the like is a seamless experience, highly personalised and taking just a few clicks to get what you want, applying for a bank account is quite the opposite. A lot of information is required from the potential customer, the bank has
to perform its KYC checks to verify identity, qualification and so on, all before an account can be activated. A recent report from Signicat found that four in ten consumers had abandoned an application for a banking account. Around 39% of these abandonments were due to the length of time
www.ibsintelligence.com © IBS Intelligence 2017 taken.
So while onboarding processes are not in tune with the 21st century world, banks that are serious about becoming more customer-centric need to look to new technologies that can help to speed things up. With most interactions taking place online, it is only logical that applications should be possible digitally as well, through not only desktop PCs and laptops, but smartphones as well.
In technological terms, the most interesting possibilities for those looking to streamline their KYC processes revolve around biometrics; facial recognition and fingerprints, for example. With many newer smartphones having both high-specification cameras and fingerprint readers, the ability to verify that someone is who they say they are (without having to meet them face-to-face) is greater than ever before. These techniques are also quicker than traditional Point of Sale identity verification techniques, and require no staff training, making them much more efficient and cost-effective.
Looking at the process of how an application could be made through a smartphone, a potential customer could use the camera to recognise an identity document, such as a passport. The NFC (Near Field Communication) reader can then recognise the chip in an electronic passport. Moving back to the camera, this can be used for facial recognition, checking that the person making the application is the same one as pictured in the passport. The camera can also capture movements such as blinking and head tilting, in order to check that the person is actually alive. After this,
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52
