Gathering and validating the data needed to comply with Know Your Customer (KYC) is not easy. Documents can be forged. Ownership structures can be concealed. And practices like trade-based money laundering make it difficult to track money flow.
Not only have bad actors become more adept at masking their true identities and activities, but traditional rules-based systems that financial institutions use to identify risk are proving inadequate to handle today’s challenges. The sheer volume of information that must be collected, screened and continually monitored for KYC is delivering a barrage of false positive alerts that are straining compliance budgets and resources.
The volume of system end points continues to multiply as digitisation overhauls financial services’ processes. Increasing volumes of data, coupled with a growing need for more users to have access to data without time or location restrictions, has forced firms to rethink their authentication services.
Increased end points and more valuable information (as firms continue to digitise, more sensitive data than ever before is being placed in accessible data storage) inevitably leads to greater pressure being applied to user authentication systems. The emergence of omnichannel entry options and greater incentives for unauthorised users to attempt to gain access through illegal bypassing of authentication protocols (a much larger perimeter fence, and a more precious commodity to protect) has led to greater stress, and consequently scrutiny, on passwords; still the cornerstone of the authentication process.
Tom Harwood, Co-Founder and Chief Product Officer at Aeriandi discusses the use of voice biometrics within contact centre operations, how this can help combat fraud, and how the technology has wider potential for customer experience.
Recent research from Get Safe Online and the National Fraud Intelligence Bureau (NFIB) found that more than a quarter (28%) of people had been contacted on the phone by fraudsters trying to trick them into giving away personal information. Fraudsters often begin by trying to get victims to confirm personal information they have already identified online. A report from fraud prevention service Cifas found that 86% of identity fraud is internet-enabled, where fraudsters get victim's personal information from poor personal security practices on social media sites. Twitter, LinkedIn and Facebook are treasure troves of personal information that, if left unsecure, can be easily accessed by anyone with a laptop and an Internet connection.
David Poole, Business Development Director, MYPINPAD
Identity and verification are interlinked concepts which have a critical role in the continued digital evolution of retail banking.
From showing photographic ID to completing a transaction in person, to demonstrating proof of address when applying for a financial product, customer ID&V is something long-familiar in retail banking. But these methods of identification and verification still rely on the presentation of a physical document, a practice which defies the nature of digital banking, and conflicts with its main benefits like convenience, speed and remote access.
Consumers are abandoning the branch in favour of mobile apps and online banking. Banks are now in a situation where traditional ID&V methods are being quickly redefined for the digital banking era, especially with the forthcoming PSD2 evolution.
Thomas Bostrom Jorgensen - CEO, Encap Security
After fingerprints, faces, heartbeats, voices and even ears, what is next for biometrics? What new part of the body could be pressed into service as a unique signifier of who we are – without breaking indecency laws?
Biometrics do offer a high level of security, but it’s not an infallible system. In the U.S, 5.6m government employees have had records of their fingerprints stolen. Hackers can reconstruct fingerprints from a high-definition photo. And it has been possible to subvert a facial recognition system simply with a photograph.