To deliver true fraud prevention, identity verification solutions must be secure, seamless and scalable. The challenge of preventing customers from dropping off during onboarding persists in banking and payments. Having an onboarding journey with any friction or that is not secure impacts your business, frustrates genuine customers, and in terms of fraud, can give bad actors the opportunity to take advantage of loopholes.
In the conversation about fraud prevention, databases can dominate. But databases are not the single source of truth to use when trying to tackle fraud.
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In the past, the industry could only choose from identity verification solutions that are database-reliant and powered by manual review in the background. Even hybrid approaches of blending manual and digital carries an increased risk that data is not being processed correctly, and ultimately no security over who is exposed to it. There is a greater risk of data theft, data loss or data flight plus the margin for human error increases.
Using digital ID&V solutions that integrate with existing processes, including legacy systems in place, and enhance the user experience by using biometric, document and database checks is the approach the payments industry need to take and to move a database-first mindset.
Like in a sports team, while you are only as good as your strongest player, they still need excellent supporting players to boost their performance.
Everyone understands the risk of fraud and the importance of fraud prevention. What’s needed is education on having a document-led, database-supported approach to strengthen your AML/KYC strategy. The honest truth is that current databases are operating off diluted data that very likely has been exposed or weakened. Organisations should as a rule be matching documents to the document owner, to affirm the results of these databases and connect the data to a real person from a government ID.
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By GlobalDataTherefore, being database-first in your AML and KYC framework is limiting the potential of your fraud program. And who wouldn’t want to have the strongest defence available when so much is at stake?”
Colum Lyons, CEO and founder of ID-Pal,
