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How Identity Verification Makes Remote Account Opening Efficient for Banks

Richard Marley
June 13, 2018
3 minutes read
3103

Banks have a lot to benefit from the remote account opening service as it allows them to bring a lot more customers onboard with lesser efforts or investment. There can be many means that can be utilised to provide remote account opening service to customers but identity verification is also necessary to make sure that only verified accounts are created. Remote account opening and identity verification services, when coupled together, can be a useful tool in the hand of banking executives for robust customer on-boarding.

Challenges for Remote Account Opening

There are several ways in which Remote Account opening can pose a serious challenge for banks and their customers. The most important challenge is to choose which medium and workflow must be used to register bank accounts for users. Few of those are mentioned below:

Customer service representatives fill out the paperwork on behalf of potential customers by receiving information over a phone call
Customer can fill out an online form but still have to pay a physical visit to bank branch for opening an account
Customer have filled online forms for opening an account and afterwards, he/she is sent a set of forms at physical address to enter further details like PIN Code, physical proof of accomodation and other related details.

At the end of the day, online services are meant to be provided quickly with an added feature of digital convenience. Studies have shown that in the absence of a user-friendly and really digital account opening service, banks have witnessed a nearly 50% abandonment ratio. It means that half of the users have preferred not to open an online account with a bank just because the process was tedious and hard to follow.

How Identity Verification is the Solution?

Although, this high ratio of abandonment might be caused by a lousy online account opening system but in many cases, it has been witnessed that banks want to ensure the identity and credentials of their potential customers. This leads them to introduce features and steps that make the remote account opening process not-so-remote. Agitation and irritation caused to end users lead to loss of revenue to banks and this potential revenue stream can easily be secured with the help of top of the line identity verification system like Shufti Pro.

A cutting edge verification system like Shufti Pro holds a lot of promise for banks that don’t want to compromise their customer onboarding process with fraud prone and scamming individuals. Shufti Pro uses Artificial Intelligence in order to ascertain the identities of users and authenticity of the documents that they have provided to verify their identity. As Shufti Pro can verify user in every country of the world and check the authenticity of credentials of documents printed in every language of the country, AI powered verification services of Shufti Pro become a real asset for banks who want to launch remote account opening services for their clients.

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Disclaimer: No warranty is herein provided that the information contained in this document is accurate, up-to-date, and/or complete. In no circumstance(s), does such information constitute legal or any other advice. Any person who intends to use, rely, pass-on, or re-publish the information contained herein in any way is solely responsible for the same. We suggest to verify the information and/or obtain expert advice independently if required.

Latest News

News
1803 Arrested in Money Laundering Crackdown Coordinated by 27 Countries
How Identity Verification is the Solution?
In a major money laundering crackdown, European police identified more than 18,000 money mules, arresting a total of 1803 individuals.

On December 1, the seventh European Money Mule Action (EMMA 7) concluded after two and a half months. 27 countries were involved in this initiative along with Europol, Eurojust, the European Banking Federation (EBF), the FinTech FinCrime Exchange, and major companies from the private sector including Microsoft, Western Union, and Fourth line.

The EMMA has been operational since 2016 and the purpose of this initiative was not only to identify money launderers but also the sources of their illicit gains.

According to Europol, the EMMA initiative is the biggest international operation of its kind, where 400 banks successfully reported 7000 fraudulent transactions. As a result, losses counting up to €70m ($79m) were prevented and 324 recruiters were identified.

Europol also claims that money mules are used for money laundering and a variety of online scams, including e-commerce fraud, phishing, SIM-swapping, and man-in-the-middle attacks. These claims are based on the leads that came in from police intelligence and private-sector reports.

Immigrants, students, and those in difficult financial situations are often targeted by giving the hope of easy money. They are approached through various methods including job adverts on social media.

Fraud experts and police issued warnings of an increase in the recruitment of money mules in the pre-pandemic time. A spike was seen in these scams when many lost their jobs during the COVID outbreak.

Recruitment of money mules and the subsequent crimes have called for the police to run regular awareness campaigns like Europol’s “Don’t be a mule” initiative.

Suggested read: Money Laundering Ring Pushed $4bn through 60 HSBC Accounts within 2 Years

Recent Posts

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Top 5 Cybersecurity Trends to Look Out for in 2022
How Identity Verification is the Solution?
With 2022 just around the corner, new developments in cybersecurity are already beginning to take shape. Considering the 600% upshot in cybercrime amid the pandemic, the urgency for cybersecurity is further augmented. Given the dependency of modern businesses on digital solutions, it is safe to say that the corporate world may undergo monumental upgrades. New regulations for cybersecurity updates are inevitable to combat the increasing number of cyberattacks.

According to reports, cyberattacks contributed to losses of up to $6 trillion in 2021 alone, which is the single largest economic upset in history. By 2025, cybercrimes are expected to cost the world $10.5 trillion. As governments work towards elevating their cybersecurity posture, the key criteria here is the extent to which businesses can adopt the best practices.

1. Phishing Attacks to Remain a Major Issue

Although Canada is far ahead as compared to the rest of the world in mitigating cyber threats, 78% of Canadian organizations still faced a cyberattack in 2020. This indicates the catastrophic effect of cyberattacks with numbers rising in the negative direction. The most common type of cyberattacks took the form of ransomware and phishing. Looking at the trends of 2021, it’s clear that hackers and malware are becoming advanced with improvements in technology.

A rise in phishing attacks was observed this year, as fake COVID-19 vaccination drives led to e-commerce fraud where credit card information was collected by bogus online shops. The number of overall data breaches recorded by September 2021 was 1,291, which had already exceeded the total of 2020. In order to avoid becoming the victims of phishing sites and emails, businesses must elevate their identity verification measures and conduct employee training. For this reason, the demand for cybersecurity professionals will further increase in 2022, as companies will need their guidance to stay ahead of their competition.

2. Internal Threats & Cloud Attacks

Trojan horses are rightfully named as they can effectively wipe out a large amount of data. However, the origins of all cyberattacks are not malware, as statistics show that 15 to 25 percent of data breaches were due to the involvement of corrupt employees or business partners. In the coming times, virtual workplaces will further gain prominence and companies will need to be more careful at the same time. Therefore, it is becoming essential for businesses to control access levels for new employees, freelancers, and third-party suppliers.

As the pandemic forced businesses to improvise and follow remote working procedures, a lot of data sharing, communication, and other activities are being conducted through cloud services. Although this enables businesses to stay connected and generate revenue regardless of the location of employees, it has a few drawbacks in terms of cybersecurity. In 2022, cloud services are expected to be used by an increasing number of companies as they strive to adopt virtual or hybrid solutions even after the pandemic’s restrictions.

On one hand, cloud services allow scalability and flexibility in business processes. On the other hand, they create risks of cyber attacks and data breaches. 2020 saw more data breaches through cloud systems as compared to on-premises storage. This means that banks and financial institutions will have to take necessary countermeasures to secure their cloud systems and confidential information. In order to avoid data breaches, businesses must not leave out any gaps in their security systems and raise awareness among their staff to follow the best practices for data privacy.

3. Artificial Intelligence as a Saviour

Considering the cybersecurity trends for 2022, artificial intelligence has become increasingly necessary to establish a strong frontier against cyberattacks. In 2020, 47.3% of companies had a medium to high-security automation level, which was a significant increase as compared to 39% in 2019. The basic concept behind AI comes into play here, as experts suggest that the higher the level of automation, the more secure a business system will be.

An officer in charge of security can make errors like falling prey to a phishing email, but today’s advanced AI systems can easily detect such attacks. Automation of security systems also reduces the risk of internal threats as a lesser number of humans will be able to leak confidential information. Moreover, AI allows much more accuracy in analyzing risk as compared to humans.

4. Securing the Supply Chains

A number of cybersecurity concerns are raised due to loopholes and insufficient security protocols in supply chains. These ultimately give way to numerous false allegations on vendors and third parties. However, the industry has responded to this with a positive approach to improve vendor management as a cybersecurity measure. This is being considered as one of the key focus areas for 2022, starting from the disclosure of business information. Despite cloud service providers claiming that a centralized storage system is far more secure, the coming year will prove that this is not true.

As seen from reports of cyberattacks involving cloud storage, the current business operations actually turn out to be the opposite of secure. Businesses will need to incorporate KYB (Know Your Business) measures to verify their partners, third-party vendors, and suppliers. Unless companies put it all on the table at the start of the collaboration, they are welcoming cyber attackers to breach their data. For example, such exposure was created by Amazon in a reported event where AWS appliance installations were hacked. Therefore, it’s clear that 2022 will see more cyber threats unless work is done to improve security.

5. Identity-based Security Protocols

As the techniques of fraudsters continue to evolve, personal information on digital platforms is becoming increasingly vulnerable to cybercrime. To overcome the theft of financial information, digital banking platforms will need to incorporate identity verification measures. With the new methods of hybrid work and the transfer of major business data to cloud applications, the importance of identity verification is further justified. Although the concept in itself is nothing new, the urgency for cybersecurity will force its adoption in companies.

As most cyberattacks begin with a stolen identity, managing the access protocols will be a key aspect in maintaining a business reputation. Misuse of credentials and data breaches will mean the end of small businesses if the modern cyber attackers capitalize on the loopholes in their system. Business directories and employee registries must be configured with security barriers like 2-factor authentication and transaction monitoring systems should be incorporated to detect suspicious activities.

Key Takeaways

Sooner or later, banks, financial institutions, and businesses will need robust identity verification solutions to eliminate the root cause of cyberattacks. Onboarding of legitimate individuals can only be ensured when the company knows who they are every time they try to access the system. Based on the trends, data breaches and ransomware are not going to be eliminated any time soon.

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How Identity Verification Makes Remote Account Opening Efficient for Banks

Challenges for Remote Account Opening

How Identity Verification is the Solution?

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1. Phishing Attacks to Remain a Major Issue

2. Internal Threats & Cloud Attacks

3. Artificial Intelligence as a Saviour

4. Securing the Supply Chains

5. Identity-based Security Protocols

Key Takeaways

Let’s prove your

customer’s identity

with Shuftipro.

Let’s prove your customer’s

identity with Shuftipro.