Financial and banking services have always been considered a high-risk industry, as it deals with the money of millions of people. For this reason, it is very important for banks and financial institutions to ensure that their employees are not working for them in fraudulent ways. At the same time, banks need to ensure that their customers are not fraudsters either.
In today’s world, where we see so many cases of identity theft and other crimes committed using fake identities, it is necessary for banks to adopt solutions that can help them verify the identity of all their customers. This will help them avoid being victims of fraud and also prevent them from being accused of negligence by their customers if something goes wrong with their accounts.
With the introduction of new technologies such as artificial intelligence and blockchain, identity verification solutions are becoming more advanced than ever. This allows businesses to verify their customers’ identities with greater accuracy and efficiency.
But as a business owner in this industry, you also know that there are plenty of companies out there that offer identity verification solutions. And while most of them do their job well enough, they still don’t offer the kind of advanced functionality that can help prevent fraud and ensure compliance with regulations like GDPR.
If you’re looking for an identity verification solution that can expertly manage all kinds of issues—from fraud prevention to data protection—AU10TIX’s id verification solution is an excellent choice for your business.
To Minimize the Growing Number of Frauds
The BFSI industry is growing at a rapid rate, and the number of frauds is also increasing. The need for identity verification solutions has increased in the last few years. Identity verification solutions can help BFSI companies to minimize the growing number of frauds in their operations.
In 2021, Federal Trade Commission received over 5.7 million reports, which included the fraud reports mentioned above as well as claims of identity theft and grievances pertaining to other consumer issues, like challenges with credit bureaus, banks, and lenders. The FTC received approximately 1.4 million allegations of identity theft in 2021.
According to a recent study by Javelin Strategy & Research, 15.4 million people were victims of identity theft or fraud in 2016. The amount is the largest recorded since the company started keeping track of fraud incidents in 2004 and is up 16% from 2015.
This number is expected to rise as more people turn to online banking and other digital services. Identity verification solutions like biometric authentication are designed specifically to prevent these types of crimes from happening by verifying customers’ identities before allowing them access to any type of account or service you offer.
Growing Online Transactions and Expansion in Digital Banking
The BFSI industry is growing at a fast pace. With the growing number of customers, the industry needs to adopt new ways to serve them better.
The first reason why the industry must adopt identity verification solutions is that they can help in growing online transactions and expansion in digital banking.
As per the World Bank, two-thirds of adults currently send or receive digital payments across the globe, with developing economies accounting for an increasing share from 35% in 2014 to 57% in 2021. As opposed to 63% in 2017 and 42% in 2011, 71% of people in developing countries now have an account with a bank, another financial institution, or a mobile money provider.
A second reason for adopting identity verification solutions is that they can help banks comply with KYC (Know Your Customer) regulations. Banks are required to collect customer information from each customer before opening an account with them. These solutions help banks know who their customers are and whether or not they are eligible to open an account with them.
Improve Customer Experience
It’s no secret that the BFSI industry is facing a major challenge in the form of identity fraud.
This means that companies need to start implementing new strategies for preventing fraud, including identity verification solutions.
Identity verification solutions can help improve customer experience by reducing paperwork verification which requires time and effort. For example, if you’re trying to open an account at a bank or credit union, you’ll often have to fill out forms with multiple pages of information such as your name, address, date of birth, social security number, and more.
Most people don’t mind filling out these forms, but what about when it comes time for them to close their accounts? This is where things get tricky because most banks require you to bring in all those papers again. That’s why it’s important for banks and credit unions alike to invest in identity verification solutions so they can reduce paperwork verification which requires time and effort.
Increase Efficiency and Reduce Manual Labor
Identity Verification Solutions have become the need of the hour for the BFSI industry. With the increasing number of frauds and crimes, it is essential to ensure that only genuine people are accessing your funds. Identity verification solutions help you in doing so by providing accurate data about the identity of a person. They not only reduce manual errors but also increase efficiency and save time.
Particularly at the “trust moments” involved with opening a new account. Americans are less trusting and demand more assurance. According to the IDology 4th Annual Consumer Digital Identity Study, 87% of customers are picky about which companies they choose to do business with when those businesses acquire their Personally Identifiable Information (PII).
As per the same source, security shouldn’t have to be sacrificed by financial organizations in order to provide a flawless client experience. The ideal identity verification solution will strike a balance between risk and the demands and expectations of today’s digital consumers.
It is crucial to eliminate unnecessary friction throughout the identity verification process, as shown by the 93 million Americans who gave up on opening new accounts in 2020 because the process was too challenging, time-consuming, or did not seem reliable.
Summing Up
In the coming years, more and more companies are expected to adopt identity verification solutions to secure themselves in the current digital landscape. A report by KBV research validates that claim. They predict the global identity verification market size will reach $17.8 billion by 2026, growing at a CAGR of 13.4%.
The BFSI industry must adopt identity verification solutions to bolster its security and keep up with the latest trends in the market. Identity verification solutions are necessary for businesses that handle sensitive data or perform financial transactions. They can help to protect sensitive data by ensuring that only legitimate users access it.