ID fraud is big business. In one recent example, as published in the Manchester Evening News, the police caught someone using 160 fake identities to buy high-end mobile devices online, but only after the scammer had managed to acquire phones worth more than £250,000.
Faced with this sort of crime, the incentive for organisations to impose strict ID checks is obvious. But if companies make ID checks too onerous, they will deter potential customers and lose business, so tightening up the verification process brings its own risks.
Clearly companies must take care to strike the right balance between the likely cost of fraud and the risk of losing customers. What’s also clear is that the balance has shifted, making it the right time for organisations think again about upgrading their ID verification procedures.
Shifting the balance
First, while fraud is being committed in person in retail stores, the the risk of falling victim to fraudsters is growing fast as more interactions take place remotely. Customers were deserting the High Street in favour of online self-service options long before the pandemic, but it’s a trend that has accelerated sharply during lockdown. There will always be some customers who want to meet face-to-face in-store, but that’s not where the growth is .
Second, recent developments mean that technology is now available to help organisations make effective ID checks relatively painless for their customers. Armed only with a valid photo ID and a mobile phone, it should now be possible to verify someone’s identity online in under half a minute.
This is a step change in convenience compared to, say, having to turn up in person at a store or (as required by regulators in some European markets) wait at home for hours for a courier to verify your ID face-to-face when they make a delivery – even if it’s just a new SIM card.
Where we are now
Some organisations are ahead of the game, such as challenger banks and fintechs. Some public sector organisations are also on board. For example, UK residents already need photo ID to sign up for the NHS app that provides proof of vaccination.
However, many other organisations are just waking up to what’s now possible. These include traditional banks and telcos, among others. NTT DATA has researched the market and found a best-of-breed solution that can bring these organisations rapidly up to speed. We can also provide all the integration and related project management services to ensure a smooth transition.
What does the customer experience look like?
From the customer point of view, ID verification couldn’t be easier. Using any device with a camera (mobile phone, tablet, laptop or kiosk, for example), simply upload a photo of your ID and take a selfie. You may be asked to say a random phrase while you’re on camera, but that’s it.
All the really smart stuff takes place in the fully automated back end.
- The system initiates liveness detection to assess whether the images are live and taken in real time, perhaps using the spoken phrase or by looking out for blinking or other movements.
- It also checks that the ID document is genuine. UK passports and driving licences are commonly used, but the system supports thousands of different documents and versions from more than 200 countries globally, so you can also use a residence permit or overseas passport, for instance.
- The system then uses facial recognition to match the person in the selfie to the photo on the ID.
The whole process takes just a few seconds. The company gets a full report and the agent – human or automated – gets a summary with one of three outcomes: the ID has been authenticated, more information is needed or the application seems fraudulent.
Details of the procedure can vary to meet the needs of organisations in industries with specific rules on compliance, such as insurance or finance. The entire process is GDPR compliant too.
But the real proof of the system’s success is that 93% of people agree to go through with the automated process when they’re offered the opportunity, rather than opting for a more traditional alternative such as visiting a store or, worse still, dropping out and not coming back.
Making ID checks work for you
The UK has historically taken a more relaxed approach to ID authentication than some of its European neighbours. This has left some of the country’s big-name telcos and banks lagging behind the curve, but that is about to change.
NTT DATA is seeing an upsurge in clients asking for a solution. A combination of our industry knowledge and our proven approach to project management and integration enables us to offer an effective solution that can usually be up and running within three months.
Perhaps the balance of risk for your business means you still want to allow most of your customers free access without ID checks getting in the way? In that case, you can opt to start by applying ID checks only to high-value or especially sensitive transactions. Starting now will set you up to adapt quickly and roll the solution out to smaller transactions when you’re ready.
NTT DATA has already done the hard work of finding you the best-in-class solution. Get in touch to find out more about how we can help.