Is the upskilling of compliance teams in financial services the key to delivering fast and effective identity verification?
By Charlie Roberts, Head of Business Development, UK, Ireland & EU at IDnow
With the global pandemic driving the world’s population online, identity fraud is becoming increasingly attractive to criminals. In 2019, even before COVID-19 struck, the UK fraud prevention service – Cifas – recorded in excess of 223,000 cases on its National Fraud Database, an increase of 18 percent on the previous year and a 32 percent rise over the previous five years. And looking ahead, experts predict that by 2021, the damage caused by internet fraud will reach $6 trillion, making cyber fraud one of the world’s fastest growing and most dangerous economic crimes.
Of particular concern for the financial services sector, is IBM’s recent report which revealed that in 2019, it was the most targeted industry for cyber criminals.
As a result, perhaps unsurprisingly, financial institutions are increasingly being thrust into the spotlight when it comes to digital security and protecting the identities of their customers.
These worrying figures are certainly one driving factor in the UK government’s new Digital Identity Strategy Board, which has developed six principles to strengthen digital identity delivery and policy in the country.
So how can financial institutions tackle the growing problem of cyber crime? We caught up with Charlie Roberts, Head of Business Development UK&I at IDnow, to talk about the importance of upskilling inhouse teams in a bid to deliver fast and effective identity verification.
What is the benefit of taking a hybrid approach to identity verification?
We already know the important role technology is playing in the fight against cyber criminality – from biometrics and machine learning to artificial intelligence (AI) – and we recently discussed the significance of supplementing this verification technology with human identification experts. These professionals are able to use their intuition and understanding of human interactions and behaviours to identify when a person is being coerced or dishonest.
However, while these highly skilled and trained identification specialists are playing a vital role in the fight against cyber and identity crime, for some financial institutions, particularly larger banks, they present a barrier.
How will owning the entire verification process benefit financial institutions?
Working on a SaaS basis, typically, identity software vendors provide financial institutions with the software and technology required for identity verification however, the final decision on verification rests with the vendor’s algorithms or ident specialists.
However, many banks want to own the entire verification process, from utilising the technology and software to making the ultimate decision on the identity of a person. By handing this level of control over to the bank, institutions can integrate the verification systems within their own infrastructure, enabling the people that know their brand the best to set their own levels of security and determine what is authenticated and what is declined.
Why should banks consider upskilling inhouse compliance teams?
While working with a third-party verification specialist is the preferred option for some, for others, the idea of upskilling and training existing compliance teams in identity verification is the priority, empowering the bank to own the process and the risk. Long term, it will also provide significant cost savings while showcasing a major investment in talent and people, which will undoubtedly help attract and retain customers too.
Is the time right to invest in inhouse identity verification systems?
With the UK seeking to develop a legal framework for digital identity, it is clearly becoming an increasingly important feature on the governmental agenda, not least to ensure that not only can people feel safe online, but also to deliver faster transactions and ultimately add billions to the economy. As such, all eyes will soon be turning to the safeguards the financial sector is putting in place to help protect the online identities of customers.
Arguably then, now is the time to invest in a robust identity verification system that will not only provide the advanced technology needed to automate the process, but that can help train and upskill inhouse teams to truly deliver an embedded and hybrid approach to identity verification at a time when it is of paramount importance.
Global Banking & Finance Review
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