Financial industry is becoming increasingly digitised and globally open. As a result, the demand for remote identification services is growing faster than ever. The goal is to make life easier for you and your customers.
However, while opening your business up to the wider world is great, with this increased reach comes an increased risk of being targeted by fraudsters. There are a lot of scammers out there who are ready and willing to take advantage if they spot even the slightest vulnerability in your system.
What are video identifications?
Having a secure video identification process in place makes it extremely difficult for them to commit any type of identity fraud. It is a major deterrent that will send the criminals packing and give you that much-needed peace of mind.
Video identification is a quick, convenient and incredibly secure method of verifying your customers identity online. Used effectively it can help you to eliminate fraud, speed up customer onboarding and help with KYC / AML compliance.
It is a powerful deterrent for thieves because the process combines human scrutiny with both software and AI machine learning. It significantly reduces the risk of online fraud, as well as helps with reducing onboarding costs and improving overall efficiency. It also helps businesses build trust and stay on the right side of the regulators.
Video identification can also be referred to as:
|video ident||video onboarding||video based kyc|
|videoident||video-chat verification||KYC through video call|
|video kyc||video identity verification||video verification of identity|
With all of these benefits, it’s no wonder that so many businesses are choosing to implement video identification security procedures.
What are video identifications used for?
Identifications on live video are widely used throughout the financial services sector by institutions ranging from banks and lenders to ICO’s and cryptocurrency providers.
An identity verification system based on video allows cryptocurrency providers (as well as other businesses) to maintain an excellent standard of trust and compliance, without compromising on user experience.
Why using video identifications is a good idea
There is a reason why video identification / video onboarding is favoured by countries with the highest regulatory compliance requirements. It simply offers unmatched security when compared to other, more traditional solutions – such as selfie to document checks.
Why can’t I just use selfie to document checks?
You can, however keep in mind they are quite easy to spoof. Because of that they don’t comply with higher level KYC and AML regulations.
Selfie to document checks are performed by having the user take a picture of their ID document and then a selfie. But it’s important to know that fraudsters get very creative. Sometimes cheating those solutions is as easy as scanning a printout of a photo instead of taking a selfie, using a pre-recorded video, or wearing a special mask.
Selfies are very easy to get hold of. The technical expertise that would be required to cheat a video identification system is such that it is highly unlikely to be compromised.
These types of spoofing would never work on video, especially during a video identification procedure where a trained human verification specialist is present, and where everything is recorded and stored. It would simply look ridiculous.
What is the process of video identification?
Getting verified on video is quick and easy. Video identifications take approximately 5 to 7 minutes. The process is simple for both your company and your customers. All the end user has to do is have a webcam, an internet connection, and an ID document.
How it works
The process begins with your customer filling in a registration form on your website (in the usual manner).
The details are then automatically sent to us at Fully-Verified.
At this point, a trained verification specialist will connect to your customer on live video. Using their smartphone or laptop, your customer will then be guided through our carefully designed identification process.
Your customer will be asked to provide relevant ID documents such as a national ID, driver’s license, or passport.
Customers will be asked to show both sides of identification documents where relevant, and also to tilt them in front of their camera to allow for holographic elements to be checked and verified.
Both the documents themselves and the ownership of the documents will be verified by specially trained staff who are not only trained to identify fake or invalid documents but who are also proficient in analysing human behaviour and body language.
In order to eliminate the possibility of human error in identifying and matching faces to documents, face recognition technology is also used, along with machine learning and AI to prevent fraud.
Once the documents and the user’s identity have been verified, they will then be sent back to your site with the verification status.
All video identifications are recorded and stored as an added security measure.
How video identifications compare with physical face-to-face identifications in bank branches
You might think that physical face to face identifications (the way it’s done in bank branches) is the most secure way to verify people’s identities, right?
Physical face to face identifications typically involve one person checking someone’s identity, often by looking at a tiny image on a passport or driver’s license.
The photograph being used could be in some cases as much as 10 years old. This means that the window for error is huge.
The level of scrutiny that that single employee is going to put into that identification is going to vary greatly depending on a variety of different factors.
Their mood and temperament play a role in the decision-making process, as does how busy they are, what other duties they have to perform, how good their eyesight is, the biases in regard to who they consider to be trustworthy, and the list goes on.
Compare that to our system that incorporates automated document scanning, live recorded video, automated face recognition and machine learning. All that technology is there to help our verification specialists who have been trained in fraud prevention and identity verification. And this is the only job they have to do. Verify people’s identities.
Let’s break these elements down a little:
This allows for the identification process to occur in real time and remotely. This is far more convenient for the individual than having to visit a bank branch or post office. Videos are recorded in high resolution, meaning that the person and their features can be seen very clearly. Also, the documents can be seen clearly, scanned, and checked by automated software.
The process of recording a live video is also a major deterrent for thieves and fraudsters. No criminal wants to leave evidence that can trace back to them, and criminals know that recording a live video is a sure-fire way to get caught!
AI and machine learning:
Identity checks that are made possible by using face recognition software, AI and machine learning simply cannot be done face to face. There is also a major time-saving factor. Documents can be scanned and checked far more quickly using these methods than they can by a human being in an office.
The software detects the type of documents and the country of origin, as well as reads all the information visible on the document.
The authenticity of a document is also checked, and this is something that it would be extremely difficult to do for an ordinary staff member who is not trained in spotting forgery. Even if someone was trained to spot a fake document, the process would take a lot longer when carried out by a human as opposed to being back by automated methods.
Specially trained verification specialists.
The training that bank employees and others in the financial sector receive is far from extensive. Furthermore, employees have to juggle identity verification with a big number of other day-to-day tasks.
Combining technology with extensive human training allows for extremely high level of security.
Our specialists are trained in the art of criminal psychology and body language. this means they are much more likely to spot evidence of fraudulent intent. Furthermore, their sole purpose is to verify individuals’ identities. This is their only task, which ensures that their focus is not diluted.
It’s not just video
As you can tell from the previous section, despite the name, video identification is not just about video! It’s actually a carefully designed process that incorporates a variety of different disciplines including criminal psychology and various automated analysis of both biometric features and document integrity.
It draws on the expertise of uniquely human skills (the ability to tell if someone is agitated or fearful for example). But the process also combines this expertise with the best that software, automation and machine learning have to offer.
What are the advantages of using video identifications?
Advantages for your company:
Saving time – Our process speeds up the onboarding process significantly, allowing you to process more applications and therefore increase revenue. Also, there’s no need to spend time managing and training your staff on identity verifications.
Saving money – Identity fraud can be extremely costly. Our process improves overall efficiency, saving you money and time.
Complying with legal requirements – With our system you can rest assured that you’re meeting the necessary anti money laundering and know your customer requirements.
Improved Security – Our system is powered by automation software, machine learning and face recognition technology all happening on lived video. It is therefore far superior to traditional identity verification solutions.
Peace of mind – You can sleep well knowing that your business is fully protected from identity fraud.
Improved data gathering – All interactions are recorded and stored for your future reference.
Advantages for your customers:
Convenience – No trips to the bank or post office! The process can be carried out from anywhere and at any time. All the customer needs is a smartphone, laptop or tablet equipped with a camera ant internet connection.
Smooth and guided process – The process is quick and straightforward, providing a unique customer experience. Each identification is fully guided and takes approximately 5 to 7 minutes to complete.
Real-time processing and faster approval – Real-time processing means that your customers can get verified quicker than if they were using conventional methods.
European legislation: AML directives and KYC
Let’s take a closer look at some of the legislation that financial companies need to be aware of.
Understanding KYC (know your customer) requirements and implementing the necessary checks are an important aspect of onboarding new clients.
It’s not just about compliance with the regulations. It is integral to the efficient running of a business.
Keeping up with constant changes in legislation can be time-consuming and costly.
When you use a video identification solution, you can be sure that the highest level of KYC requirements is met, and that you are operating at maximum efficiency when it comes to onboarding times and compliance costs. You also get the added bonus of improving the customer’s experience.
Previously used methods of identification involving taking pictures of documents and/or selfies are not compliant with the highest level of regulations.
Because it is not deemed highly secure, there are currently no best practices in place in Europe for the use of static images for the purpose of identity verification. The current AML legislation seems to view video as a far superior method for identity verifications.
Below is a list of European financial regulators who already implemented or are in the process of implementing video-based online identification procedures:
- BAFIN (Bundesanstalt für Finanzdienstleistungsaufsicht) – Regulator in Germany
- BdP (Banco de Portugal) – Regulator in Portugal
- CSSF (Commission de Surveillance du Secteur Financier) – Regulator in Luxembourg
- FCIS (Financial Crime Investigation Service under the Ministry of Interior) – Regulator in Lithuania
- FINMA (Swiss Financial Market Supervisory Authority) – Swiss regulator
- SEPBLAC (Servicio Ejecutivo de Prevención de Blanqueo de Capitales) – Spanish regulator
- FKTK Financial and Capital Markets Commission in Latvia
- Finantsinspektsioon – Financial Supervision Authority of Estonia
Which countries already accept and regulate video identifications at government level?
More and more countries are implementing systems that allow for video identification every day. The following is by no means an extensive list, but currently, the procedure is well established in the following European and non-European countries:
Some of the European members states not on this list are currently in the process of amending legislation to allow for the use of video identification, as are several countries outside of the EU. Acceptance and implementation of the process is growing and it’s only a matter of time before it spreads throughout the whole of Europe.
Let’s wrap this up.
Now that you know everything there is to know about video identification and how it can benefit your business what are you waiting for? Get in touch now to discuss how we can help you get started!