Technology has brought us all closer together but at times, makes it more difficult to know exactly with whom we are dealing. Accurate customer identity verification is crucial for financial services, especially when the potential for criminal activities such as money laundering is factored in. Regulators are joining in the challenge by specifying how customers’ identities should be verified online, with the new 5AMLD in Europe lending guidance to banks.
In any transaction, especially when money is involved, it’s important to know with whom you are transacting. The internet has brought to banking efficiencies and cost-savings but also potential for identity fraud and theft. Fortunately, banks can make their online dealings with customers safe and secure through digital identity-authentication methods. A unified, across-the-board banking system that is designed well and worthy of customer trust could become the model for all industries.
When A.G. Bell invented the telephone, he had no idea that less than a century and a half later, the phone would be used to talk through—and text, shop, even bank with. Smartphones are small enough to be held in one’s hand and big enough to handle nearly any function. How are banks making fraud-vulnerable processes such as onboarding fast, efficient and secure by verifying the identity of customers?
When the first internet protocol was invented in the 1960s, it was primarily developed for science and industrial purposes, therefore only enabled machines to talk to each other. It had well thought mechanisms that could identify the machines, but it was not designed to enable the secure identification of the person using them.