Gateway to Digital Economy: How to Remotely Identify and Onboard Customers

(This Part 1 of the series about remote identity verification solutions and how to successfully integrate them into your business. For all parts of the series, click here.)

What you’ll learn in this part:

• The landscape of remote identity verification industry
• Main technologies used in the solutions
• Which sectors are being revolutionized through remote identity verification
  

Only a couple of years ago, the idea of verifying identity fully remotely just with a smartphone carried a lot of inherent risks. How do you make sure a user is genuine? What if their ID is fake or stolen? Can it even be used in high-security verticals such as banking? These were questions we had to successfully deal with when we introduced remote digital onboarding – a way of securely verifying the identity of customers using solely their smartphone.

When we spearheaded this idea with Tatra banka six years ago, those were the main questions to solve. Together we found a solution that allowed the bank to be one of the first in the world to allow opening a fully functional account with biometrics only. At that time, it took 3 to 4 minutes. Now you can breeze through the process in less than 60 seconds. 

During the COVID times, having a functional remote identity verification solution was often the most crucial component of staying in business and maintaining growth despite closed branches. The pioneering technology has become a vital necessity overnight. 

Today, our digital onboarding technology is instrumental in opening millions of new accounts each year and finding new scenarios for bringing trusted transactions to new industries. Integrators we cooperate with worldwide bring in their new ideas of how to use this technology for inclusion or better access to otherwise hard-to-reach services.

Building Reliable Digital Identities

High-security operations involving banks or telecoms do not need just a reasonably good identity solution – they are required by regulators to ascertain they are interacting with a specific person. A simple face match is not enough. At Innovatrics, we use:

• Facial recognition using our own top-performing algorithms that are benchmarked by NIST
• Liveness detection to ensure that the person is not using a photo or a mask to impersonate someone else
• Document OCR to quickly gather all the relevant information from the ID and cross-check them for obvious fraud
• Auto-capture components to get the best picture of both the user and their ID without their interaction
• Confidence score for all operations from matching to OCR to signal the operator how confident the algorithm is in its judgment
• If the legislation allows it, our partners can even cross-check with the citizen registry to quickly weed out attempts made with stolen or forged IDs. 

These services are currently provided by quite a number of companies worldwide. New ones are entering the market every day. The Prism Report, an industry overview of the most important players, shows over a hundred very active players in this space. The few that stand out are those that create their own biometric algorithms and invest in their continuous improvement. Innovatrics is among those luminaries.

The fact that we have owned and developed all our core technologies, including the algorithms in-house for 20 years, now means that we can quickly tune all of these to the specific use case. When COVID struck in 2020, we were able to deliver a tuned algorithm that could identify individuals even with their face masks on. 

Moreover, we added a simple detector of whether a person is wearing a mask or not – useful for monitoring spaces where wearing a mask was mandatory. Having the ability to tune the algorithms to specific demands of service providers, integrators, or end customers means that we are able to address even very specific circumstances. 

For example, when working with a well-known cab-hailing company, we had to adapt a liveness algorithm to the fact that verifications were often made in unfavorable situations: in the dark, during the night inside the car. Normally, this would be solved by a real-time notification of finding a better-lit space, but in this specific scenario, this was not an option. By tuning the algorithm to address this issue, we have increased its overall accuracy as well.

Innovating Business with Remote Identity Verification

At first glance, remote identity verification is mainly a cost-saving measure. In banking, it has reduced the cost of onboarding a new customer in Europe from EUR 150 at a branch to less than EUR 5 using a smartphone. It is also faster and much more convenient. 

Some banks have even adopted the remote identity verification workflow at the branches to cut the processing time and prevent typos with OCR as bank employees do not need to retype the data.

Remote identity verification also brings new opportunities. Our clients have used it to:

• Attract a younger demographic aversive to visit physical branches

Our very first project was aimed at a young demographic approaching services in a mobile-first way. The assumption that students would find the option attractive quickly proved true: in several months, a third of the new clients came to the bank via the app. Three-quarters of those clients were students.

This demographic is targeted by the new mobile-only banks that are able to attract new customers all over the EU or the US. Banks such as Revolut or N26 are called “neobanks” by their traditional competitors and are seen both as a threat and as role models for working with a younger demographic. In other words, if you want to work with the younger generation, you are expected to provide a way of identifying new customers remotely. The pioneering approach has become, in just a few years, the de facto standard.

• Provide services to people in remote locations or the disabled

Countries with large populations are quite often difficult to reach. Brazil, with over 200 million people, occupies an area larger than the whole of Europe. Indonesia and the Philippines, while having lots of citizens, are spread out over thousands of islands. If you want to serve them all, you need a wide and costly branch network – or a reliable remote identity verification.

In the aforementioned countries, remote identity verification solutions have enabled access to large swaths of potential customers for banks or telecom operators. At the same time, reliable biometric verification has cut down often rampant identity fraud rates. The technology has proven a rare win-win-win combination: gaining access to new customers, cutting down operational costs and reducing fraud all at the same time.

Solving the infrastructure conundrum via remote identity verification has also opened access to the often neglected disabled persons. They can now use the benefits of financial or state services even without traveling to faraway branches or state offices.

• Get rid of physical branches while still providing all the services 

Reliable remote identity verification, combined with other technologies, opens possibilities that were unreachable just a few years ago. The combination of digital onboarding and eSIM technology has allowed telecom operators to launch a completely virtual mobile operator. A client downloads the app, verifies their identity and, if their smartphone supports it, can immediately get an eSIM to use with their phone. 

This makes getting mobile service for tourists in remote countries much easier and faster. The operator is still able to keep the service safe from fraudsters.

• Check the ID of drivers in shared economy ride-hailing apps to prevent security incidents

With the shared economy getting ever more present in everyday life, from renting apartments to hailing cabs, trusted identity verification becomes increasingly important. The platforms connecting clients with service providers want to guarantee that both sides of the deal are genuine. After all, the stars given to drivers or renters are a new form of currency, and if they are lost through identity theft, it can mean a loss of income.

On the other hand, clients themselves also want to be sure that they are being served by the person they have chosen via the app. On both sides of the deal, biometrics is the ideal solution for quick, reliable identity verification.

Have another idea that would benefit from remote identity verification? Contact us.

(You can find other parts of the Elements of Digital Onboarding Series here)