Enhancing Digital Onboarding: Securing Personal Data with On-Premises ID Verification

As companies increasingly embrace digital methods for onboarding, managing personal data securely has become a significant challenge. The public's wariness of data misuse, heightened by events like the Facebook-Cambridge Analytica scandal and the implementation of GDPR regulations, underscores this concern. People are growing more cautious about sharing their personal information, preferring to keep it within trusted institutions like their banks rather than with third parties.

Studies reveal that while many individuals are open to sharing their data for personalised services, only a small percentage are comfortable doing so with their bank if it involves third-party access. This highlights a strong trust in banks compared to external entities. To uphold this trust, banks need to ensure the robust protection of personal data and address concerns about third-party misuse. One effective method is implementing an on-premises ID verification system, which keeps all customer data stored securely on the bank’s own servers and avoids transferring it to third-party systems.

A number of such solutions has been developed over the recent years, offering rapid and secure software for verifying identity documents and biometrics, alongside forensic equipment for authenticating documents and banknotes. This approach helps address several types of fraud. For instance, new account fraud, which is prevalent in accounts opened within a day, can lead to substantial financial losses. By enforcing mandatory ID verification, banks can protect legitimate customers and thwart fraudulent activities.

Presentation attacks, where fraudulent objects or human traits deceive biometric systems, are mitigated through advanced onboarding features like biometric checks combined with NFC chip data and document verification. Wire fraud, involving unauthorised access to bank accounts by third parties, can be prevented by incorporating additional security measures such as biometric verification during and after account registration.

Similarly, sleeper fraud, where individuals misuse credit cards with a history of normal use, is countered through rigorous ID verification processes. Synthetic fraud, which involves creating false identities from a mix of real and fake information, is addressed by comprehensive identity verification that includes RFID data, biometric checks, and government ID validation.

Adopting a fully on-site ID verification solution brings several advantages. It enhances scalability by allowing remote account openings, improves cost-efficiency by reducing errors and administrative burdens, and boosts competitiveness through an enhanced customer experience. By maintaining all data handling in-house, banks not only improve security and address data privacy concerns but also foster greater customer satisfaction and loyalty, paving the way for expanded business opportunities.