Opportunity is knocking, will Irish financial institutions answer?
Ireland has been one of Europe's fastest-growing economies in recent years, and it is expected that this trend will continue in 2019. However, this growth has, in turn, led to an increase in fraud and money laundering. In fact that the economic crime rate in 2018 was 49%, practically twice as much as in 2006. But Ireland has not stood still. It has been a member of the FATF (Financial Action Task Force) since 1991, and in 2010 expressed its commitment to the EU’s MLD4 (the European Union's Fourth Anti-Money Laundering Directive) through the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010. The recent update to Irish AML law affirms the country’s compliance with the latest AML directives, and the new language and recommendations in the law offer a new opportunity for Irish financial institutions to offer a safe and compliant onboarding and verification.
Why is this a great opportunity for the financial sector?
One of the updates that Irish AML law includes is more favourable regulation on the digital verification of documents. By allowing electronic verification of ID documents, the latest regulation opens the door for a fully digital onboarding that not only complies with regulations but also offers strategic advantages for financial companies.
Firstly, digital identity verification during onboarding helps to build a relationship of trust between the user and the company, as the user can appreciate the security with which their personal and financial data will be processed. In fact, in Experian’s 2018 Global Fraud and Identity Report, 66% of users stated that "I like all the security protocols when I interact online because it makes me feel protected". In turn, the company can be certain that the person who is identified is really who they claim to be. This prevents data errors, fraud and identity theft, and complies with regulations.
Furthermore, if the process is fast, easy and secure, it provides an excellent user experience. This ease of use can quickly become a competitive advantage for companies who embrace it to win new business from less digitally savvy competitors. Although in recent years much progress has been made in identity verification processes, there is still a big opportunity for improvement in the mobile channel. According to the same Experian study mentioned above, more users own mobile devices (91%) than laptops (83%). However, financial institutions that allow an account to be opened with a fully online onboarding process, and still fewer allow it to be done on mobile devices.
The advantages of digital identity verification in on-boarding
There are currently digital identity verification solutions available that facilitate a flexible and intuitive process for the user. These solutions can instantly verify and authenticate identity documents. By taking a selfie with the camera and using a biometrics-based comparative facial analysis, they can verify that the person looking to access the account is the same person as the one pictured in the document image.
As such, the processes of digital onboarding can not only help comply with the AML regulations in a more secure and efficient way, but it will also help Irish financial institutions to cut their online fraud and attract more customers thanks to a better experience that reduces abandonment. Digital onboarding represents a great opportunity that the Irish financial market has seen and already begun to take advantage of.