Regtech helps banks meet increasing compliance while delivering seamless UX at scale

July 3, 2017

Sarah Clark talks to The Banker about how regtech providers such as Mitek leverage the latest artificial intelligence and machine learning advancements to help banks fight rampant fraud, keep at pace with rising and ever-stringent regulation, and still provide a seamless, fast and secure user experience.

Watch the video interview or read the full Q&A below.

The Banker's Joy Macknight interviews Sarah Clark, Mitek’s Identity GM, for View From Money20/20 Europe, a series covering the contributions of women in payments and innovation.

Joy Macknight – What kind of pain points does Mitek address for financial services firms?

Sarah Clark – Mitek’s flagship product is called Mobile Verify, which solves for identity verification. The main use cases we work with financial services providers are helping them with the onboarding of their new customers and allowing their end users to make payments or money transfers. It’s very exciting as Mobile Verify actually solves for numerous pain points all at once.

One of the big themes at Money20/20 Europe this year has to do with regulations; they continue to grow and it’s critical that financial institutions are in compliance with Know Your Customer regulations. That means that it’s imperative that they know the identity of the person on the other end of a transaction such as the signing of a bank account or processing a payment. Mobile Verify helps to solve for that.

Related to that is fraud. As banking and financial transactions have gone digital, so has fraud. We have measured increases in fraudulent account openings in digital channels, so as financial firms embrace the digital trend, it’s important that they keep fraud levels at the same or lower levels than they are today. And Mobile Verify helps solve for that.

Last is user experience. You need to do all of this and deliver a best-in-class user experience through digital and through mobile. It’s a real differentiator if you can do that and Mobile Verify really focuses on the user experience.

Compliance, fraud, user experience and ultimately, help driving top line growth; these are the major pain points our identity verification technology helps financial services providers solve.

JM - Given the huge growth of mobile payments and mobile commerce, what are the biggest challenges banks are facing?

SC – In general, the main challenge is knowing who you are dealing with at the other end of a mobile or digital transaction and furthermore, doing so in a way that meets the end-user’s expectations which are fast, real-time, and seamless.

Mobile Verify allows an end-user to scan their ID and take a selfie; it’s a very simple user experience. But, in conjunction, it adds a higher level of security through identity confidence. We are shifting away from asking a user to answer cumbersome questions to identify who they are to a more secure method, based on using really fun features of a mobile device. We are allowing consumers to use their smartphone’s camera and take a selfie to identity who they are in a more secure and more user friendly way.

JM – What are your biggest takeaways from this year’s Money20/20 Europe?

SC - First and foremost I’m excited to be here and meet with our customers to continue to bring them products and features to meet their needs. Also, there are numerous talk tracks on artificial intelligence. Our platform is built on the latest AI, machine learning and deep learning; that type of technology has become really mature over the course of last years and it’s a key component of regtech. I’m really interested in hearing about the latest and greatest from others in that space.

Of course, there is much talk about regulation such as the AMLD4, which has just come into force. The AMLD5 is on its heels, PSD2 is here too… Relevant regulations for financial services providers keep to grow and Mitek is always looking for ways to help them solve for that need to meet compliance while creating a great user experience.

JM - Have we reached the tipping point for regulations? How is regtech helping financial firms to comply?

There are a lot of new regulations but these are needed, they solve real problems. The recent anti-money laundering regulations, for example, are solving for gaps with respect to the misuse of financial instruments.  

We have reached a tipping point where it’s no longer feasible for banks to keep up with this increasing volume of regulations through manual, very inefficient, and very expensive processes which don’t meet expectations for seamless user journeys. The rise of regtech is definitely related to the rapid growth of new regulations. The flipping side is that regulatory technology such as ID document verification has really become mature. It makes sense for banks and other financial services providers to save time and money when solving additional regulatory and compliance requests by outsourcing these to regtech providers such as Mitek.  

At Mitek we leverage regtech such as biometrics, deep learning, and AI and specialize in solving identity verification in the digital channels, a key component of that increased demand to comply with ever-stringent regulations. We strive at doing it right, making it easy, and offering cloud platforms and easy APIs so banks can continue to be successful and do it at scale.

Watch Interview