Imagine being able to virtually verify a prospective customer’s identity instead of wading through paper documents you had them supply in person. Now, stop imagining – the technology is real.
For a diverse range of businesses that need or want to verify a customer’s identity prior to completing a transaction – financial service providers, conveyancers, lawyers, credit bureaus, retailers, travel agents and so forth – verifying customer identities has been a painful experience for all involved.
Customers are often forced to submit documents in person during work day or join the lengthy queues at their local post office. Business owners would then spend considerable time tracking and receiving these documents, processing and then storing, destroying and returning them as required.
However, technologies currently being rolled enable customers' identities to be verified remotely – at the click of button.
“We offer a very pragmatic opportunity for businesses to improve their customer onboarding experience at reduced risk and cost,” explains Stuart Hosford, managing director in the virtual ID provider, e4 Australia.
“This is a unique proposition given that customer convenience and regulatory compliance are most often not complementary in their objectives. What is currently a convoluted and lengthy process will become a seamless digital experience that can be completed in five minutes or less, from anywhere with an internet connection.”
While the Australian arm of e4 has only been launched and is focusing its efforts initially on residential mortgage applications, Mr Hosford says the global e4 group already operates in a wide range of sectors.
How does virtual verification of identity (VOI) work?
As Mr Hosford explains, virtual VOI is essentially a three-step process:
Step 1: the business, as the one wanting to verify a customer’s identity, schedules and initiates a call on the customer’s mobile or tablet.
Step 2: during the call, the customer provides consent for photos to be taken of themselves and their relevant documents by the business. This is done through the e4 platform, rather than the device itself, meaning personal information is not stored on the device’s camera.
Step 3: the business authenticates the location of the device and initiates a biometric facial match and authentication of the supplied documents, using a range of official sources. This is all completed during that one phone call.
What are the benefits of virtual VOI?
According to Mr Hosford, there are several key benefits that come from virtually confirming identities compared with the traditional, manual method. These are:
• Reduced risk and enhanced compliance – particularly important for financial service providers
• Better record-keeping potential for the business
• Convenience for the customer
• Reduced cost for both parties
What does virtual VOI mean in reality?
While other companies operating in virtual identity checks span a range of sectors, Mr Hosford says that e4 is specifically looking to partner with brokers and lenders (apart from the big four banks) to simplify the application for residential mortgages.
“Brokers are striving to do some of this already, but leaving themselves quite exposed when they do anything of this digitally because they have no proof of record, so this is something that adds value to them immediately,” he explains.
“The fact that then we can connect with lenders and they will consume this in the process and make it two weeks shorter (because you aren’t waiting for the customer to do their identity verification) is great for them. They know that they will get the commissions quicker, the customer will be happier, and it’s a better experience all round. So, the response from broker and aggregator has been hugely favourable.”