Financial institutions are at significant risk of fraud if they do not verify documents. Scammers use a combination of counterfeit and stolen documents to deceive credit card companies, banks, and loan agencies to extract money. When fraudsters are granted loans or credit cards, they disappear with the funds, leading to multiple defaults that can potentially bankrupt a financial institution.
This problem persists in the finance world. Identity fraud alone resulted in losses of $43 billion in 2020, a staggering increase from the usual $13 billion. In addition, the pandemic has led to a surge in fraudulent activities, including false unemployment claims.
Remote document processing has revolutionised the finance industry, enabling faster application processing and improving customer service. However, this convenience has a significant drawback, as the ease of submitting documents can lead to a pile-up of work.
Furthermore, the need to verify documents before processing can cause ongoing headaches. Fortunately, advancements in AI have resulted in powerful document verification tools, streamlining this process and reducing the burden on finance professionals.
What Makes Document Verification an Essential Process?
Document verification is critical during the customer onboarding journey, enabling organisations to quickly and securely verify new customers by validating their ID documents. This is especially crucial for high-value transaction-oriented entities such as banks, financial organisations, and cryptocurrency companies.
For these organisations, it’s imperative to have complete certainty about the identity of their new customers when reviewing and verifying new account applications. Document verification is vital in ensuring efficient, secure, and trustworthy customer onboarding.
To verify the authenticity of official documents, document verification technology scans them for security features such as watermarks, holograms, stamps, and fonts.
This process is especially important for businesses that sell age-restricted products and services, such as wine retailers and car rental companies. By ensuring the accuracy and validity of these documents, organisations can mitigate the risks associated with fraud and identity theft.
As more customers conduct transactions with organisations online, document verification has evolved to keep up with the changing landscape. Verifying ID documents manually is not only time-consuming and error-prone, but it can also be prohibitively expensive to maintain a team dedicated to this task.
Enhance Customer Onboarding Experience
Organisations have made significant efforts in recent years to enhance the customer onboarding experience by simplifying the customer journey and minimising friction. However, while speed is a critical factor for many customers, trust and security are even more important when it comes to submitting Kyc documents and opening new accounts.
According to GBG research, customers consider a combination of speed, trust, and security when transacting with a business. This mismatch of expectations has left organisations uncertain about which customers to trust. At the same time, security concerns are causing some consumers to feel anxious when transacting online.
In the pursuit of removing friction, many organisations have overlooked a surprising truth: customers don’t just tolerate friction, they actually expect it. To achieve this, businesses must balance convenience for customers and protection against identity fraud.
Earn Customer Trust
Organisations are increasingly interested in using identity verification services to rebuild customer trust while maintaining a convenient experience. To ensure that the wrong customers are not accepted, document verification services are being examined to instill confidence in consumers.
Several technologies, such as Smart Capture and Optical Character Recognition (OCR), are showing promise. Smart Capture utilises the camera in a user’s device to automatically recognize the identity document type.
By implementing these technologies during the customer onboarding, organisations can provide consumers with a sense of security while also obtaining the data needed to trust newly onboarded customers. Furthermore, these technologies can be configured and layered based on customer preferences regarding friction. For instance, older customers may prefer manual form filling, while younger customers may prefer alternative routes that make greater use of technology.
To summarize, document verification is crucial for high-value transaction-oriented entities to ensure secure and trustworthy customer onboarding. As more transactions are conducted online, the process has evolved and now requires a balance between speed, convenience, and security.
Advancements in AI have resulted in powerful document verification tools that streamline the process and mitigate the risks associated with fraud. By implementing these technologies, organisations can enhance the customer onboarding experience, earn client trust, and ensure efficient and secure operations. As technology advances, document verification’s importance in the finance industry will only continue to grow.