You have been investing time and money on optical checks for verifying your customers’ identities. But is your solution secure enough? Are your customers happy with the process, or could conversion be better? We explain why NFC-based identity verification technology reduces fraud and grows conversion.
Customers demand real-time digital services, around the clock. If a service provider cannot deliver fast enough or creates unnecessary hurdles in the process, a digital competitor is virtually around the corner. But you must prevent fraud, ensuring you know who you are dealing with. Not only when onboarding new customers but also in later customer contacts you need to ensure their identity – when binding a new phone for internet banking, proving the right for pensions, or resetting a second factor for your employees. You need identity verification (IDV) as an asset throughout the customer journey. Digital solutions for identity verification have been in the market but have their disadvantages.
Why do current digital solutions, based on optical or video verification, no longer suffice? And why does NFC-first identity verification help you get the job done properly? Modern passports and identity cards are equipped with a chip following the ICAO standard. This chip contains similar information as can be read on the document, but with several crucial differences. All information is digitally signed and cannot be manipulated. Also, the face image is available at a high resolution, without additional watermarks – a good starting point for face matching. Copies can always be detected.
Are you positive that the image of the identity document isn’t rigged? That the person on the other end is there, and the identity document is authentic? Tests have shown that a bit of photoshopping does the trick for identity documents in way too many situations. You do not need expensive equipment or expertise for that. Photo paper and a printer should do the job.
As a consequence, you need to complement that first customer onboarding step with costly, complicated, and data-intensive fraud analyses along the edges of what GDPR would allow. Nobody wants data-intensive fraud analyses if you can do without them.
Optically entered details still must be verified manually sometimes, by a qualified person sitting in an office. That takes time and can lead to repeated questions for your new customer. Recent research found that 10 minutes is a tipping point for many customers to open an account and less than three for transactions. Any manual intervention or iteration will take you way beyond that tipping point. Enough for people to break off the process before completion and turn to more instant alternatives.
It is hard to create a great picture of something as small as an identity card or a driver’s license. When image quality may be poor, it can lead to an incorrect reading of details and misspelled names and dates. Tests indicated up to 10% of words contain errors and that diacritics are usually ignored. When reading the chip, you are certain that all data is correct and has not been tampered with. Signed by the corresponding authorities, no mistakes possible.
Optical identity verification can go wrong quite easily. Someone may have held a thumb over vital information while taking a photograph. Or the sun or light caused glare on the ID card’s plastic, making the displayed information unreadable. People will break off their IDV process halfway if they are unhappy about going through the same process again.
NFC, on the other hand, offers a secure, incorruptible link between an identity document’s chip and our technology. This makes for quick and fault-free data transfer. Anyone can do it, and most of the time, in one go. Our customers have created conversion percentages of over 95%. How much will you save if you get to 95% the first time right?
Identity verification requests can come in peaks that are difficult to predict. Some optical verification methods still require staff to validate exceptional cases by hand. They simply cannot handle a sudden spike in requests, nor can you quickly grow your staff. Fully automated solutions can grow and shrink with demand, almost unlimited. NFC has proved capable of effortlessly and flawlessly handling hundreds of thousands of scans per day. In the age of the instant internet, slow processes and manual steps inevitably lead to losing potential clients and high costs.
More than 160 countries and regions currently issue passports and identity cards with chips, and this number is growing rapidly. Europe and North America are fully covered already, as are Australia and New Zealand, as well as most of South America. Many other countries are considering it, too.
But you want the remaining no-chip countries covered as well. That is why we advocate an NFC-first approach, not NFC-only. For the cases without chipped identity documents, ReadID also offers traditional optical verification through our partners.
It may be less secure, not as user-friendly, but fine as an alternative. So, combine NFC-based with your preferred optical solution, or have us orchestrate the combination if you really want 100% coverage.
Switching to NFC-based identity verification creates a 100% secure, 100% automated, scalable IDV process that creates conversion. ReadID is the leader in NFC-based identity document verification, orchestrating with face verification partners and optical back-ups. Follow a best of both worlds NFC-first strategy by introducing ReadID technology and growing trust through identity verification.
This editorial was first published in our Financial Crime and Fraud Report 2022, which showcases the innovation and development of the best practices and instruments used by financial institutions in their fraud prevention activities, to improve the digital onboarding process of their customers while fighting against financial crime.
About Dr Wil Janssen
Wil has worked as an advisor, researcher, and entrepreneur in digital innovation. Over the years he wrote over 70 publications in magazines and newspapers. He studied Computer Science at the University of Eindhoven and obtained a PhD from the University of Twente. In 2013 he founded InnoValor together with Maarten.
About ReadID
ReadID is the leading NFC-first identity verification technology. It allows users to verify identity documents such as passports, ID cards, and driving licenses by means of NFC on the smartphone. We orchestrate with optical and facial verification partners for non-chipped documents and holder verification. ReadID combines the highest conversion and 100% security.
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