Identity verification and KYC trends in financial industry – ways to enrich a poor KYC process

Friday 29 March 2019 08:21 CET | Interview

Barley Laing, the Managing Director of Melissa Global Intelligence, discusses the latest ID verification and KYC trends and developments in the financial industry

How would you describe Melissa for those who are not familiar with the company?

Melissa is a leading provider of global identity verification solutions, utilising innovative technology to provide our clients with a data-driven competitive advantage and enhanced Know Your Customer (KYC) and Anti-Money Laundering (AML) processes to help combat fraud.

How can financial institutions that are looking to comply with AML take advantage of Melissa’s services to deliver on the customer’s expectation for convenience, speed and simplicity, while also mitigating the risk of fraud?

21st century customers expect quick and secure financial service provision – if the consumer experience is poor, they will move to another provider who can deliver a better outcome. Melissa offers a range of global identity verification solutions that are easily integrated into existing customer service platforms and IT systems. Melissa’s solutions range from ‘proof of address’ check to full biometrics that authenticate customers in real-time. Using Melissa enables organisations to retire costly legacy systems, reduce headcount for manual review, and avoid reputational risk. Regulatory AML checks are completed in a fraction of a second, where manual review could take days to complete. By using Melissa, access to global identity data, sanctions and watchlists are one click away – speeding the processing of applications. AML Screening is an important step in determining the risk of an individual, to make sure business is not being conducted with those committing money laundering or financing terrorism. Melissa screens against global sanctions and PEP checks (Politically Exposed Person), a database containing information on world leaders for 200+ countries.

A cornerstone of global anti-money laundering controls are the KYC processes/requirements. How does Melissa perform such processes?

Melissa can quickly perform KYC through our ID Verification solutions (IDV), providing access to global datasets containing billions of trusted identity elements from the government, global postal, telecoms data and other data sources in real-time. The underlying data provided at input can be cross-checked, building a confidence score for the applicant based on strength of the underlying data. Melissa helps further by identifying individuals at the ‘point of entry’ via imaging and facial recognition technology.

This is done by checking the applicant by cross-referencing a live image (biometric facial recognition of a selfie) against a scanned ID document image (eg driver license photo). ID documents are validated to ensure they are not fake, and the held data uplifted via Optical Character Recognition (OCR) to avoid mistakes being made at application.

How would you explain the difference between effective client identification and poor KYC standards?

This difference can be categorised depending on perspective:

Consumers want a slick application process. If the supplier organisation can quickly establish a customer’s ID, the consumer will have confidence in that provider.

Financial Service Organisations with poor KYC processes can lose customers at application, but this could also lead to fraud and compliance issues that will impact their brand and bottom line. Using modern KYC initiatives effectively can mean better sales and increased customer engagement.

Fraudsters actively target organisations with poor KYC processes, they know less effective ID resolution means easier victims.

Your product package includes a solution that addresses ID verification that gathers data in order to complete People Data. As sometimes not all gathered data is useful, how does your solution maximise the value of this data?

Research shows many ID checks fail from incorrect data entry, organisations can waste money by running ID checks that are destined to fail because the basic data veracity was not confirmed first. Melissa’s solution ensures underlying data is correct before performing the ID check, this happens in fractions of a second and without disruption to the customer. Having a complete and validated identity record of a customer means that organisations will better communicate, and can complete transactions with their client base in confidence, maximising the value of their customer data.

Can you identify possible trends in ID verification? And what can we expect in the next five years?

In the next five years I expect that:

  • as artificial intelligence helps brands engage with consumers more efficiently, it could evolve to play a role in ID verification in a way that helps brands to deliver a seamless customer experience;

  • the role of behavioural biometrics in ID verification will grow and evolve. This could include monitoring how people type on the keyboard and use the mouse or touchscreen. It could become an important way to authenticate an ID;

  • augmented intelligence will play a key role along with artificial intelligence, working to enhance human intelligence. For identity verification, it will mean not only smarter intelligence, but also stronger intelligence.

In the shorter term:

  • growth in facial recognition technology will confirm ID;

  • as consumers increasingly worry about their ID being stolen, there will be a strong evolution in technology that verifies and protects customer data, as brands seek to placate their fears;

  • fraud is a growing global issue, we see IDV becoming the norm across all sectors and service provision beyond financial services.

About Barley Laing

Barley Laing is Managing Director at Melissa Global Intelligence, where he leads commercial and operational activities, helping the organisation to become a global leader in identity and data verification services. Previously, Barley was CEO of World Address and 2L Technologies, and has held senior positions at Xerox, British Telecom, ADC and Shell.


About Melissa Global Intelligence

Melissa delivers flexible, real-time technology solutions for global identity verification and entity resolution. Since 1985, more than 10,000 global customers including banks, credit unions, mortgage lenders and payment providers have relied on Melissa to verify an individual’s identity with our best-of-breed solutions for global address parsing and verification, and advanced matching algorithms – to minimize risk and fraud.

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Keywords: identity verification, KYC, Melissa Global Intelligence, authentication, ID check
Countries: World