ClickCease
Don't miss out! Join us at
2024 featuring Fraud Fight Club on April 25th
arrow icon
Blog

OTPs & Selfies Are Leading the Next Wave of Customer Onboarding in Banking

Post by:
Prove
May 28, 2021
Post by:
No items found.
May 28, 2021
OTPs & Selfies Are Leading the Next Wave of Customer Onboarding in Banking

The quest for a comprehensive digital transformation has pushed banks to evolve the core of banking businesses from operational efficiency to customer experience. Hence, banks are now one of the major tech adopters; they are now leveraging modern technologies such as blockchain, AI/ML, APIs, cryptography, etc., in various capacities.

However, banks now realize that one of the most crucial areas of business where technology can elevate their perception and generate a ‘wow’ factor among their customers is the process of onboarding. Traditionally, opening a bank account has always been perceived as a tedious task requiring visits to banks, filling up forms, ID proof submissions, etc.—all friction for customers to open new accounts. However, with the introduction of digital-first solutions, things are going to change quite a bit.

Banks now leverage modern technologies such as OCR (Optical Character Recognition), image analytics, computer vision, AI/ML/NLP, and biometrics to bring the newer ‘wow’ element into onboarding. The banks of today use several innovative methods of document collection, verification, and authentication.

The call for change is coming from the regulators as well. The growing regulatory scrutiny over AML/CFT and the increasing focus on KYC are bringing newer technologies into the fold. In hindsight, this presents a perfect opportunity for banks to reinvent the way they onboard their customers. While several centralized databases such as Aadhaar, SSN, NIFC, WebID, etc., are built with the major purpose of making KYC easier, techniques such as image recognition and OCR now enable customers to click a selfie for verification of their identities. Regulators across several jurisdictions now allow video calls, selfies, and other innovative ways of authentication. Some other major innovative authentication methods are OTPs, video selfies, video chat with agents, fingerprint & iris scans, etc.

MEDICI conducted a study of 22 banks (traditional as well as digital) across APAC, Europe, and the Middle East and analyzed their digital onboarding methods & eKYC techniques for opening bank accounts. The study found that OTPs and selfies were the most prevalent modern authentication methods for digital onboarding among these banks. While 10 out of 22 banks used SMS-based OTPs, seven banks authenticated their new customers using selfies and video selfies. Four banks used video chat, and three banks used fingerprint/iris scans.

With open banking and GDPR driving discussions around multi-factor strong customer authentication, these newer methods present a vast opportunity for banks and FIs to tap into. These techniques, when in combination with one another, can make the process of authentication much stronger. Some of these banks already use multiple methods of authentication and eKYC. While these newer methods are largely being used by digital-only banks, traditional banks also realize the need to innovate on this front; we can expect significant developments in the next few months and years.

Create secure frictionless customer experiences using modern identity solutions

Join over 1,000 businesses that rely on Prove across multiple industries, including banking, FinTech, healthcare, insurance, and e-commerce. Contact us today.

Prove: the world’s most accurate identity verification and authentication platform

Trusted by 1,000+ leading companies to reduce fraud and improve consumer experiences. Contact us today to learn how you can frictionlessly secure your digital consumer journey — from onboarding to ongoing transactions.

Keep Reading...Read our latest white-paper on this subject!

Tap the button below to read our latest white-paper on the subject as industry leaders.

Accelerate your onboarding

Contact us to learn how leading companies are using Prove Pre-Fill to modernize the account creation process by shaving off clicks and keystrokes that kill conversion.

Create frictionless customer experiences

Get in touch to find out how we can help you identify your customers at every stage of their journey and offer them seamless and secure experiences.

Schedule a demo

Let our expert team guide you through our identity verification and authentication solutions. Select a date and time that works for you.

Schedule a demo

Find out how we can help you deliver seamless and secure customer experiences that comply with PSD2/SCA. Select a date and time that works for you.

Interested in more information about Prove Pre-Fill?

Download the Report

Download Aite-Novarica Group’s full report about Prove Pre-Fill, including a product overview, customer results, and how the product works.

Interested in more information about MFA?

Download the guide now to learn how you can improve security, cut down on fraud, and create the best possible customer experience.