FICO, a global analytics leader, released a Customer Identity Management Survey which found that many banks across the U.S. and Canada are failing to meet their customers’ online identity fraud and digital banking needs.
Read More: GlobalFintechSeries Interview with Piers Ridyard, CEO of Radix
Despite COVID-19 quickly turning online banking into an essential service, the survey found that financial institutions across North America are struggling to establish practices that combat online identity fraud and money laundering, without negatively impacting customer experience. For example, 51 percent of North American banks are still asking customers to prove their identities by visiting branches or posting documents when opening digital accounts. This also applies to 25 percent of mortgages or home loans and 15 percent of credit cards opened digitally.
Read More: Security Breeds Prosperity, KuCoin Launched “Safeguard Program”
“The pandemic has forced industries to fully embrace digital. We now are seeing North American banks that relied on face-to-face interactions to prove customers’ identities rethinking how to adapt to the digital first economy,” said Liz Lasher, vice president of portfolio marketing for Fraud at FICO. “Today’s consumers expect a seamless and secure online experience, and banks need to be equipped to meet those expectations. Engaging valuable new customers, then having them abandon applications when identity proofing becomes expensive and difficult.”
The study found that only up to 16 percent of U.S. and Canadian banks employ the type of fully integrated, real-time digital capture and validation tools required for consumers to securely open a financial account online. Even when digital methods are used to verify identity, the experience still raises barriers with customers expected to use email or visit an “identity portal” to verify their identities.
