Trulioo: The future of KYC is mobile ID

By Stephen Ufford, CEO, Trulioo.

The smartphone has changed the world, fueling new innovations and greater convenience for people around the world. From the latest app to touch ID and into the realms of voice and retinal recognition, the adoption of mobile technology has become part of everyday life. In fact, a 2017 study by Visa showed that 77 percent of European consumers have managed their finances or made a payment using their mobile device.

Mobile devices have put greater communications, information and connectivity power into the hands of billions. According to GSMA, the estimated number of mobile devices worldwide reached 4.8 billion at the start of 2017. With all of these devices comes an enormous amount of data.

Leveraging mobile data to build secure, trusted and safer methods of transacting and conducting business via mobile presents a slew of challenges but it is also rich with opportunity. Customers expect convenience in their mobile experiences; regulations demand that they be valid and secure. The task of meeting the customer’s needs while satisfying Know Your Customer (KYC) regulations is not an impossible call. Mobile data can build the connection and link to financial services. Businesses with a mobile strategy will have the competitive advantage.

Charges, Changes and Challenges

Mobile technology has powered the high expectations of the on-the-go and always-connected consumer. Whatever they want, they want it now. And if they don’t get it, they’ll move quickly to the next available option.

For businesses aiming to win over and improve customer experiences through mobile, account creation and identity verification pose a few challenges. Providing a frictionless customer onboarding experience is one thing, but you also need to meet KYC obligations as part of your Customer Due Diligence process.

Verifying customers to ensure they are who they claim to be has a bevy of both legal and practical reasons: validating credit cards to prevent fraud, age verification for age-restricted products and services, and proper address verification to reduce shipping errors and the associated costs are just a few examples.

The Shift to Mobile-first

Business objectives and regulations around payments are not easy to move, but your customers are mobile. The pressures of that can be disruptive, but it doesn’t have to be. With the right strategies, tools and technologies in place, equilibrium can be found. That’s where data comes to balance things out.

Mobile is data and data is mobile. Within that circle, there are plenty of opportunities to turn mobile into a powerful business tool. From user interaction to account creation to the final transaction, everything can be done on a mobile device. And the data behind the device in hand can itself be used to authenticate and validate your mobile customers.

The combination of mobile data with traditional data sources can take identity verification to the next level, adding an extra layer of authentication to help reduce fraud, chargebacks, and shipping problems. Add to that a seamless onboarding experience for the customer, and a mobile-first identity verification solution offers them the convenient, immediate and effortless experience they demand.

New Mobile Frontiers

Aside from customer convenience and KYC obligations, there are other reasons to tap into mobile data for your identity verification purposes. The changing nature of mobile business is simultaneously helping to drive and be driven by emerging trends and economies around the world, presenting new opportunities for people, businesses and communities to participate in and contribute to the world’s wealth.

Some of these forces are propelling the need to accept non-traditional digital identification processes, especially in the world of payments and financial services.

The Rise of the Micro-merchant

Whether it’s a side hustle, a hobby business, a freelance gig or a growing online empire of homemade organic marmalade set for global domination, digital technology has redefined entrepreneurship. In the 21st century, you don’t have to be Richard Branson to turn a passion into a global-reaching business. Meet the micro-merchant. Take a unique and appealing product or service to sell, connect it with a few digital tools, and a micro-merchant’s business can be mobile and in-flight before you know it.

In the past, micro-merchants were often excluded from using traditional business and financial services – associated fees were astronomical compared to the value being transacted. But with new tools and a mobile-first mindset, the opportunities and success rates for micro-merchants have flourished.

A Community of Online Marketplaces

The “Mom and Pop” shops of the world don’t have to do everything on their own. In fact, they don’t even need a shop or a website for that matter. The rise of online marketplaces has empowered these micro-merchants to make more of their goods and services, providing both a virtual store and an audience to market to. Think eBay, Etsy, Uber, AirBnB. With these, you can sell and resell goods nearly anywhere in the world, or turn your car or spare room into some extra income in just a few swipes or clicks.

Whether they’re a customer or traveler or anything else in between, the end user can readily access, select, purchase or book from anywhere and on any device. And mobile verification technology allows both sides of the transaction feel secure in their dealings with each other.

The Multitudes of Unbanked

It has been reported that there are approximately 2 billion people on this planet who are unbanked – many of them in the developing world but also plenty of others that are just not able to access traditional financial services. They may be young, lack the required identification, or not have a deep enough credit history. This can render them unable to access critical services such as insurance, government services, banking, credit cards and loans.

Yet, many of them are still connected through a mobile phone. They may be on the outs of financial inclusion but they can still text, pay via mobile apps, and access the internet on their mobile. They’re personae non gratae to the banks, but today’s technology can verify their identity against active mobile data and set them on the path to account creation and the benefits that come with access to financial services.

Knowing Your Mobile Customers

In a world where nearly everyone is buying and selling on a mobile device, how on earth do you make sense of all the noise, clutter and blurring of spaces and faces? The excitement of the mobile age comes with its problems – one of the worst being fraud. Scammers evolve with technology; thankfully, the same mobile technology they’re using to commit fraud can also be used to deflect them.

Connecting with real customers and foiling fraudsters in the mobile world is a challenge.  While you have an array of verification methods and data available to you, accessing mobile data and leveraging it to ensure that specific criteria are met by legitimate customers adds an extra layer of protection. Simply put, it’s another tool to help you reduce your fraud risk, improve your KYC standards, and just as important, secure an effortless experience for your mobile-minded customers.

Related reading