Verifying international students for financial service accounts
For students, the start of a new school year is exciting. However, for those who are moving to a new country, along with the excitement comes trepidation. Like many new-to-country residents, international students may face obstacles when opening a bank account, applying for credit cards or otherwise performing financial transactions.
Students are often classified as thin-file consumers — with little or no credit record. Expounding the issue, international students’ identification is unrecognizable for many financial institutions (FIs). The necessary Know Your Customer (KYC) component that regulators require FIs to perform for any account opening thus becomes difficult and causes friction, if not outright rejection.
Of course, financial services are not the only new activity that students want to partake in. From participating on dating sites to trading on marketplaces, having effective ID is a prerequisite for many of the things that young adults want to do.
The number of people affected is significant. Each year, approximately 18 to 20 million students are enrolled in U.S. colleges. Of these, the number of international students is around 1.2 million. According to a 2016 UNESCO study, the number for internationally mobile students is 5.1 million.
However you count it, these students represent a sizable market. And, as young educated consumers, they are the type of demographic that can deliver a growing and ongoing lifetime value. Acquiring these customers now represents a potential high-earning customer for life.
Onboarding without friction, cost or delay
The question is, how can you onboard these thin-file or international consumers without significant friction, cost and delay? How can organizations make sure that these young consumers get a good brand experience and quickly start to enjoy their new lifestyle?
Fortunately, online identity verification processes exist that can validate a student’s identity while maintaining proper due diligence and risk mitigation procedures. For example, ID document verification enables checks on ID documents, such as driver’s licenses and passports, from almost every country in the world. While any one branch might not have the expertise to accurately check these international documents, online solutions can leverage knowledge of hundreds of templates and formats no matter where the student signs up.
While the students might be thin-file, that doesn’t mean no information exists. Electronic identity verification (eIDV) techniques can use information from numerous sources, not just credit bureaus. The key to successfully verifying a wide swath of students is having access to multiple data sources, both within a market and internationally. The broader the data sources, the increased likelihood an accurate identity match is found.
For Generation Z consumers, online activities are second nature and, often, the preferred way to do business. Signing up students online, with proper identity verification procedures, is a way to acquire these people as customers in the way they like and in a way that is compliant, secure and scalable.