Our digital identities are becoming increasingly more important as we transition to a mobile-first world. These identities shape the way we talk, trade and transact online. For organizations and businesses around the world, harnessing the power of digital identities is a crucial element of doing business – particularly when it comes to meeting various compliance and customer due diligence (CDD) requirements. For players in the eCommerce space – including merchant acquirers and online marketplaces – instant, electronic identity verification for businesses and consumers is a top priority. When onboarding new merchants it’s important to perform due diligence to help mitigate risk, prevent fraud and comply with regulatory compliance obligations, such Anti-Money Laundering (AML) rules. In order for the enormous potential of eCommerce to be realised, consumer trust is critical. Of late, the digital identity market has been thriving – but challenges remain. Why is digital identity such an important topic? Without reliable and trusted data, companies have to spend countless hours manually checking and cross-referencing multiple data sources to verify customer identities to meet AML and Know Your Customer (KYC) requirements. However, with the right tools – these cumbersome processes can be avoided. For example, Trulioo’s bank-grade electronic identity verification platform, GlobalGateway, enables clients to instantly verify five billion people and 250 million businesses from nearly every country in the world through a single API. At Trulioo we offer secure access to a global marketplace of identity information, so businesses and organizations can dispense with these, archaic, costly, time-consuming processes of old. With ever-expanding AML/KYC compliance requirements, access to an increasing number of databases is necessary in order to deliver cross-border compliance. Approximately 300 million pages of regulatory documents are expected to publish by 2020. This, compiled with the fact that between 2008 and 2016, there was a 500 percent increase in regulatory changes in developed markets, highlights the significant need for scalable, efficient, reliable RegTech solutions. With our data marketplace, our clients have information from over 400 partners at their fingertips – all available through one contract and one solution. Not only do we enable businesses to verify individuals and business entities from all over the world – we also allow our clients to layer electronic identity verification capabilities with document verification and facial recognition technology in order to ensure they have a robust and comprehensive technology stack at their disposal. What about mobile? Mobile identification is an area that is experiencing explosive growth. Earlier this year, we announced we now offer a MobileID solution – another crucial element in the mosaic of identity. This new and reliable identity verification source is a game-changer, leveraging some of the world’s largest mobile network operators to advance our mission to break down identity verification barriers and ensure organizations can access hard-to-reach markets. What are the challenges facing the market? One of the challenges is procuring reliable data in the aforementioned hard-to-reach markets. In advance economies, we largely take for granted the availability of data that can be used for identity verification. Some of these data sources include credit bureaus, governments, consumer files, and utility bills. However, in developing countries where identity infrastructure does not exist, alternative sources must be relied upon for the purpose of identity verification. Overcoming obstacles The team at Trulioo is dedicated to helping provide access to financial services to the underserved – otherwise known as the unbanked. This group often lack access to the traditional forms of identification necessary to open an account with a registered financial institution. As we get strive to meet our mission to be able to verify all of the world’s citizens, GMSA’s Mobile Connect also becomes increasingly important. Countries without access to credit bureau and government data can instead turn to mobile network operators (MNOs) for verification purposes. Even in countries where most citizens don’t have bank accounts, they do own mobile phones. Through our marketplace, organisations are able to verify billions of people online so that everyone – regardless of race, location or financial situation – can talk, trade and transact in today’s digital economy. With real-time verifiable identities, a framework of trust and safety is established and organisations can deliver on the extraordinary promise of digital commerce in the years ahead. This article first appeared on the GSMA Blog: Digital Identity: Crucial for the Success of Today’s Mobile-First World. Traditional banks have legacy technology systems that have proven themselves and built trust over many decades. Banks’ reluctance to engage with newer, disruptive technologies is understandable: Their hard-earned reputation is at stake, so any change in their tech stack would need to be thoroughly vetted and carefully implemented. On the other hand, challenger banks are much more agile, and open to deploying new tech. Having said that, they still need to put in place an extremely robust security framework – it takes one lone case of data breaching to consternate customers, particularly if the bank has little to no track record. In this context, how can banks ensure the highest level of security, control, compliance and other mandatory requirements yet implement new solutions that are flexible, adaptable, open and scalable? Banks are changing, but with caution Many proponents call for the phasing out of legacy banking technologies, pointing to the operational costs of upkeep and complexities inherited from a bygone era. According to KPMG’s Banking Systems Survey 2017/2018, which looked at Dutch banks, “large banks seem to have shifted their focus from replacing their +30 year-old mainframe core banking systems into further development of these systems.” This points to a best-of-breed strategy, wherein banks combine their well-trusted back end systems with middleware tools to enable front-end agility. This allows banks to change different sub-systems or functionalities on a case-by-case situation, instead of overhauling their systems altogether. To that end, Software as a Service (SaaS) solutions, in particular, are being increasingly adopted by banks; Through the use of APIs to simplify integration, SaaS enables quick implementation of new services while avoiding the risks of changing legacy code and processes. As Danny Healy, financial technology evangelist at MuleSoft, states, “APIs will emerge as the preferred solution acting as a central mechanism for enabling the integration that banks require.” It’s an API world There are numerous banking APIs that are available now; Programmable Web lists 429 different banking APIs. Note this does not include private APIs, which are internal to a specific bank. What are some solutions that APIs can help deliver? Onboarding One of the biggest pain points for customer acquisition is the sign-up process; a slow, cumbersome process leads to high abandonment rates and adds cost. According to a FICO study, 22 percent of users would abandon an online bank application if they are required to visit a branch or use the phone to complete the process. APIs, such as Trulioo’s GlobalGateway, allow identity verification to be completed entirely online, improving the onboarding experience, lowering costs and the rate of abandonment. New services Building and delivering new services can be a protracted and costly experience. With APIs, new services are quickly tested in a sandbox environment – and, if they deliver as promised, a more thorough vetting occurs. This vetting process, too, is quick and reliable because APIs allow you to tightly control the transfer of data. As the number of APIs grow, the scope and variety of services that banks can offer their customers will also grow. Personalization While the ability to offer numerous services is advantageous for consumers and the bank’s bottom-line, offering too many services and confusing the customer base helps no one. Using AI and advanced data analysis techniques, banks can determine the most appropriate, targeted services, on a personal level. Combining the ability of new API powered services with customization will increase retention, optimize revenue possibilities, and create a better banking experience overall. Customer service Voice or chat APIs allow customers to access their data in more interactive ways, creating a more valuable customer experience. As open banking becomes a reality, regulators expect APIs to play a transformative role in changing the banking landscape. Stimulating competition in the banking industry, allowing customers more access to a variety of financial solutions and services, along with more ownership of their data – these goals are best realized via the use of APIs. Indeed, for banks to retain their prominent position in the financial landscape, APIs are a natural way forward. Individual Verification (KYC) Banking API – Onboarding Learn how one identity verification API is helping developers transform the customer onboarding experience. In 2016, Paul Romer, the former chief economist of the World Bank, called Aadhaar – India’s national identity scheme — the most sophisticated ID program in the word. Romer’s opinion is grounded in hard statistics — covering more than a billion people across one of the most geographically, culturally and ethnically diverse regions in the world, the Aadhaar is the largest biometric data source in the world. Ten years since its launch, close to 89% of India’s 1.4 billion (approx.) population has an Aadhaar card — from port cities straddling the Indian ocean to Himalayan villages perched 4,500 meters above sea level, the Aadhaar has become the most widely used identity document in India. However, on September 26, 2018, the Supreme Court of India — its apex court — struck down Section 57 of the Aadhaar Act, preventing private companies, such as banks, fintech solutions, telecom companies, among others, from accessing Aadhaar data; the judgement was a blow to these private entities, which need to comply with India’s Know Your Customer (KYC) regulation, because they have been relying on Aadhaar IDs to digitally onboard customers. Let us try to understand the founding mission of Aadhaar before understanding the ramifications of the Supreme Court’s judgement. Aadhaar: A totalizing framework for national identity At its inception, the Aadhaar’s purpose was: Identify beneficiaries of India’s welfare schemes so that benefits are disbursed to those who actually need them. This was one of its primary motivations — with corruption rampant across India’s public services, welfare benefits for the poor were being usurped as a result of bureaucratic malfeasance. Create a universal identity scheme; prior to the introduction of Aadhaar, there was a wide array of government-issued documents that were used to establish one’s identity. Opening a bank account, for instance, required a combination of IDs: Passport, driver’s license, a PAN card (tax card), ration cards etc. Often, banks required customers to produce copies of such documents attested by the appropriate authorities, to fulfill Know Your Customer (KYC) requirements. In this context, Aadhaar was envisioned to streamline the compliance and customer onboarding process. Create a verifiable identity for India’s poor. With India still being primarily an agrarian economy, a large section of its population still resides in remote and rural regions. High levels of illiteracy, combined with poor access to government services, meant that this section of the population did not have an official identity. The Aadhaar was intended to give this large subset of Indians an identity for the very first time, along with creating a mega data source of identity information which could then be used to verify identities. How the ground realities of Aadhaar triggered judicial action Aadhaar became a national issue after a series of galvanizing media reports: Multiple cases of bank fraud emerged wherein customers lost their savings after their Aadhaar information was compromised. Notwithstanding the serious security vulnerabilities that Aadhaar presented, privacy activists and pundits made the case that the Aadhaar Act impinged on the Right to Privacy, which was declared a fundamental right by the Supreme Court in 2017. According to Jean Drèze, one of India’s most noted development economists, there were two crucial privacy concerns around the use of Aadhaar: Private companies, such as banks, telecoms, fintech solutions, required customers to sign up for their services using Aadhaar card. This was not optional — it was a requirement. For private companies, Aadhaar was highly effective in streamlining the boarding process; it allowed them to digitally onboard customers, and it dramatically reduced the operational cost of verifying the identity of customers. According to Drèze, however, there was always the persistent threat of private players monetizing their customers by selling their Aadhaar information for targeted advertising, consumer marketing and, the creation of a credit rating infrastructure. The second objection was based on fears of state surveillance. Drèze argued that the Aadhaar allowed the government to build a 360 degrees profile of an Aadhaar cardholder. According to Drèze, the Indian government could build a comprehensive profile on a citizen by using their Aadhaar details to link their information from disparate databases. The government, Drèze argued, could not only glean information on who a citizen talks to, where she travels, what she buys, but also her browsing history. eKYC or Manual identity verification? Future of uncertainty looms before India Inc. By scrapping Section 57 of the Aadhaar Act, the Supreme Court barred private entities from using Aadhaar to fulfill KYC requirements. For private entities, the verdict is problematic to say the least: Aadhaar was the cornerstone of their electronic Know Your Customer (eKYC) process; it allowed private entities to digitally onboard customers at a fraction of the cost — according to estimates, eKYC cost ₹15 per customer, while manual identity verification costs ₹100. Aadhaar-enabled eKYC allowed private entities, particularly fintech solutions, to acquire customers and grow at a rapid pace; according to industry leaders and technologists, the Supreme Court judgement has created serious obstacles to the growth of private industry. At present, though, a cloud of uncertainty hangs over private industry; indeed, opinion is divided over the interpretation of the judgement: Does the judgement place a blanket ban on the use of Aadhaar for eKYC? Can private entities still ask for a customer’s Aadhaar number provided he agrees to share his Aadhaar details with them, — effectively reverting customer onboarding costs back to pre-judgement levels? Only time will tell. Posts pagination Previous 1 … 142 143 144 … 168 Next
Our digital identities are becoming increasingly more important as we transition to a mobile-first world. These identities shape the way we talk, trade and transact online. For organizations and businesses around the world, harnessing the power of digital identities is a crucial element of doing business – particularly when it comes to meeting various compliance and customer due diligence (CDD) requirements. For players in the eCommerce space – including merchant acquirers and online marketplaces – instant, electronic identity verification for businesses and consumers is a top priority. When onboarding new merchants it’s important to perform due diligence to help mitigate risk, prevent fraud and comply with regulatory compliance obligations, such Anti-Money Laundering (AML) rules. In order for the enormous potential of eCommerce to be realised, consumer trust is critical. Of late, the digital identity market has been thriving – but challenges remain. Why is digital identity such an important topic? Without reliable and trusted data, companies have to spend countless hours manually checking and cross-referencing multiple data sources to verify customer identities to meet AML and Know Your Customer (KYC) requirements. However, with the right tools – these cumbersome processes can be avoided. For example, Trulioo’s bank-grade electronic identity verification platform, GlobalGateway, enables clients to instantly verify five billion people and 250 million businesses from nearly every country in the world through a single API. At Trulioo we offer secure access to a global marketplace of identity information, so businesses and organizations can dispense with these, archaic, costly, time-consuming processes of old. With ever-expanding AML/KYC compliance requirements, access to an increasing number of databases is necessary in order to deliver cross-border compliance. Approximately 300 million pages of regulatory documents are expected to publish by 2020. This, compiled with the fact that between 2008 and 2016, there was a 500 percent increase in regulatory changes in developed markets, highlights the significant need for scalable, efficient, reliable RegTech solutions. With our data marketplace, our clients have information from over 400 partners at their fingertips – all available through one contract and one solution. Not only do we enable businesses to verify individuals and business entities from all over the world – we also allow our clients to layer electronic identity verification capabilities with document verification and facial recognition technology in order to ensure they have a robust and comprehensive technology stack at their disposal. What about mobile? Mobile identification is an area that is experiencing explosive growth. Earlier this year, we announced we now offer a MobileID solution – another crucial element in the mosaic of identity. This new and reliable identity verification source is a game-changer, leveraging some of the world’s largest mobile network operators to advance our mission to break down identity verification barriers and ensure organizations can access hard-to-reach markets. What are the challenges facing the market? One of the challenges is procuring reliable data in the aforementioned hard-to-reach markets. In advance economies, we largely take for granted the availability of data that can be used for identity verification. Some of these data sources include credit bureaus, governments, consumer files, and utility bills. However, in developing countries where identity infrastructure does not exist, alternative sources must be relied upon for the purpose of identity verification. Overcoming obstacles The team at Trulioo is dedicated to helping provide access to financial services to the underserved – otherwise known as the unbanked. This group often lack access to the traditional forms of identification necessary to open an account with a registered financial institution. As we get strive to meet our mission to be able to verify all of the world’s citizens, GMSA’s Mobile Connect also becomes increasingly important. Countries without access to credit bureau and government data can instead turn to mobile network operators (MNOs) for verification purposes. Even in countries where most citizens don’t have bank accounts, they do own mobile phones. Through our marketplace, organisations are able to verify billions of people online so that everyone – regardless of race, location or financial situation – can talk, trade and transact in today’s digital economy. With real-time verifiable identities, a framework of trust and safety is established and organisations can deliver on the extraordinary promise of digital commerce in the years ahead. This article first appeared on the GSMA Blog: Digital Identity: Crucial for the Success of Today’s Mobile-First World.
Traditional banks have legacy technology systems that have proven themselves and built trust over many decades. Banks’ reluctance to engage with newer, disruptive technologies is understandable: Their hard-earned reputation is at stake, so any change in their tech stack would need to be thoroughly vetted and carefully implemented. On the other hand, challenger banks are much more agile, and open to deploying new tech. Having said that, they still need to put in place an extremely robust security framework – it takes one lone case of data breaching to consternate customers, particularly if the bank has little to no track record. In this context, how can banks ensure the highest level of security, control, compliance and other mandatory requirements yet implement new solutions that are flexible, adaptable, open and scalable? Banks are changing, but with caution Many proponents call for the phasing out of legacy banking technologies, pointing to the operational costs of upkeep and complexities inherited from a bygone era. According to KPMG’s Banking Systems Survey 2017/2018, which looked at Dutch banks, “large banks seem to have shifted their focus from replacing their +30 year-old mainframe core banking systems into further development of these systems.” This points to a best-of-breed strategy, wherein banks combine their well-trusted back end systems with middleware tools to enable front-end agility. This allows banks to change different sub-systems or functionalities on a case-by-case situation, instead of overhauling their systems altogether. To that end, Software as a Service (SaaS) solutions, in particular, are being increasingly adopted by banks; Through the use of APIs to simplify integration, SaaS enables quick implementation of new services while avoiding the risks of changing legacy code and processes. As Danny Healy, financial technology evangelist at MuleSoft, states, “APIs will emerge as the preferred solution acting as a central mechanism for enabling the integration that banks require.” It’s an API world There are numerous banking APIs that are available now; Programmable Web lists 429 different banking APIs. Note this does not include private APIs, which are internal to a specific bank. What are some solutions that APIs can help deliver? Onboarding One of the biggest pain points for customer acquisition is the sign-up process; a slow, cumbersome process leads to high abandonment rates and adds cost. According to a FICO study, 22 percent of users would abandon an online bank application if they are required to visit a branch or use the phone to complete the process. APIs, such as Trulioo’s GlobalGateway, allow identity verification to be completed entirely online, improving the onboarding experience, lowering costs and the rate of abandonment. New services Building and delivering new services can be a protracted and costly experience. With APIs, new services are quickly tested in a sandbox environment – and, if they deliver as promised, a more thorough vetting occurs. This vetting process, too, is quick and reliable because APIs allow you to tightly control the transfer of data. As the number of APIs grow, the scope and variety of services that banks can offer their customers will also grow. Personalization While the ability to offer numerous services is advantageous for consumers and the bank’s bottom-line, offering too many services and confusing the customer base helps no one. Using AI and advanced data analysis techniques, banks can determine the most appropriate, targeted services, on a personal level. Combining the ability of new API powered services with customization will increase retention, optimize revenue possibilities, and create a better banking experience overall. Customer service Voice or chat APIs allow customers to access their data in more interactive ways, creating a more valuable customer experience. As open banking becomes a reality, regulators expect APIs to play a transformative role in changing the banking landscape. Stimulating competition in the banking industry, allowing customers more access to a variety of financial solutions and services, along with more ownership of their data – these goals are best realized via the use of APIs. Indeed, for banks to retain their prominent position in the financial landscape, APIs are a natural way forward. Individual Verification (KYC) Banking API – Onboarding Learn how one identity verification API is helping developers transform the customer onboarding experience.
In 2016, Paul Romer, the former chief economist of the World Bank, called Aadhaar – India’s national identity scheme — the most sophisticated ID program in the word. Romer’s opinion is grounded in hard statistics — covering more than a billion people across one of the most geographically, culturally and ethnically diverse regions in the world, the Aadhaar is the largest biometric data source in the world. Ten years since its launch, close to 89% of India’s 1.4 billion (approx.) population has an Aadhaar card — from port cities straddling the Indian ocean to Himalayan villages perched 4,500 meters above sea level, the Aadhaar has become the most widely used identity document in India. However, on September 26, 2018, the Supreme Court of India — its apex court — struck down Section 57 of the Aadhaar Act, preventing private companies, such as banks, fintech solutions, telecom companies, among others, from accessing Aadhaar data; the judgement was a blow to these private entities, which need to comply with India’s Know Your Customer (KYC) regulation, because they have been relying on Aadhaar IDs to digitally onboard customers. Let us try to understand the founding mission of Aadhaar before understanding the ramifications of the Supreme Court’s judgement. Aadhaar: A totalizing framework for national identity At its inception, the Aadhaar’s purpose was: Identify beneficiaries of India’s welfare schemes so that benefits are disbursed to those who actually need them. This was one of its primary motivations — with corruption rampant across India’s public services, welfare benefits for the poor were being usurped as a result of bureaucratic malfeasance. Create a universal identity scheme; prior to the introduction of Aadhaar, there was a wide array of government-issued documents that were used to establish one’s identity. Opening a bank account, for instance, required a combination of IDs: Passport, driver’s license, a PAN card (tax card), ration cards etc. Often, banks required customers to produce copies of such documents attested by the appropriate authorities, to fulfill Know Your Customer (KYC) requirements. In this context, Aadhaar was envisioned to streamline the compliance and customer onboarding process. Create a verifiable identity for India’s poor. With India still being primarily an agrarian economy, a large section of its population still resides in remote and rural regions. High levels of illiteracy, combined with poor access to government services, meant that this section of the population did not have an official identity. The Aadhaar was intended to give this large subset of Indians an identity for the very first time, along with creating a mega data source of identity information which could then be used to verify identities. How the ground realities of Aadhaar triggered judicial action Aadhaar became a national issue after a series of galvanizing media reports: Multiple cases of bank fraud emerged wherein customers lost their savings after their Aadhaar information was compromised. Notwithstanding the serious security vulnerabilities that Aadhaar presented, privacy activists and pundits made the case that the Aadhaar Act impinged on the Right to Privacy, which was declared a fundamental right by the Supreme Court in 2017. According to Jean Drèze, one of India’s most noted development economists, there were two crucial privacy concerns around the use of Aadhaar: Private companies, such as banks, telecoms, fintech solutions, required customers to sign up for their services using Aadhaar card. This was not optional — it was a requirement. For private companies, Aadhaar was highly effective in streamlining the boarding process; it allowed them to digitally onboard customers, and it dramatically reduced the operational cost of verifying the identity of customers. According to Drèze, however, there was always the persistent threat of private players monetizing their customers by selling their Aadhaar information for targeted advertising, consumer marketing and, the creation of a credit rating infrastructure. The second objection was based on fears of state surveillance. Drèze argued that the Aadhaar allowed the government to build a 360 degrees profile of an Aadhaar cardholder. According to Drèze, the Indian government could build a comprehensive profile on a citizen by using their Aadhaar details to link their information from disparate databases. The government, Drèze argued, could not only glean information on who a citizen talks to, where she travels, what she buys, but also her browsing history. eKYC or Manual identity verification? Future of uncertainty looms before India Inc. By scrapping Section 57 of the Aadhaar Act, the Supreme Court barred private entities from using Aadhaar to fulfill KYC requirements. For private entities, the verdict is problematic to say the least: Aadhaar was the cornerstone of their electronic Know Your Customer (eKYC) process; it allowed private entities to digitally onboard customers at a fraction of the cost — according to estimates, eKYC cost ₹15 per customer, while manual identity verification costs ₹100. Aadhaar-enabled eKYC allowed private entities, particularly fintech solutions, to acquire customers and grow at a rapid pace; according to industry leaders and technologists, the Supreme Court judgement has created serious obstacles to the growth of private industry. At present, though, a cloud of uncertainty hangs over private industry; indeed, opinion is divided over the interpretation of the judgement: Does the judgement place a blanket ban on the use of Aadhaar for eKYC? Can private entities still ask for a customer’s Aadhaar number provided he agrees to share his Aadhaar details with them, — effectively reverting customer onboarding costs back to pre-judgement levels? Only time will tell.