Know your customer (KYC) and identity verification activities present a major barrier to consumer satisfaction and efficient operations for financial institutions. Financial institutions need secure and frictionless onboarding. Identity verification, and authentication processes and they’re finally able to take the next step with decentralized identity (DI) and reusable credential — AKA verifiable credentials (VCs) –technology.
While VCs have been a promise of identification and authentication technologies for decades, decentralization being the fabric through which VCs are established and communicated now makes the whole proposition more viable for FIs.
The decentralized nature of DI eliminates the need for a centralized authority to manage and control the identity certification process underlying current onboarding, consumer interaction and communication, and authentication systems that are complex and costly for FIs, frustrating for consumers, and open to abuse.
In the DI ecosystem, issuing organizations conveniently and securely issue fraud-proof, reusable credentials, and FIs can instantly check the authenticity and validity of those credentials to grant access to services. The customer accepts, stores, and selectively shares their credentials with unprecedented privacy, security and trust.
Early adopters in the financial services industry are using VCs as customer-controlled, open, standardized, portable, and cryptographically protected digital credentials to enable:
- Continuous strong authentication of banking customers, whether they are accessing via web, telephone, mobile, or even in-person.
- More streamlined banking functions, such as real-time loan approval because the applicant carries credentials that perpetually include all KYC data, credit history, employment history, etc. in their identity wallet.
- A more positive consumer experience and quicker communication, as VCs eliminate the need to repeatedly verify the identity of the consumer through security questions, SMS-based PIN codes, etc.
The result is drastically reduced KYC and AML costs, vastly enhanced customer experience and streamlined regulatory compliance.
Five quick wins with reusable credentials
1. Onboarding
Onboarding new consumers is a long, labor-intensive process that doesn’t intuitively lead to customer loyalty and full engagement. Verifiable credentials streamline the process and accelerate onboarding removing many of the manual KYC processes that typically stand in the way of security and customer satisfaction.
2. Verified Chat
Communication between an FI and its members / customers is cumbersome and lacks security due to the need to repeatedly verify the identity of the consumer and the inherent risks of chat-based communications. Verifiable credentials are an irrefutable and reusable credential that can eliminate the need to delay interaction as the FI verifies the identity of the consumer.
3. Contact Center
When members / customers communicate via an FI’s contact center the need to validate the identity of the user causes delays and a cumbersome experience. Again, the irrefutable and reusable nature of verifiable credentials streamlines and secures the whole process.
4. Branch Experience
When a member /customer visits the branch (including drive-through) there is a need to verify identity which delays transaction completion, increases consumer inconvenience, and places tellers in a situation where they are the decision point to verify identity. Verifiable credentials remove the need to repeatedly validate identity and provide an irrefutable and quick process that dramatically improves consumer experiences.
5. Secure Alerts
When an FI needs to communicate with members / customers they typically do it over text or with a voice call. Both are not likely to be answered by the consumer for fear of phishing or other scams. Consequently, resolving a security issue often takes much longer than necessary and may be delayed until it is too late. Verifiable credentials provide a dedicated, secure communication channel that consumers and FIs can both trust.
Explore Anonyome Labs business solutions
Discover how to quickly take DI to market using Anonyome Labs’ APIs.
Get more advice on getting started, contact us today.
