Selfies Help Bring a Balance of Member Security, Experience

Credit union members seem to be either confused or conflicted. They want protection from identity thieves but they want their experience to be frictionless. So they must conjure up some fintech magic to improve security without affecting engagement.

Additionally, credit unions that can seamlessly authenticate and onboard members will differentiate themselves from their competition.

One solution offered by the Switzerland-based enterprise financial technology developer Temenos, which services more than 3,000 firms globally, leverages the company’s partnership with the Atlanta-based IDology to offer credit unions selfie verification technology in the consumer loan origination space.

Temenos, whose main U.S. office is in Malvern, Pa., integrated its Lifecycle Management Suite into IDology’s ExpectID platform, a solution that supports photo identification scans with facial recognition for account and loan origination. Temenos indicated credit unions can deploy the LMS and Virtual Capture in-house or as a cloud-based offering.

A 2018 IDology Consumer Digital Identity Study found 56% of respondents are more likely to choose a financial institution that uses advanced identity verification methods. This research also revealed consumers are looking to do business with financial institutions that offer an overall service experience with minimal friction. The same research found when opening an account online, consumers place a premium on security (88%) and ease (72%), with 31% reporting they abandoned a sign-up process because it was too difficult or long.

“Credit unions are driven to remove friction from the member or consumer journey,” Larry Edgar-Smith, SVP of product strategy and evangelism for Temenos, said. “Entering basic demographic data into an online or mobile application or answering ‘out of wallet’ questions to verify identity represent points of friction in an application or onboarding process.” Edgar-Smith added replacing those activities with a few camera clicks makes the process easier, which leads to less abandonment, fewer follow-up calls, and, ultimately, more accounts and loans.

“At the same time, the credit union can be sure it is receiving applications with quality data about the individual and that their identity has been properly verified,” Edgar-Smith said.

Edgar-Smith said through their partnership, Temenos and IDology want to capitalize on credit unions’ willingness to invest in every transaction to obtain members. “Because of that deeper bond, technology innovation at credit unions is becoming critical to optimize the member experience and create a mutually valuable relationship that lasts. IDology fits right in the middle of that by creating the opportunity for users to stay within the system in order to apply for a loan efficiently and securely.”

IDology offers real-time, on-demand identity verification and fraud prevention solutions for organizations operating in a customer-not-present environment. “The IDology platform serves as a collaborative hub for monitoring and stopping fraudulent activity while also driving revenue, decreasing costs and meeting compliance,” Edgar-Smith stated.

Chris Luttrell, SVP of operations at IDology, pointed out the solution incorporates onboarding, identity verification, smart step-up identity escalation and ongoing digital authentication – all fully integrated into its ExpectID platform. “The solution is supported by smart layers of identity attributes, including attributes around identity, activity, location, mobile service and devices, and is surrounded by a consortium fraud network that monitors transactions and activities across industries.” Luttrell added this results in better locate rates and decisioning, more accurate risk profiles, decreased fraud and a better user experience.

The Virtual Capture system guides applicants to take a picture of the front and back of their ID from their mobile device and then take a selfie. The IDology solution allows for the transposition of data into application fields and matches the selfie with the photo ID to provide a confidence score for the applicant’s identity.

Credit union members can configure where in the workflow and for which applicants and products they wish to employ the ID scan functionality.

IDology’s focus is to help financial institutions acquire more customers or members through a better experience and grow revenue while minimizing risk-related costs and losses from fraud.

Luttrell noted, “The ExpectID Platform includes key products such as ExpectID Scan Onboard and ExpectID Scan Verify, which help credit unions reduce barriers for legitimate members to sign up for accounts or request loans.”

When applying for a loan, the member receives a request to capture the front and back of their ID document with their mobile device camera. The system then quickly checks the validity of the document and verified data of the captured ID. The user receives a follow-up prompt to take a selfie for facial and liveness comparison against the ID document. Luttrell noted along with the image comparison, the system examines document attributes programmatically and verifies them against the issuer’s template as well as identity attributes such as name, address and geolocation to make sure they are valid and real.

IDology’s ExpectID Scan products integrate directly into the application process to enable smoother mobile transactions by scanning and verifying a member’s photo ID, such as a passport or driver’s license, and extracting the information to pre-populate the enrollment form or loan application. It also automates the manual review process and evaluates attributes associated with risk.

“This process brings the physical world into the digital world, making the identity verification process easier for the applicant while helping credit unions identify their member’s identity,” Luttrell said. “By using processes that involve technologies such as ID scan and selfie comparisons to verify identities, credit unions have the opportunity to increase their reach and acquire more legitimate members, without having to increase physical branches and while reducing visits to credit union branches,” Luttrell said. She added by utilizing digital and mobile channels for loan applications and other transactions, credit unions provide more value to their members by serving them in more convenient and efficient ways, as well as providing them with a lower-friction member experience.

“Credit unions can benefit from identity verification platforms such as IDology’s to get higher locate rates, improve the decisioning process and reduce costs, while providing to their members more value through frictionless experiences on their digital channels and increasing their trust by deterring fraud,” Luttrell stated.

Temenos’ LMS rules engine determines which additional identity verification steps the financial institution needs from each applicant based on the confidence score returned from IDology. The LMS supports connectors to Experian and FIS, which can be used in conjunction with IDology for further validation.

The Temenos loan and account origination solution supports integration to core banking systems for importing existing account holder information and automatically creating a new loan and/or account in the core once origination is complete. The solution also supports a comprehensive suite of connectors to best-in-class providers for origination services such as credit, collateral valuation and insurance.

Virtual Capture supports standard single sign-on capabilities, which allow the integration of existing desktop or mobile banking accounts through which members can begin or continue applications. The ID verification solution can pass data captured during the origination process to the core or make it accessible from the integrated collection and account holder service module of the LMS to validate the account holder’s identity across any variety of future interactions.