Biometric facial recognition will bring KYC/AML compliance to a digital world
Today, identity verification has been reliant on matching face to identity documents like passports or other government-issued forms of ID.
Over the past year, biometrics, and especially facial recognition, has moved from the realm of science fiction to business reality.
For example, biometric facial recognition is enabling companies to tie digital and real-world identities together with certainty. MasterCard and others have implemented the technology into their applications to ensure that the user holding the mobile device is the owner of the credit card stored in the app.
As the implementation of facial recognition spreads across banking, travel and other industries, what it means to be “know your customer” (KYC) and Anti-money Laundering (AML) compliant will evolve to include this type of verification.
Technologies will consolidate to expand the role and meaning of ID verification
For most organizations, ID verification is limited to connecting some basic data points about a customer or user – a still photo, a name and address. As regulatory requirements tighten globally and the risk of fraud puts greater pressure on security organizations, businesses will look for a way to connect even more data points together to form a holistic picture of the customer.
In 2016, the most significant advance to hit the mainstream revolved around biometrics – facial recognition, iris scans and fingerprints. In the coming year, expect to see these technologies matched alongside geo-location data, social media cross-checks, behavioral analysts and more to enhance what qualifies as a valid and verified identity.
Another key driver to improve ID verification is the growth in app-based businesses – these are companies that primarily (or only) drive revenue through mobile apps as opposed to brick-and-mortar stories, mainstream websites, etc. Industry watchdog App Annie reported that the app economy is expected to almost double to $101 billion by 2020.
An uptick in technologies that go beyond the power of passwords and multi-factor authentication (i.e. security questions, security PIN texts, etc.)
Relying on usernames and passwords for security is simply not enough. Multi-factor authentication helps to reduce chance of fraud by texting a one-time-use security PIN or prompting for a security question. The recent Tesco Bank hack resulted from sophisticated malware that allowed the hackers to replicate the banking website.
Tesco Bank users unknowingly were logging on to their accounts from a fraudulent site. What’s more, the malware also has a fraudulent mobile component that is able to bypass two-factor authentication with the use of a one-time passcode, which allows hackers to leverage a password valid for only transaction.
Businesses must seek identity verification tools that bridge the digital and real world by checking a physical user against ID documents when initiating new accounts.
Now you can play in the US – online gambling comes across the pond
Long an accepted and lucrative market in Europe, decision makers in the U.S. will discuss the national adoption of online gambling.
Already approved in three U.S. states – New Jersey, Nevada and Delaware – online gaming companies have made significant stride toward more open acceptance of this market.
With the onset will follow regulatory compliance and the ability to KYC
The “chip” will be challenged
While credit cards with microchips have not been fully deployed in U.S. retail stores to date, the availability of the technology stateside signaled a major shift to minimize fraud and protect customers. However, it’s become clear that even this adjustment isn’t enough.
In 2017, retailers and/or major credit companies will look to tools that will allow them to ensure an added layer of security to avoid the burden of fraudulent charges and protect against bot fraud, credit card fraud and more.