Balancing Compliance, Security and Customer Experience
Ever-increasing money laundering threats
Remote Identity Verification Anti-Money Laundering regulations can often seem like an unnecessary barrier to doing business. The Regulatory obligations that must be fulfilled by law can put a strain on your business, staff and your customer relationship. It can often be a labour intensive endeavour, incurring huge operating costs, increased onboarding times, resource-intensive for staff and more importantly can create a very frustrating experience for your customer.
When this happens, it’s easy to lose sight of why regulations exist in the first place.
Anti-Money Laundering regulation is integral in keeping society safe from organised criminal gangs strengthening their operations and destroying democracy.
There are an estimated 2,800 criminal gangs in the UK alone, according to the national crime agency and Europol has warned that the number of criminal gangs operating in Europe has surged to at least 5,000 (source). These criminal gangs are the cause of untold human suffering including human slavery, drug trafficking, sex trafficking, terrorism and more.
Money laundering represents an enormous cost to the UK economy each year. In May 2019, the National Crime Agency estimated that the illegal movement of money by criminals and terrorists costs the UK economy over £100 billion a year (source). When you consider that the total spent on the NHS in England was £129 billion over 2018/19, the devastating financial consequences of this financial crime became starkly apparent.
In short, money laundering is a huge problem for the UK and crime pays if criminals are able to conceal their assets by funnelling it through legitimate businesses. As a result, the UK has some of the strictest money laundering regulations in the world, with severe penalties for those firms who are found non-compliant.
Change in customer expectations
Client expectations are shifting dramatically. Your customers demand instant online access to personalised services or products through their mobile phone and other devices, anytime and anywhere.
New FinTechs and start-ups are raising the bar for delivering fast and seamless online solutions and services to their clients, shaking up the status quo and forcing traditional firms to make significant investments in digital transformation projects to compete with new entrants, and maintain revenue growth and market share.
The growing mobile services industry is not just reserved for retail customers as we have been seeing the trend to improve digital services for commercial customers too.
Now with the recent pandemic, the move to online and remote services has been driven by the need to best serve clients, while maintaining revenue growth and market leadership. The trend to digital has accelerated, and there is now little patience for poor online user experience. In the last month alone, 20% of consumers switched to other Brands due to a bad online experience (source).
Users also worry about keeping their identity information secure – and rightly so. The current state of play is fragmented and out of date. Identity information should not be this easily
duplicated or poorly stored. In every respect, data breaches should be the exception, not the norm.
Whilst your customers expect a seamless digital onboarding experience, they are unwilling to compromise on security and, when they are onboarded, they want to be confident that their identity, and the data they are handing over, will be protected and secure.
The challenge for many regulated businesses, meanwhile, is to strike the right balance of delivering robust security processes, whilst ensuring an effortless onboarding journey. Compounding the problem further is the need for firms to ensure that they meet their regulatory compliance obligations on an ongoing basis – not just at the onboarding stage.
The need for compliance, security and user experience
Many believe that to succeed, you must provide a completely friction-free onboarding process, where identity verification is almost completely invisible to the end-user, and the less data captured on the client the better.
However, this is simply not the case.
In fact, the user expects some level of security verification and due diligence, when they are being onboarded, especially if they are dealing with financial products and services.
The protocols of Identity verification are important to get right. The user expects some level of friction when handing over personal details, however they also want an effortless process that requires them to only add their details once.
The problem with many online remote identity verification solutions is it can take end-users on average 2.4 attempts to verify their identity and complete a transaction. Your customers will inevitably get frustrated by rekeying in data multiple times, having their ID document rejected, or having to redo a selfie or video verification again and again.
Once the data is collected, firms need to check this information against multiple data sets, to ensure that their customer is who they say they are, and that they are okay to do business with. If these checks are manual and slow – customers will not stick around.
One obvious solution to this problem is to use an automated API-driven solution that can verify client data against multiple data sets, in real-time.
Striking the balance with NorthRow and iProov
NorthRow have partnered with iProov to deliver market-leading remote verification technology, enabling your customers to sign up and be verified in minutes, at their own convenience, using their own device, anywhere, anytime.
iProov and NorthRow share the same mission – to make it effortless for individuals and businesses to comply with complex regulations. The pandemic has proved beyond doubt that being able to accurately and quickly verify customer identity online is not an optional extra, or nice-to-have – it’s essential. The key is to make it simple and secure.
By adding Genuine Presence Assurance to our RemoteVerify platform, NorthRow further enhances its great user experience and enables regulated businesses to know that each individual is the right person, a real person and that they are genuinely present right now. As online criminal activity and large-scale spoof attacks threaten organisations such as accountants, estate agents, and solicitors, they will need this more than ever.