Have you found your best angle yet? Opening a new bank account has just become easier for you then. More and more banks embrace selfie-powered customer onboarding and rely on AI-powered digital assistants for support. But how can they make the most of these technologies?

Onboarding is the first and oh-so-important touchpoint between banks and their clients. Said clients increasingly demand a quick and hassle-free process when applying for accounts, credit cards and loans. What awaits them, however, is often anything but.

To avoid losing customers, banks’ onboarding strategy must offer seamless and personalised experiences, Deloitte advises. This is crucial as 38% of customers believe user experience is the key factor when picking a digital bank, with 26% saying that easy enrolment and login are what they value the most.

Digital onboarding: copy your challengers

New technologies such as facial recognition can be a sure-fire way to speed up the onboarding process. Unsurprisingly, digital-only challengers are leading the pack in this area. Their advantage is huge: unlike industry incumbents, they aren’t burdened by bulky legacy systems and don’t have to work around product silos or complex back-office processing.

Atom Bank was the first UK bank to allow clients to complete mortgage applications only using their smartphone. Monzo asks for a photo of the customer’s passport or driving licence for identification and matches it to a video selfie. German challenger banks N26 and Fidor are right back at their UK-based counterparts, offering immediate account access through a video chat-based ID verification process. But disruption hasn’t stopped there: customers of savvy challengers can also log into their accounts with face and voice biometrics, normally used in video game development. 

And the pack seems to follow. In June, Royal Bank of Scotland Group member NatWest rolled out an AI-powered identity verification process for easier, safer and faster account opening. All customers need to do is upload a selfie and a photo ID and let HooYu’s real-time biometric checks take care of the rest in as little as four minutes. A month later UK-based TSB debuted a brand new ID verification technology, developed by Jumio. Its banking app can now compare new customers’ uploaded photo ID with their selfie snap to authenticate the account opening process. 

Liveness testing: how to look behind the selfie

Facial recognition is a powerful anti-impersonation weapon, which ensures that customers applying for products actually are who they say they are. But you can do even better. Optical character recognition (OCR) ups the ante by extracting textual data from documents to verify their authenticity.

Me, offered by Spanish customer identity specialist Icar and facial recognition and biometrics company FacePhi, allows customers to open an account after scanning their IDs and taking a selfie. The system compares the photo with the ID picture and also checks the user’s geolocation data and social media identity details. It also uses a liveness filter that can distinguish between a real person and a photo, based on movements.

Liveness detection is also used by Dot, a digital onboarding toolkit debuted by Slovakian biometrics company Innovatrix. In order to prove that they are real people, customers are prompted to follow a randomly moving dot on their mobile screen. The system also includes AI-powered and automated OCR that can handle low-quality ID pictures, facial authentication with a selfie and server-based biometric identification.

Onboarding customers are not the only ones benefiting from OCR, though. The technology also comes in handy when enrolled customers use the banking app. Once the user is logged in, the system keeps checking the account owner’s identity through the frontal camera of their mobile. If the user isn’t actually looking at the screen or somebody else is stealing a glance over their shoulder, the content of the screen becomes blurred to safeguard sensitive information.

Erica, what’s my balance?

But some players in the banking industry have gone even further in using AI in customer onboarding. Scandinavian digital bank Nordnet has introduced Amelia, “a digital employee”, to guide prospective customers through the entire onboarding process. Available 24/7, she interacts with customers and even makes sure they activate their accounts. Amelia is just as good as she sounds: she learns quickly, manages complex dialogues and responds to analytical triggers in real time.

In essence, their new digital assistant is a comprehensive AI platform and cognitive technology that connects conversations, data and processes to provide personalised end-to-end customer experience, Nordnet says. The company has teamed up with digital labor IPsoft to develop Amelia’s capabilities to support onboarding. But that doesn’t mean that’s all she can do: her services can be used for plenty of things from customer service to IT service desk and procurement.

Again, established players seem to have got the memo. 

In June 2018, Bank of America introduced its AI-driven virtual assistant, Erica, to its 25 million mobile clients. Within a year, Erica completed more than 50 million client requests and its fan base grew to 7 million users. “Consistent with our high-tech, high-touch strategy, we’ll continue evolving our best-in-class digital banking capabilities, including Erica, to provide clients relevant, timely guidance and help make managing their finances easier,” David Tyrie, BoA’s head of advanced solutions and digital banking pledged.

Onboarding checklist: what to bear in mind

Still, technology isn’t the only thing that matters when it comes to digitising onboarding processes. Deloitte warns that even if a technology has an impressive track record, financial institutions still need to weigh integration feasibility and local regulations. For example, photo or video identification requirements, anti-money laundering and counter-terrorism financing rules can be tricky, not to mention data protection guidelines.

“Many regulations are applicable in the onboarding process and must be carefully analysed before launching the new digitized process,” Deloitte warns. These challenges need to be chewed over and built into the planning process from day one.

Another thing banks should consider is how to take identity fraud out of the equation, which can cause losses equivalent to 1-4% of annual sales volume, Icar estimates. No wonder that reliable user identification and authentication remains a huge challenge for the industry. But as Icar explains: “Digital identity is precisely what makes it possible to conduct ever-more-precise and seamless comparisons between the physical person and the digital person, offering a much more reliable form of verification.”

This post was originally published on March 30, 2018 and has been updated to include recent developments.


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