Mobilizing account opening
Although most U.S. banks offer some type of mobile channel, significant disconnects remain. For example, only about a quarter leverage mobile for account opening, or plan to begin doing so.
One considerable mobile onboarding hurdle is achieving convenient, secure and compliant ID document presentation and authentication. In March, at BAI Payments Connect 2016, mobile deposit software pioneer Mitek, headquartered in San Diego, demonstrated their new product, Mobile Verify, capturing the most attendee votes to win the Innovation Showcase Award. In the interview below, we asked Sarah Clark, Mitek’s general manager for identity solutions, to explain how Mobile Verify can help banks with mobile account opening:
Q: What mobile onboarding problems does Mobile Verify address?
Clark: Onboarding a customer requires ID verification, typically a driver’s license in the U.S. Our experience, drawn from our mobile deposit interactions, shows that the biggest mobile onboarding hurdle is the verification step. For customers, it’s the hassle of physically presenting an ID document at a branch or – if they even have access to one – via a fax machine. At banks, it’s the manual processes related to verifying document authenticity.
Q: How does Mobile Verify provide a solution?
Clark: By extending our mobile deposit technology, Mobile Verify enables bank customers to take a picture of their driver’s license, passport or other type of government-issued ID with their smartphone. Then, our platform captures, extracts, and authenticates the information. Printed data, such as name and address, gets automatically populated onto a mobile account application form. Embedded enhanced security features – which are imperceptible to the human eye – get analyzed by our advanced algorithms and either instantly verified or, if questionable, sent to a live person.
Q: How did Mobile Verify evolve from your company’s earlier focus on mobile deposit solutions?
Clark: During our interactions with banks, we learned about the ID verification pain points. So, in 2013, we introduced “Mobile Photo Account Opening,” the predecessor to Mobile Verify, which could authenticate U.S. driver’s licenses.
To take our solution to a global market, we acquired the Netherlands-based company IDchecker about a year ago, integrating both technologies to become Mobile Verify. Today, we can authenticate approximately 3,500 types of ID documents across multiple countries worldwide.
Q: What challenges did you have to overcome to create Mobile Verify?
Clark: There were two main challenges: physical and logical. Physically, many government-issued ID documents have coated surfaces that reflect light. From a camera’s perspective, this is very different from uncoated checks, requiring investments in computer vision technology.
Logically, we needed to engineer software with algorithms and intelligence for authenticating an incredibly wide range of documents. For example, a single U.S. state can have various generations of drivers’ licenses in the field as well as various license versions – such as standard automobile and under 21. The key to our U.S. effort was partnering with the company that prints the majority of domestic driver licenses with embedded security features.
Q: Did banks express any concerns banks about Mobile Verify?
Clark: Originally, our product was mobile-app based. However, banks pointed out that prospective customers had little incentive to download an app. So, we evolved Mobile Verify to work within a web browser experience, enabling banks to integrate it into a mobile-optimized website. As part of this process, we also made improvements to provide the end-to-end security that banks require from a Web-based solution.
Q: Do you have competitors in the market and, if so, how are you differentiating Mobile Verify?
Clark: We have handful of direct competitors, as outlined in the January 2016 Mercator Mobile Account Opening: Adjusting to a New Normal report.
Q: What benefits have banks seen so far?
Clark: Key benefits include enhanced user experiences – which translate into more accounts opened – and improved banking operations. Without mobile-enabled identification verification, our research shows that 15% to 40% of mobile account openings fall into the “pended queue” due to the ID document requirement. Of those, 90% never take the steps required to provide a physical document. Therefore, these solutions can drive up mobile onboarding success rates by as much as 35%.
Operationally, we’ve seen banks reduce manual ID document verification processes from five days, and multiple individuals, to instantaneously, with little or no human involvement. Although total savings vary from bank to bank, clearly the opportunities are significant.
Q: Can you look into the future and tell us what it holds for integrated receivables and Mobile Verify?
Clark: In addition to expanding the types of documents we can verify, we’re adding new identification and analytics capabilities, such as pairing existing authentication abilities with biometric technologies. Or, for individuals without credit histories, pairing ID documents with emerging data sources for verifying authenticity. Our goal is creating holistic authentication solutions.
Ms. Gabriel is a contributing writer to BAI Banking Strategies based in Minneapolis/St. Paul, Minn.