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The many and varied benefits of digital IDV

A robust identity verification program can unlock relevant insights for financial institutions and allow them to provide better service.

Oct 6, 2022 / Digital Banking
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Today’s consumers expect fast, convenient digital experiences. Financial institutions face unrelenting pressure to deliver an onboarding experience that builds trust at make-or-break moments in the customer relationship.

A robust identity verification program can provide banks and credit unions with secure access to identity data to deliver the digital banking experiences customers demand. An IDV can also provide the means to locate, verify and approve more legitimate customers faster and with little to no friction.

How does data fuel customer IDV, and what are the primary benefits your financial institution can unlock using a multilayered IDV solution?

More insights, more revenue

A robust IDV solution empowers financial institutions to gather more customer attributes and data insights with less upfront effort from the onboarding customer. When banks and credit unions have access to deep data diversity, along with powerful technology that helps them understand and act on the knowledge they’ve gained, they can authenticate beyond the primary data points needed for compliance and leverage data for competitive advantage.

A rich array of helpful, practical intelligence is available. The trick isn’t so much accessing this data; it’s about making sense of it all and then acting on it. This is where computing power, proven technologies, human ingenuity and fraud experience and expertise create differentiating value and allow FIs serve customers more effectively while lowering fraud risk.

For example, capturing and fully analyzing aspects a customer’s digital footprint, such as mobile number and IP address, is practically invisible to the end consumer—but it provides the FI with invaluable information about the customer and the legitimacy of the account opening and application.

A more complete picture of a consumer’s identity information allows banks to identify more new customers and serve existing customers more effectively, which then drives revenue. A growing digital landscape also gives institutions the chance to serve individuals who may not have access to credit, utility payments or other documents that help build public records. This allows banks to unlock additional streams of revenue.

For example, roughly 140 million Americans fall into the combined millennial and Generation Z demographicsbut they can be harder than older generations to locate in public or credit records because they don’t have lengthy banking histories. Millennials are now the largest drivers of net new-loan demand, and they are expected to keep that position for at least the next eight years.

For many customers, mobile onboarding is far from optimal. According to IDology’s fourth annual consumer survey, 72% of Americans who started to sign up for a new online account and then abandoned the attempt did so on a mobile phone. Financial institutions that are willing to improve the mobile onboarding process have an opportunity to reduce abandonment rates and win more customers.

Clients are not averse to leaving their current bank for a better experience, either. Our research suggests that more than 30 million Americans are considering switching financial services providers in the next 12 months. Additional research consistently concludes that retaining customers is more financially beneficial than gaining new ones. Data that predicts what customers need and helps institutions create better experiences can generate significant returns and is well worth the effort.

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While customers want a smooth, seamless and mobile-first onboarding experience, trust underpins every customer interaction. That means there’s room for improvement regarding how financial institutions gather and use personal data. Our research finds that 70% of Americans suspect that companies collect data without their permission and close to 60% don’t think companies do enough to safeguard their information.

Developing a holistic consumer identity in high resolution enables a bank to onboard customers quickly and deliver customized experiences. This means fast-tracking access to products and services for legitimate customers and applying friendly friction as needed for suspect identities. Using robust data that fuels IDV makes it possible to keep potentially valuable customers in the pipeline while delivering the speed, simplicity and convenience they expect.

Christina Luttrell is the chief executive officer for GBG Americas.

Explore actionable insights on how financial services organizations can use data to create strong relationships and enhance other business opportunities in the BAI Executive Report, “The power of data: How banks and credit unions can put it to work”