How Alternative Data Can Support Online Banking Authentication
The COVID-19 pandemic has made online and mobile banking a necessity for many consumers. With the increased reliance on digital banking comes a growing need for safer and more reliable identity verification methods. Amid a surge in fraud, banks must navigate online banking authentication without compromising the customer experience.
Alternative data sources like utility bill data play a significant role across the customer lifecycle – helping banks minimize friction, mitigate fraud risk, and adhere to KYC requirements. Read on to learn how you can utilize these data sources to better support online banking authentication.
Minimize fraudulent activity
From synthetic identity theft to fraudulent charges, the shift to digital banking has presented more opportunities for fraudsters. To minimize this activity, processes that once required in-person verification now need to be equipped for digital identity verification. With alternative data, banks can gain additional insight beyond traditional identity verification methods.
Using alternative data provides real-time information to match the real-time online banking authentication process.
Combined with innovative technology like AI and ML, alternative data can help businesses identify suspicious changes in customer behavior and spending patterns. Data is proving to be a main component of fighting fraud in today’s digital economy. In the U.S., consumers make over 30 billion online transactions per day. Using alternative data provides real-time information to match the real-time online banking authentication process.
Reduce customer friction
For many consumers, if they can’t complete the account opening process 100% digitally, they’ll abandon the process. Banks need to implement solutions that provide the necessary security for verifying identity without overcomplicating the process. In a world where people value instant gratification, the less friction there is, the better. Alternative data can help streamline online banking authentication; with fully digital sources, lenders can maintain an automated approach to identity verification.
More than 40 percent of U.S. banks face lost sales due to abandoned applications. By implementing secure solutions that verify identity while remaining online, banks can keep customers happy and improve customer satisfaction and retention.
Maintain KYC compliance
When it comes to winning the trust of consumers, adhering to KYC regulations is key. Over $400 billion in penalties was imposed on U.S. and UK regulators in the year 2020 alone. It should be a top priority for companies to stay on top of compliance with key regulatory policies. Fortunately, with the right technology, KYC compliance can both be secure and seamless.
Over $400 billion in penalties was imposed on U.S. and UK regulators in 2020 alone.
In order for banks to meet KYC requirements, they need to gather and verify customer identity information securely. When financial institutions include alternative data sharing as an option in the onboarding process, they can broaden the scope of ways for consumers to verify their identity. In addition to winning the trust of customers, these organizations will also solidify the verification process by relying on third party-verified sources.
Ensure seamless online banking authentication with digital utility bills
Online banking authentication is critical to the lending process. In a country where 160 million people use online banking regularly, banks need a secure digital system. Urjanet’s alternative data solution enables businesses to digitally obtain customer utility bills directly from the provider, ensuring a secure and streamlined authentication process that banks can depend on.
To learn more about how to integrate automated utility bill access into your authentication without compromising the customer experience, speak with one of our experts today.
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About Honor Donnie
Honor Donnie is a Marketing Intern at Urjanet, with a passion for content creation. When she’s not at Urjanet, she can be found studying Political Science at Clark Atlanta University.