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Tough AML and KYC procedures can make for complex apps, warns expert

Jukka Yliuntinen, Vice President at Giesecke+Devrient

Rigorous anti-money laundering (AML) and know-your-customer (KYC) procedures, can create difficult-to-use and complex bank applications, warned an ID expert.
“Regulation can create consumer frustration,” said Jukka Yliuntinen, Vice President at Giesecke+Devrient and Mobile Security and Co-Chair of Mobey Forum’s Digital ID Expert Group. “Research shows that 40% of consumers have abandoned an application, with the amount of information required and the time taken the main causes of drop-outs. Forward-looking banks, therefore, are effectively using digital ID to improve the consumer experience by streamlining previously arduous processes.”
This, in combination with regulation such as PSD2, he said, is a potential catalyst for innovation: “If banks can already provide strong identities to their consumers for their own services, why can’t they do it for others?” he queried. “By leveraging the trusted identity to enable access to other services, through a network of third-party providers, banks can deliver effective identity solutions across an array of use-cases. For banks, this is a significant strategic revenue opportunity, as well as an important element to stay relevant with consumers. For third-party providers, the vexing and expensive challenge of establishing identity is solved.”
He cited collaborative efforts such as BankID in Norway and Sweden, Verified.Me in Canada, TUPAS in Finland and NemID in Denmark, as schemes that see multiple banks band together.
“Developing strategies to deliver seamless, interoperable digital identity solutions across borders is the billion-dollar question for the global financial industry,” he concluded. “The eIDAS regulation, which makes the identity checks carried out in one EU country valid in another, came into force in late 2018 and could set the wheels in motion for frictionless digital identification. Are we moving towards a universal model for digital identity? Only time will tell. What we do know, is that banks have the consumer buy-in, data, regulatory know-how and established expertise to establish a dominant position within the digital identity ecosystem. It is apparent, however, that collaboration will be essential to quickly expand their service offering to new sectors. By exchanging ideas, mapping the technologies and exploring the potential business models, banks can both address the challenges and seize the opportunities.”

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