Identity Fraud Practices Used by North American Banks Risk Falling Behind in Digital Era
- FICO today released a
Customer Identity Management Surveythat found banks across the U.S.and Canadaare struggling to meet consumer's digital banking expectations, particularly around identity management.
- The impact of a bad digital banking experience can be costly to banks, as a previous FICO consumer survey found that 23 percent of customers would abandon opening an account if forced to prove their identity via another channel.
- Only 49 percent of North American banks presently use digital methods to capture or verify identity when opening personal bank accounts (i.e., checking accounts).
- 75 percent of banks in the
U.S.and Canadaare planning to invest in an identity management platform within the next three years.
FICO, a global analytics leader, today released a
Despite COVID-19 quickly turning online banking into an essential service, the survey found that financial institutions across
"The pandemic has forced industries to fully embrace digital. We now are seeing North American banks that relied on face-to-face interactions to prove customers' identities rethinking how to adapt to the digital first economy," said
The study found that only up to 16 percent of
Creating a frictionless process is key to meeting consumers' current expectation. For example, according to FICO's recent Consumer Digital Banking study, while an overwhelming majority of consumers (75 percent) said they would open a financial account online, nearly a quarter of prospective customers (23 percent) would abandon the process due to an inconsistent identity verification process.
The lack of automation when verifying customers' identity isn't just a pain point for customers – 53 percent of banks reported it problematic for them too. Regulation intended to prevent criminal activity such as money laundering typically requires banks to review customer identities in a consistent, robust manner and this is harder to achieve for institutions relying on inconsistent manual resources.
Fortunately, 75 percent of banks in the
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Elizabeth Warren, 404-246-8324, ElizabethWarren@fico.com