* By Anand Krishnaswamy
Customer onboarding, a term used to describe the entire journey of the customer, from the first contact with the offer to the actual use of the service, is a decisive moment for your business and your brand, especially in the online environment. Friction in digital transactions generates consistently high user abandonment rates across all sectors of the industry: from 76% in retail to 82% in the financial sector1, for example. Research shows that Millennials' 83% would switch banks for a better digital experience and 72% from global financial industry executives believe that improving the digital experience for consumers is the top priority for banks2.
Despite the importance of the client's onboarding journey, it remains a complicated piece and needs solutions that facilitate the process, in addition to reducing the time to completion. Consider, for example, this market sample that explains how the credit card and personal loan application process can take in major international markets. There are clearly significant opportunities to improve the user experience:
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For companies to perform onboarding customers quickly and efficiently, several dimensions of identification and anti-fraud need to work harmoniously. An integrated identity management strategy generates a more comprehensive assessment of a user's profile. In addition, a major benefit of using a multi-layered, rule-based solution is that fraud prevention components are activated only where high risk is detected, ensuring that the consumer experience is impacted only when really needed.
Here are five steps to integrate robust layers of technological defenses and create a secure and frictionless digital environment for users:
1. Establish the consumer's identity
Establishing consumer identity is the first and most crucial step in the fight against fraud. This initiative will help in a quick understanding of who you are dealing with, creating a great experience from the beginning.
Biometric technologies - such as fingerprint reading, facial and voice recognition - open possibilities for improving security at various points of contact with the customer and on various channels, providing opportunities for companies to implement solutions to establish the identity of a consumer.
Technological advances are facilitating interaction with consumers since the beginning of their journey, and this is a global trend. For example, solutions implemented in Hong Kong, the United States and many other markets already allow consumers to complete operations through applications with just a selfie and a photo of their identity.
These innovative solutions support multiple registration channels, such as the online medium (web, phone, SMS, etc.), branches and partner channels. There are three layers to the solution, namely:
• Authentication of identity document;
• Optical character recognition (OCR, in English) for data extraction for identification documents;
• And facial recognition with vividness detection.
In this way, the applicant scans the front and back images of the identification document, using the camera of the mobile device itself, and the solution compares the individual's image with the selfie sent by him during registration. In the capture of the user's photo there is also an identification process, in which there is a preliminary assessment of the vivacity using the facial movement.
The purpose of the vividness and presence test is to confirm that the person, whose selfie was submitted for facial recognition analysis, was present at the time of image submission, proving that no digital or paper replica was used.
The simplification and effectiveness of this mobile solution creates a differentiated and positive experience for the consumer.
2. Perform identity verification
Once you establish who you are talking to, you need to validate whether the person is genuine or not. Several online and offline data sets are invalidated by this verification process: additional insights about devices, location and behavior strengthen the database you already have to verify the identity of consumers.
This mix of personal data, alternative data and verification devices is becoming increasingly important as consumers increase their presence in the digital environment. More than 60% of financial institutions believe that the growth of online interactions has increased the risk of fraud and identity theft4.
The value of strategic solutions, which combine digital and offline identification has reached an inflection point and is reaching high levels.
The value of strategic solutions, which combine digital identification (device, location, email, phone, behavior, etc.) with offline identification and alternative credit data searches (voter identification, insurance claims and vehicle records) , reached an inflection point and is reaching high levels in places like:
• In Canada, businesses are leveraging decision solutions that compare consumer personal data with real-time information, obtained through Canadian mobile phone companies, covering more than 90% of the Canadian population;
• In South Africa, the Philippines and other markets, popular solutions are now combining consumer records with data from digital and mobile devices, allowing companies to build a more targeted identity strategy.
The extensive consumer data sets, whether online or offline, help companies develop a more advanced and unique view of their customers' digital identity. By accessing a global network of fraud and risk information, companies can quickly and accurately identify and target a good customer for potential fraud. And each set of information adds a new layer of protection throughout the processes, making it increasingly difficult for criminals to open fake accounts, defraud existing ones, or carry out criminal operations.
3. Complete checks of financial transactions and possible fraud
By using complementary features, such as information exchange and suspicious watch lists and fraud confirmations and money laundering actions, companies can quickly determine whether a specific transaction is fraudulent or needs to be submitted for further analysis.
This type of information is essential for early fraud prevention and does not only benefit companies: consumers can activate alerts on their credit profiles to be notified of inquiries in their data or attempts to change any details in the system.
4. Use analysis for faster and more accurate prevention techniques
While credit card fraud is still a very real threat, cardless (CNP) or identity-free fraud has increased significantly in mature markets such as the UK and others. Criminals begin to shift PIN and password fraud into sophisticated synthetic fraud. Today, companies need to rely on more advanced techniques to stay ahead of criminals.
The mobile gaming industry provides valuable information on how to do this. Online games are an environment where players expect immediate payments, so risk signals need to be interpreted even more quickly, with intelligence in the use of data integrated with dynamic decision rules.
Here we see simplified multichannel authentication solutions in action: machine learning tools continuously monitor billions of global transactions, looking for subtle device patterns, transactions and accounts that predict fraudulent behavior. Fraudsters behave differently than genuine customers, and in these cases, having processes conducted by the correct analysis can alert companies to this.
Online devices, locations and behaviors are difficult to impersonate. Therefore, systems that can holistically analyze a user's digital footprint and compare it with actual consumer behavior help to deter fraudsters.
5. Authenticate consumers based on the level of risk they present
After establishing a consumer's identity, verifying who they are, completing the necessary checks and leveraging the power of analysis, you will still need to authenticate transactions or interactions. Thanks to your holistic view of the consumer, you can employ more rigorous authentication methods, based on the risk they pose. For example:
• Low risk: send the consumer a unique password or PIN;
• Medium risk: confirm a second access with additional device verification (device-based authentication);
• High risk: do a manual review with specific questions (knowledge-based authentication).
By exploring more comprehensive authentication tools, companies can quickly complete the transaction with more confidence and with the certainty that they are interacting with the right person.
Strike the right balance
When integrating defenses, don't get involved at headquarters by creating quick interactions with your customers. The proper goal is a frictionless experience. Consumers want the feeling of security, which is the knowledge that there are authentication processes in place. They just don't want to be bogged down by them.
The technology and data I mentioned earlier can be implemented to add layers of protection that are almost invisible to users, helping to increase consumer confidence and provide a tangible way to protect them from fraudsters and cybercriminals, while enhancing the experience with your organization.
* Anand Krishnaswamy is VP and Head of Identity Solutions Center of Excellence at TransUnion International
1. SaleCycle Report (2017);
2. TDigital Banking Report, 2018;
3. TransUnion research;
4. Forrester Consulting study commissioned by TransUnion: Fraud Detection and ID Verification in Financial Services (August 2018).
Warning: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies
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