Safeguarding consumers and mitigating fraud have always been top of mind for financial service providers. Now that 75% of consumers do their banking online¹  – these challenges have become even more important and even more difficult to solve while still relying on traditional identity verification and onboarding processes.

How can financial institutions, reliant on paper-based processes and at the mercy of complex regulatory requirements like KYC (Know Your Customer) provide digital-savvy customers with seamless experiences without compromising compliance or security?

The solution is much simpler than you might think: Identity verification technology. 

In this blog post, we’ll explore how financial institutions can remain competitive in today’s ultra-crowded marketplace – embracing new and more secure ways to offer customer-centric solutions while ensuring FINTRAC compliance and mitigating the ever-increasing risk of fraud.

Risks of paper-based processes

Financial institutions currently find themselves grappling with three major challenges:

• Increasing fraud 
• Cumbersome KYC compliance
• Digital-savvy consumers

In order to thrive in today’s crowded fintech space, they must find a way to marry the three. 

Mitigate fraud risks

The Canadian Anti-Fraud Centre (CFAC) reported $554 million in total fraud losses in 2023². Considering only 5-10% of all fraud connected to Canadian victims is reported to the CAFC – these numbers were likely a lot higher³. As the #1 breached sector in 2022⁴, financial institutions can’t afford to rely on old methods to combat these new and increasing risks.

Turning to an identity verification solution is a great place to start. Identity verification that’s easily embedded in a customer onboarding flow mitigates the risk of fraud by eliminating the reliance on vulnerable paper-based identity documentation. Organizations can enable layered verification using a combination of provincial credentials, government-issued documentation, and financial institution credentials to be sure that a customer is who they say they are, all while enabling the process in real-time.

Enable KYC compliance

KYC is a very necessary, but very expensive and time consuming part of opening a financial institution account. Consider this:

• Setting up a KYC process can cost anywhere from $1,500 to $3,000 per customer⁵ 
• 40% of the time a customer spends onboarding is consumed by KYC and FINTRAC regulations⁶
• $1.4b was spent on AML and KYC data and services in 2021⁷

Identity verification helps enable KYC compliance in a much more streamlined and cost-effective manner, accelerating the onboarding workflow, mitigating fraud, and optimizing operational efficiency. In Canada, DIACC and participating banks⁸ have determined potential net savings per institution at or above CAD $100 million per year through operational efficiencies created by reducing manual processing costs and fraud. 

Digital-savvy consumers

In the crowded and competitive fintech marketplace, consumers are in the driver's seat. They have the power to choose which provider to support; essentially driving which institutions thrive and which do not. Top of mind for these consumers when they are selecting their provider of choice are privacy, security, and convenience:

• 55% of consumers say that security is the most important aspect of their online experience⁹ 
• 77% of consumers report that their experience opening an account can make or break their relationship with a brand¹⁰
• 68% of consumers have discontinued their efforts to obtain a financial product due to lengthy application process as is commonly the case with KYC compliance¹¹
• 33% of consumers distrust banks when it comes to handling their data¹²

Financial institutions need to provide customers with the perfect balance of speed, security, and customer-centricity, or risk getting left behind.

An identity verification solution provides a simple path forward to meet these needs. Not only does it make the identity verification process faster and more secure with layered verification, it helps enable KYC compliance and delivers the seamless experience that consumers demand. 

Adopting a digital trust solution

Oliu enables real-time identity verification, while supporting KYC compliance and putting customer experience first. Our simple, integrated API solution will have you up and running within days, without a massive implementation cost.

As the first DIACC PCTF-certified service provider¹³, Oliu’s identity verification and authentication platform provides:

• Real-time, layered identity verification
• Fraud mitigation
• Increased automation for operational efficiency

Next steps

52% of financial services providers have increased their deployment of ID verification technology in 2024¹⁴ – it’s time for you to join the trend. 

Join us on the journey towards greater trust and transparency in the digital age. Together, we can shape a future where identities are protected, data is secure, and consumer confidence is unwavering. 

Get in touch with an Oliu Solutions Expert today. 

ATB Financial was created by the first Social Credit government of Premier William Aberhart on September 29, 1938, after earlier attempts to impose government control over banks operating in Alberta were thwarted by the federal government. The first Alberta Treasury Branch was opened in Rocky Mountain House on September 29 of that year. ATB Financial is the most significant surviving remnant of social credit economic policies in Alberta.