New research by Prepaid International Forum (PIF) reveals how innovative technology is making it easier for genuine customers to open prepaid accounts, whilst successfully preventing criminals from committing fraud and other crimes.
PIF, the not-for-profit trade body representing the prepaid and fintech industries, reports that as the market for new ways of banking grows, the opportunity for criminals to fraudulently access consumers’ accounts will grow.
However, a report produced in association with identity verification specialist HooYu, shows that the prepaid and fintech companies who offer these new types of accounts are winning the war on identity fraud after implementing a wide range of innovative technologies.
For example, geo-location, which identifies a person by location, facial recognition technology, which identifies a person from a digital image and document validation technology, which helps to establish the authenticity of ID documents like passports, are just some of the cutting-edge technologies being used to quickly identify and accept genuine customers, but also deter fraudsters.
Unlike traditional methods that are still used by many high street banks (such as showing a passport to an untrained cashier), these new, advanced methods of identification are far more secure.
Diane Brocklebank, spokesperson for PIF, says:
“The prepaid fintech sector is at the forefront of developing innovative financial services to harness new technology in ways that better meet customer needs and changing lifestyles.
“As an industry, we are also very aware that this innovation needs to go hand-in-hand with robust measures to prevent its misuse by those seeking to move money for criminal purposes.
“In order to track progress against this objective, PIF has undertaken a detailed review of the technologies and procedures the prepaid sector uses to open accounts for new customers.
“The results of our review highlight the prepaid sector’s success at balancing the need for compliance with providing an optimum user experience by allowing legitimate customers to get up and running (in the majority of cases) within 15 minutes. Those requiring additional security can be cleared as quickly as possible (100% within 2 days) or, in the case of dishonest users, refused.”
The report found that an increasing number of prepaid account providers are using more innovative techniques that are much harder to cheat but are still quick and easy for customers to use. For instance, 43% of customer identity checks will use geo-location to check the customer’s location tallies with the data given in their application. And 57% of account providers will examine the applicant’s digital footprint and social media accounts to gain further confidence in the customers’ identity.
David Pope, marketing director at HooYu, which advised on the research commented: “We live in an increasingly networked world, and this has enabled prepaid and fintech firms to adopt innovative solutions to quickly identify and accept genuine customers while cracking down on potential criminal activity.
“This new blend of technology being used by these organisations not only means that the customer experience is improving dramatically, but customers can open accounts much faster and easier than ever before. It also means the information being gathered is far more useful and robust, meaning additional checks are able to be made making life easier for genuine customers and helping to prevent fraud and criminal activities.”