New Report: U.S. Banks Prioritize Security at the Expense of the Customer Experience

U.S. banks are making the online onboarding process unnecessarily complicated and missing some key opportunities to improve security and the customer experience, according to a new report from iProov, the leading provider of automated authentication technology for Genuine Presence Assurance.

The report, Online Security for U.S. Banks, was created using research about 20 of the largest retail banks in the United States. From August 3-31, 2020, iProov researchers opened a personal account online at each bank to track the digital onboarding process—from initial website or app contact through online ID setup and account funding.

While banks must meet KYC (Know Your Customer) requirements, the research found that the banks tested varied greatly in terms of their onboarding processes:

• 65% of banks did not allow users to set up an account via a mobile app
• 50% required three pieces of ID to open an account online
• 45% of accounts took more than two days to open and fund
• 20% required the customer to come into a branch or complete the process over the phone – full online onboarding was not possible
• 35% required more than 20 clicks for onboarding; one bank required 39 clicks, while another onboarded a customer in fewer than 10
• 75% had four or more password requirements

Additionally, more than half (55%) required new customers to remember detailed credit events from their past. Responses were required within a given timeframe or they were incorrect. Interestingly, several of the test consumers were not able to remember these financial moments from their own past.

Some 40% of the test accounts had additional levels of security to fund new accounts, including trial deposits of small amounts, confirmation that the funder resided in the same Zip code as a bank branch, or a requirement that the initial deposit be made in-person at a bank branch location.

“Biometric technology now outperforms humans when it comes to identity verification,” said Joe Palmer, President of iProov Inc. “An online biometric face scan provides a bank with greater levels of security than asking a customer to go into a branch to be checked by a person.”

Palmer added, “This is a game-changer for financial institutions, because they no longer need to sacrifice user experience for security or vice versa. Genuine Presence Assurance gives banks the confirmation that an online customer is the right person, a real person, authenticating in real time. This can mean reduced fraud losses, lower onboarding costs, and an improved digital customer experience.”

Banks, governments, social networks, and healthcare and travel providers around the world are using iProov Genuine Presence Assurance technology to confirm that online users are who they claim to be. Consumers wanting to open a bank account, apply for a visa or access other secure services simply complete a brief, effortless facial scan using a mobile phone, computer or kiosk.

The scan can be matched to the image in a trusted government identity document, ensuring that the individual is the right person and not an imposter, while a unique colored illumination confirms that they are a real person and not a photograph or video and that they are authenticating right now.