There is a quiet revolution going on in the banking world as a result of Covid-19. Consumers are shifting their banking habits from in-person interactions to online banking, and both the megabanks and digital banks are taking note.
Starting in 2019, the trend to open checking accounts through online digital channels exceeded in-branch openings and has continued in 2020 with the volume of digital account openings up 66% YOY in 2020.”
What does this new banking trend tell us about the shift in customer mindset and what new problems does it create?
For decades, in-person human-assisted banking has been a leading factor in customer satisfaction. Traditional banking customers prefer to walk into a local branch for their banking needs, whether it be account opening or applying for a loan. This face-to-face system provides a level of identity security and trust that the customer and the bank gain from that in-person interaction.
With the “new normal,” where everyone is staying at home more often and making purchases online, it is only natural that the new online consumer mindset translates to more digital banking.
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Temporary closing of branches is another factor that accelerates consumers’ need to feel comfortable handling their banking needs online, and financial institutions need to accelerate their efforts in providing the most trusted and secure digital experience.
Recognizing the need to replace the traditional face-to-face identity confirmation of live in-person banking, Ekata explored building an innovative solution uniquely tailored to issues related to account opening. By looking at the capabilities of Ekata’s Identity Engine and the needs of the consumers from an account protection perspective, Ekata was able to develop its newest product – the Account Opening API.
Designed and built specifically to support a bank’s customer onboarding strategy, the Account Opening API gives banks the opportunity to streamline the onboarding experience for good customers while simultaneously enabling identification of those individuals who do not belong – fraudsters.
Give a better first impression.
Like all Ekata products, the Account Opening API is powered by the Ekata Identity Engine. Our Engine constitutes two main components – the Identity Graph and Identity Network. Taking into account five data inputs – name, phone, address, email, and IP address, the Identity Graph helps validate the digital identity elements and how they are linked. Along the same lines, the Identity Network analyzes how those identity elements are being used.
By passing an email or phone input along with the IP address, the Account Opening API leverages machine learning models to assess the risk of an account application based on how identity elements are being used. Unique to this product are three network signals:
- IP last seen days – Designed to capture the frequency of an IP address being seen on the platform, one that is seen more recently usually bears higher risk than one that was seen three months ago. It is not common for good customers to create multiple bank accounts within a short period of time. Fraudsters, on the other hand, may be more inclined to cluster fraudulent account creations using proxy IPs or public wifi.
- Phone last seen days – Similarly, good customers do not typically sign up for multiple bank accounts frequently, so their phone numbers would not appear on the platform often. Fraudsters may try to use burner phones or SIM card swaps to help mask their activities when they need a mobile device to help validate their accounts during the creation process.
- Phone and email first seen days – Contrary to the other two signals, this signal does not show when the identity elements were last seen but rather when they were first seen together. The combination of the phone and email identity elements help capture those instances where fraudsters tried to use disposable or temporary email and phones. These are often created recently and they change frequently. Hence, the longevity of the elements seen together could mean that they may be of lower risk.
These are three of 18 attributes that the Account Opening API returns as insights in validating the legitimacy of the account opening application. By conducting this initial assessment, you can benefit from weeding out the bad and focusing on providing the best experience for your good customers.
Make it a lasting impression
Consumers are adapting and becoming more open-minded as to how they conduct their personal businesses every day. At the same time, they expect good customer service and their tolerance for poor experiences is low.
By implementing a sound risk assessment strategy in onboarding your customers, it allows you to tailor a trusting and seamless online application experience, alleviating the fear that they may have in establishing an account and putting their life savings into it. All the while, the implementation would help fight those who are finding ways with stolen and synthetic identities to try to get onto your platform.
To learn more about our Account Opening API and schedule a demo or historical data test, please visit our Account Opening API page.