Behind the Idea Europe Fintech Regtech

Behind the Idea: Onfido

Onfido is a global identity verification and management platform – working with the likes of Revolut, Curve, Deliveroo, Remitly and Orange to provide AI-powered KYC/AML services.

Onfido’s service is all about verifying real identity in a remote world, digitally proving a user’s real identity using artificial intelligence, by verifying a photo ID and comparing it to the person’s facial biometrics. This means businesses can see their customers for who they are, without compromising on experience, conversion, privacy or security. That’s how Onfido gives companies the assurance they need to onboard customers remotely and securely. 

Clare Joy, Strategy and Expansion lead, Onfido

Clare Joy is strategy and expansion lead at Onfido, whose team is involved with looking at the future of the business and what the companies market expansion plans will be. 

What has been Onfido’s response to financial technology innovations?

The shift to digital banking required a new approach to customer verification and authentication. Banks and financial institutions were targeting a new generation of digital consumers and needed to find a way for customers to verify their identity remotely without having to go in-branch. Credit bureaus, created 150 years ago, have long been the de facto standard to prove a person’s identity online, but continuous data breaches have undermined their reliability. As it became clearer that the old approaches based on Centralized Databases (such as Credit Bureaus and Knowledge-Based Authentication) were no longer fit for purpose, a new approach was required that would enable a user to digitally prove their real identity without relying on databases.

Financial services and companies are now adopting the new standard for digital access. Modern AI-powered identity verification solutions enable users to prove their identity by verifying a government-issued photo ID (identity document) and comparing it to the person’s facial biometrics. This means businesses don’t have to compromise on experience, inclusion, privacy or security, and companies such as Revolut, Natwest’s Mettle and Oval can confidently onboard customers remotely and securely.

How have things changed over the past few years? 

Two key trends continue to dominate the space in financial services. The first is the continued rise in identity fraud. Onfido’s 2020 Identity Fraud Report revealed that the rate of identity fraud increased 41% over the previous year. What’s more, financial services is yet again the industry with the greatest number of identity fraud attempts.

The second trend is that consumers are becoming increasingly concerned about their security and privacy when signing up for new accounts. Consumers’ top 3 concerns are:

  • Their data will be passed onto third parties (53%)
  • The security of the information provided (50%)
  • Finding that just too much information is asked (37%)

Demonstrating the severity of the issue, more than 4 in 10 (43%) consumers have abandoned signing up for a new account or service because of one or more of these frustrations.

With concerns around information that customers must share as part of the traditional Know Your Customer (KYC) process, the opportunity to use biometrics for authentication is indisputable. Indeed, of the respondents of a recent survey regarding all verification methods, 80% of users trust businesses that use document and biometric checks, compared to those that use other methods (67%).

Is there anything that has created a culture of change inside the company?

Inclusivity and accessibility are deeply rooted in Onfido’s culture. As organisations and services move online, prioritising inclusion and accessibility is a matter of principle for us to ensure groups of people are not left behind. So, it’s imperative that our products and services provide inclusivity and accessibility to everyone.

Onfido recently published an Accessibility Whitepaper summarising the new features we added to the SDK following testing and work we did with Cambridge Simulation Glasses to simulate sight loss, the Digital Accessibility Centre (DAC) and the Royal National Institute of Blind People (RNIB).

Simultaneously, we participated in the UK’s first Information Commissioner’s Office (ICO) Data Protection and Privacy Sandbox to systematically measure and mitigate algorithmic bias in machine learning models. Our goal is to continue building on what we’ve learned as we move forward with our work on accessibility and inclusivity. When creating technologies, we must ensure that they operate fairly for all individuals and ensure that privacy is upheld.

 What fintech ideas have been implemented in Onfido?

We keep our finger on the pulse of fintech innovation and think about how it can be integrated into our service to improve customer experience. Last year, we surveyed customer attitudes and perspectives towards the online service experience and how they were being asked to create digital accounts.

We found that while there has been an overwhelming movement towards using online financial services since the beginning of COVID lockdowns in early 2020, there are increasing security and privacy concerns when opening new accounts. As a result, the rate of abandonment during the account sign-up process has been unusually high.

Customer behaviour shines a spotlight on an opportunity for fintechs to provide a more seamless, user-friendly onboarding process, while still engaging strong security measures like digital identity verification. When asked about emerging methods of identity verification during online account onboarding, over 80% of respondents that frequently use biometrics stated this was a secure and reliable option. That’s why our digital identity verification is grounded in facial verification and AI, getting a user to take a live selfie or video and compare it to a government-issued ID.

What benefits have these brought?

Ultimately, this has had a transformative impact on how our partners have onboarded their customers, bringing the process into the digital age with its superior, frictionless experience. Revolut, for instance, has witnessed a 12% increase in the number of customers onboarded since it deployed our digital identity verification technology. In part, this is because we have delivered digital identity checks 38 seconds faster than the previous provider.

While for TBI Bank, a fast-growth digital lender in Europe, we have accelerated the time it takes to onboard and verify new customers by 80%, while simultaneously reducing the cost to acquire new customers by 66%. Therefore, working with these financial institutions, we have proven that providing a secure and seamless customer onboarding journey remains as important as ever in generating growth, and having the perfect combination of intelligent AI and biometrics is at the heart of it.

Do you see any industry challenges on the horizon?

This year presented new challenges for the financial services industry in preventing fraud. With consumers by and large spending most of their time at home, how and where they’ve purchased goods and services has changed dramatically. This means that risk assessments scores have had to evolve and reflect the new circumstances: red flags which would have prevented a user from signing an online account, accessing a service and making purchases will have undergone an additional round of checks. As fraudsters become ever more sophisticated, many will attempt to cloak their illicit activities amongst unusual spending habits, and so next year, the financial services industry must be prepared to tackle these challenges head-on.

We’re also going to see identity fraud techniques evolving to challenge video identification tools, such as 3D masks and deep fakes. To date, the rate of use of deep fakes has been low as this technology is typically used by amateur hobbyists as a form of entertainment, such as on social media, and sophisticated efforts are less prevalent. However, we saw them being used in identity fraud attempts for the first time this past year. When – not if – this technology is opened up by elite professionals to others through the sharing of open source code, we’re going to see the rate of these attacks increasing rapidly.

Many businesses and institutions are preparing for this and are already moving away from passive methods (a still photo for biometric analysis) to more active methods (a dynamic video). We’ve seen this for instance in the age verification requirements which form a large part of new German gaming regulations coming into force in July 2021.

Can these challenges be aided by fintech?

With the risk of fraud so high in financial services, it’s no surprise that the fintech industry is pioneering new methods that will help prevent this criminal behaviour. Emerging technologies, such as AI and Machine Learning, are enabling identity fraud detection tools that can monitor, scan and process over 4,600 different identity documents types in real-time, while comparing the image to a live selfie. These intelligent solutions are constantly learning, which in turn ensures we stay one step ahead of fraudsters. This level of sophistication is unmatched and is what the financial services industry needs to provide a robust know-your-customer proposition in 2021 and protect their existing users from identity theft.

Final thoughts

As we enter 2021, business leaders have an opportune moment to reflect on how the pandemic has caused an evolution, not a revolution, on the ease of use customers expect in the sign-up experience and to access online services, and the implications this has had on fraud prevention measures. Now more than ever, it is paramount to offer robust, secure, user-friendly account onboarding that enhances the overall online experience. This will not only set businesses apart from competitors in the short-term but will put them one step ahead in combating the increasing rate and sophistication of identity fraud.


  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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