In an increasingly digital world, IDnow has seen a huge uptick in customers who increasingly value quick and easy identification, and appreciate the freedom of choice when selecting their preferred identification method. In addition, businesses who offer multiple choice and a frictionless ID Verification experience will see a large increase in conversion rates.
As a strong advocate of NFC technology, Chief Product Officer Vikas Seth at IDnow is at the forefront of implementing this technology as part of its AutoIdent product to enable slick and secure customer verifications, whilst combatting fraud.
In this article, Vikas explains why NFC is an important component to a modern ID verification and authentication process in a borderless, digital environment – and how this geriatric technology is fundamental in delivering the most value to all industries, particularly with streamlining financial services.
NFC (near field communication) technology has been around for a while now and is commonly used to enable contactless payments from cards or devices such as smartphones and watches, usually via a digital wallet such as Apple Pay or Google Pay etc. It’s also widely used in ePassports to enable swift ID verification at airports.
NFC technology is used for extremely secure purposes. So why not give it a bigger role within the ID Verification and authentication journey? This is particularly true in the highly regulated financial sector with stringent know your customer (KYC) and AML (anti-money laundering) checks, coupled with biometric variables such as ‘liveness’ and biological verifiers, such as fingerprints and selfies, to authenticate that the person is actually real.
This sector is often burdened by legacy systems which makes the customer experience of swift digital transactions cumbersome, joyless and time-intensive – especially when purchasing valuable items such as a house or a car; or even applying for any financial services/products.
Digital wallets are causing a fragmented approach to how NFC technology is used, when it could be swift and accurate if the KYC element was incorporated into it, making the whole transactional process more accurate and less liable to fraudulent activities.
NFC – The borderless payment warrior
A number of European countries including Portugal, France, Germany, Switzerland and Austria are implementing changes to laws around NFC technology to enable digital identification verification. France, for example, is leading the way with a new digital service for its citizens to allow them to access services on the government’s online services gateway, a system used by banks and other private sector companies as well as government agencies.
Users only have to complete a single, straightforward application in order to access more than 500 government services instead of a separate onboarding process for each one. This is saving them time and makes for a streamlined, user-friendly experience, with the assurance of high levels of security thanks to the KYC elements drafted into the NFC technology.
The process in France involves scanning the biometric chip in their existing authenticated electronic title, in this case, their passport or residence card, which then populates the system with data stored there, including their previously authenticated photograph. When it comes to payments, having incorporated ID verification in the transactional process only adds to its appeal. We could be moving into a world where buying a house could be as simple as a contactless purchase!
Perhaps the most exciting prospect for NFC technology is the way it seamlessly works with other biometric measures because there is no degradation to the quality of the ID on the chip, thereby making it faster, easier and more accurate when completing the checks. This is an essential component to AML checks as knowing your customer and where the finances have come from guarantees the authentication of the person.
There is also an additional layer for authentication as retrieval of ID from a digitised imprint on a chip is harder to manipulate than with a paper document or even with OCR (Optical Character Recognition), which makes similarity fraud aggressively difficult to pursue. Take, for example, the onerous house buying/conveyancing process which incorporates human verification of ID documents. Humans can make mistakes and cannot always spot a fake. NFC will instantaneously remove this layer thanks to the imprint on the chip.
In countries like France, Austria or Switzerland, citizens will be required to use their smartphone to record a short video selfie, capturing their face from multiple angles with movement and different expressions which can then be compared to the photo held in their biometric passport. Not only does this provide accurate verification of the likeness, but also serves as a proof of life. Furthermore, images are not stored and cannot be copied using NFC technology, making them highly secure. The verification video is deleted as soon as the ID is authenticated by comparison with the biometric photo.
This high level of security also provides the user with an increased level of control over their own data. And as the world learns to live with Covid-19, degrees of social distancing and sanitisation are now part of our lives, and NFC guarantees less physical traction thanks to its tap-and-go status, offering a more hygienic version to government-issued ID documents.
The possibilities of NFC technology to guarantee a frictionless financial user experience whilst also combatting fraud, are endless.
In the world of payments and purchases, it makes complete sense to collaborate digital ID verification with NFC technology so that we can continue to build a more secure, safe and borderless payment environment, without the worry of fraud. The proof is already in the pudding with the countries actively pursuing this route.
The fact that NFC technology is being recognised for its precision makes for an opportunity for countries to streamline their financial and ID verification services and place a more unilateral trust in its abilities. It’s time to credit the true power of NFC and its vital role in our financial lives.