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Exploring the digital grid of client acceptance, comfort, confidence, and risk of fraud.
FREMONT, CA: Mobile and online banking have redefined the expectations of user experience. No more than millennials and generation Z customers, particularly in digital channels and transactions, expect immediate gratification. At every point of the client lifecycle, the wholesale push by banks to eliminate friction has mostly failed to contribute to higher fraud. This can be ascribed to significant advances in the authentication of digital identity.
The use of biometric authentication techniques is one of the main reasons why less friction has not led to more online fraud. Bank application designers can readily plug a straightforward restful API into their implementation workflows with the heavy lifting already supplied by device suppliers. These unobtrusive safety capacities, while considerably decreasing friction and fraud, have improved user experience. They also relegate passwords and Knowledge-Based Authentication (KBA) to their proper context.
Thus, while these sophisticated authentication mechanisms dramatically decrease friction and fraud risk, their trust chain is based on precise identity verification at the account opening or service registration level. Because of these developments in authentication for renowned users, new customers' identity verification has emerged as the new digital banking fraud battleground. Addressing the task of closing this remaining window needs the same sort of technology and infrastructure that was created for mobile authentication and is coming to web browsers.
Instead, consumers have come to expect the same' low friction rate' in the opening of a new account that they are used to when authenticating their current accounts.
Fortunately, developments in Artificial Intelligence (AI) enable live digital data to be generated and thousands of online and offline information points to correlate in real time to make a holistic, precise model of client identity.
These kinds of technological developments achieve levels of reliability that match or even exceed the capacity of human fraud analysts to approve applicants— and relegate KBA to the background for good in the process.