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Digital Identity Verification and its Popular Use with Today’s Digital Banking Solutions

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January 11 2023

Digital Identity Verification and its Popular Use with Today’s Digital Banking Solutions

Is it simply convenience that’s offered through digital identity verification processes?

Three years on and what remains certain for the world is how the pandemic has caused significant changes to how people live. A practical example is found with the way we interact with technology and use the internet to access banking services. Restarting our lives in the ‘new-normal’ necessitates using digital channels and gadgets to fill the gaps between what we used to do ‘in person’ and what we can now accomplish remotely. This is especially relevant in the banking sector, where most transactions (including account opening, loan applications, and payment processing) now take place digitally.

These process improvements are seen worldwide, especially in Southeast Asia. Over the last decade, Southeast Asia’s digital economy has expanded at a pace never seen before. According to a 2018 analysis issued by Google and Temasek, the combined digital economies of Singapore, Thailand, Malaysia, Indonesia, Vietnam, and the Philippines are expected to grow to $200 billion by 2025. Impressively, this figure has increased by 80 percent since the pandemic, due to pressures from new business practices.

Small and medium-sized businesses (SMEs) were compelled to adopt digital services and transform themselves into ‘digital merchants’, according to the 2021 Google Temasek Bain Report. Both online customers and merchants have had to adapt to this ‘new normal’, which prioritises speed and service reliability more than ever before. While these new habits have opened up tremendous business opportunities, they have also introduced threats like data security, privacy, and digital exclusion. These threats can be mitigated by developing a more secure and reliable digital identity process, such as digital identity verification.

The term ‘digital identity verification’ refers to establishing a person’s credibility online via their digital footprint. Confirming one’s identification digitally is gradually becoming the norm, replacing older, more tedious methods. Furthermore, the proliferation of identity verification software solutions suggests that the term ‘digital identity verification’ will likely be shortened and normalised simply to ‘identity verification’ over the next decade. A study from the McKinsey Global Institute indicated that well-implemented digital IDs may boost GDP by 6% in a developing country by 2030 and 3% in an established economy.

With digital identity verification, many banks and other financial institutions have made it easier for people to create accounts and use their services. However, customer data and account safety should be at the forefront of any decision to deploy digital identity verification. This means considering all applicable security, anti-fraud, data privacy, and compliance standards.

OneConnect Financial Technology provides a service that helps ensure the integrity of digital identity verification processes. Our solution, Cognito features an exceptional eKYC Solutions AI-Powered Identity Verification function. With Cognito, financial institutions can enjoy high accuracy levels, increased productivity and operational effectiveness, improved client experience, reduced running expenses, and accelerated turnaround times. Additionally, financial institutions can enhance the security of their mobile banking.

At OCFT, we also offer solutions for businesses and financial institutions that enable digital transformation. These digital transformations increase revenues, reduce costs and manage risks. Click here to learn more about our products.

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