Across the globe, video authentication is being used by digital banks to approve new customers who sign up for their financial services. Banks in India, UK and United States still require a physical face to face meeting. This is not only inconvenient but is fast turning into an outdated form of customer verification. In fact some archaic banks in India even go to the extent of asking for endorsements from references to open a new bank account. Without a reference from existing customers of the bank, the bank can decline to open your bank account. This practice is mostly prevalent in the public banking sector.
While banks in India may not be keen on simplifying customer on boarding, a few Europeans startups are showing how Video Authentication can be used for rapid expansion. Across Europe, banks are scrambling to support video authentication so that rivals do not steal a march over them. Currently Video authentication by banks is accepted in Germany, Netherlands and Austria. In the rest of Europe the laws for it’s regulation are in place and banks are beta testing their services. Some of the new age banks that support video authentication are :-
Erste Bank – It was one of the first banks to introduce video based customer authentication in Europe. The company rolled out video identification within three weeks of the law being approved. This service ensures you no longer need to visit bank branches and wait in long queues to complete your enrollment as a bank client. All it takes is a few minutes of video chatting with the bank’s employees where the customer needs to show a government issued ID such as a passport or driver’s license to complete the process. The bank claims to have seen a 40% increase in online applications for opening a bank account since it introduced this new feature. With the introduction of video chat for authentication all it takes is 10 minutes to open a new bank account in Europe.
N26 is a German bank with headquarters in Berlin, Germany. It offers a free basic current account linked to a Debit MasterCard. The company had close to 300,000 customers across Europe in early 2017 and had plans of expansion in the UK. The award winning digital bank does not charge for any basic banking transaction but has a limit on the number of ATM withdraws. Their banking app also provides customers with the ability to block / unblock their debit cards with a single click. The most attractive feature of N26 is the over-draft facilities they offer to new customers within a few weeks of enrolling for it.
In India bank account holders were promised over-draft facilities under PMJDY more than three years ago but not a single bank has lived up to it’s promise. If you go through the comments section of our article above you will see the section inundated with pleas from PMJDY account holders crying out for a simple overdraft of US$ 50. This shows the qualitative differences in banking in the developing world and developed economies like Germany.
Fidor Bank is another online bank founded in 2009 in Germany. It launched operations in UK to a mixed response from the public. The money saved in this bank is not covered under the FSCS protection but that has not deterred it from signing up new customers. It has launched a standard current account and six different types of savings accounts. It currently does not offer an over-draft service unlike it’s rivals. The biggest plus point of Fidor Bank is that it does not require a credit check unlike other UK Banks.
IDNow, a company that offers video chat approval platform has benefited by this turn towards facial recognition. The company holds several patents in this field and has been hired by some of Germany’s top banks. It’s services are being used by several FinTech and InsuranceTech startups. The company is also a finalist for the 100 Fintech Companies in Europe Award and is all set to dazzle banks across the globe in the coming years.
Future Of Video Chat Authentication and Facial Recognition
Work is underway to eliminate the human component of video chat authentication. Right now verification is done by a face to face conversation between two humans. However this could change in the coming years as chat bots evolve to perform this basic service. Some AI and machine learning startups in China and the United States are already working on facial recognition for banking transactions.
So readers gear up for the future, where you can open bank accounts by video calls with chat bots who will use facial recognition to determine your eligibility for a new bank a/c. Soon this service might expand to getting credit cards, buying insurance and many other financial products. It’s time to try out these new banking startups from the comfort of your laptop. Let us know about your experiences in the comments under this article.