The Role of Biometric Identity Verification for Online Account Registration

Reporting in Republika newspaper, the Chief Executive of Banking Supervision of the Financial Services Authority Heru Kristiyana assessed that the two-year period of the Covid-19 pandemic was encouraging digital transformation efforts in Indonesia’s banking sector. The public expectations for faster and more efficient financial services has led to increased demand for digital acceleration.

OJK Regulation (POJK) No.12/POJK.03/2021 strengthens institutional regulations, including requirements for the establishment of new banks, operational aspects, and business termination, including simplification and acceleration of licensing for the establishment of banks and office networks, increasing capital for banks, and business process arrangements such as digital services, or the establishment of a digital bank.

Digitizing Banking Services

Conventional banks are also digitizing their services in order to compete with the rise of digital banks, retain old customers and attract new customers from the digital banking target market, in particular the digital savvy Millennials and Generation Z.

Basically, digital banking services are not much different from conventional banking services. The difference lies only in the banking services that can be accessed independently by customers through banking applications on smartphones without the need “o come to a bank branch office.

As part of the onboarding (registration) process, prospective customers seeking to open a bank account are usually required to come and meet the officer in person. The bank needs to “get to know” the customer, a process known as KYC (know your customer). The KYC process is a standard set by the central bank to ensure that the bank knows who the prospective customer is who will open an account.

Whereas the conventional registration process took days, now the process can be more practical with digital onboarding (online registration) and biometric verification. Thanks to biometric technology, the verification process takes less than a minute.

According to the laws and regulations on digital identity in Indonesia, biometric identity verification on digital onboarding will be matched with biometric data that is already available on a resident identity card or KTP. By comparing the two, the system will easily verify customers more accurately and reliably.

It is undeniable that identity fraud is a common occurrence in the cyber world. Usually, a fraudster will pretend to be someone else by carrying the identifying information obtained.

The biometric identity system is used when someone wants to use a ‘fake’ face to trick the system, by wearing a mask, for example. If the biometric system is equipped with Liveness Detection technology, access attempts by impersonating an identity may be denied. Liveness Detection technology is an additional protocol that is needed for access, and proves that the user who is accessing the system is a live and active person.

After getting to know potential customers digitally, banks can also provide agreement documents digitally. Prospective customers need to agree to these agreement documents in order to finally be able to access financial services. Document validation can be performed to check whether the integrity of the document is maintained or tampered with after it has been signed.

What are the Advantages of a Biometric Identity Verification System?

If your banking service is considering using a legal and trusted biometric identity verification system, here are the benefits that can convince you to no longer use conventional identity verification:

• Modern biometric identity verification technology can be used for massive scale identity verification in a short period of time. It is not surprising that this system has been used by governments, banks, financial institutions, and various other industries.

• The biometric identity verification system can also identify a person correctly, accurately and consistently, one of which is through facial recognition. This reduces errors in recognizing someone because of a facial resemblance or forgery.

• Biometric identity verification makes access easy, because you don't need to carry around verification tools such as cards or other devices. Simply showing the relevant biometric data will enable identity verification to be carried out. Thanks to biometric verification technology, the transaction authentication process has become easier.

• A password or personal identification number (PIN) is an identity verification system that is easily forgotten. However, writing it down will increase the risk of access theft. Using a biometric identity verification system guarantees that access data will not be lost or falsified, because it is physically part of the person.

• Access difficulties due to technological illiteracy can also be minimized using biometric technology for identity verification. It is easy to show the data for verification without intervention or guidance from other parties, or the need for special training.

• Biometric identity verification technology can record all activities more precisely because it is carried out by a computer system. Every entry and exit access can be easily identified. This will also increase the accountability aspect of the security system so that it can be trusted and relied on.

• The problem with verifying identity using the device is the risk of damage such as the card being lost, broken, burned or the like. Meanwhile, biometric technology is not easily damaged because the data used is very diverse, such as retina, fingerprints, sound vibrations, DNA, blood flow, heart rate, and so on.

• Because verification data is unique to a single person, the biometric verification system can only be accessed by one person and cannot be faked by others.

In Indonesia, you can trust PT Indonesia Digital Identity (VIDA) for your biometric verification system. At VIDA we uphold consumer protection principles such as data privacy and data security which must be maintained in the identity verification process. If you are looking for a trusted information security system service provider for the digital onboarding process, contact us here.