Why Your Face Will Become Your Main ID

In recent years, the payments industry has been actively putting the “Less paperwork” slogan into practice. Even before the Covid-19 pandemic, process automation was going full steam ahead, but now the coronavirus seems to make it soar even higher. I spoke to Alexander Kaufher, xpate Head of AML (Anti-Money Laundering Department), to figure out how identity-verification automation is working and why electronic identification will be used for up to 90% of all applications in 5 years.

Before and after the pandemic

— The payments industry is actively fighting against money laundering and financing of terrorism. During the Covid-19 pandemic, the external circumstances have changed, but the goal of AML is still the same -to make sure that the client is not blacklisted. We have to thoroughly check compliance with legal regulations and be confident that the merchant has the right to provide the declared services. For instance, merchants must have the appropriate license or permission, act in accordance with the requirements of VISA and MasterCard and their transactions must exclusively comply with the declared activity. 

Before the pandemic, the whole world used a common procedure for opening an account in a bank or payment system. You had to visit the office with the pack of documents in your hands. It allowed the bank to identify you, check the legitimacy and authenticity of your documents, copy and notarize them. During self-isolation, it became no longer possible, so the companies are switching to online identification. 

Before the introduction of social distancing, electronic identification represented approximately 40% of the total number of applications. Now it’s the only way to work with clients

Smile for the camera

We use the Sum&Substance service for electronic identity verification, but in general all similar products work according to the same scheme. During the registration we ask an applicant to take a photo of a passport or ID-card. In just a couple of seconds, the program checks the acquired data for membership in terrorists organizations, applicable restrictions and sanctions lists, the passport’s MRZ-code, expiration date and many other things. After that we ask the person to make a selfie. It helps to compare the biometric data with the passport. The program can easily distinguish an actual person from a photograph put in front of the camera. Moreover, right after turning the camera on, it begins to record a video. So we know that the person is actually taking pictures and does it voluntarily. The service automatically compares the person’s data with the company’s registration documents and verifies that this person is authorised to sign documents or open accounts. In 3 years fraudsters never managed to deceive this solution. We can say that it is 99% effective, and 1 potential percent is left to supernatural circumstances. 

Now, especially during the quarantine period, E-commerce offers a huge advantage. While all the travel is banned, the Internet is the only way to stay afloat, the only opportunity to save business. It was the technology of electronic identification that allowed us to retain all the clients during a difficult period of Covid-19 pandemic.

The future is here

In my opinion, the only correct way of electronic identification’s development in the future is the creation of a global base of human faces linked with electronic documents. China is one step ahead in it: customers there are to use goBox smart vending machines, where face recognition verifies identity even without your smartphone, so you can show your face, open the door to select the product, and then close it to complete the purchase.

In a short while, all the necessary information will be stored in smartphones. A complete departure from paper is ahead. This is great, as it will guarantee that only the exact person can use his or her data as the access to documents and other important information will be denied without face recognition. Eliminating the possibility of bribery is another advantage of electronic identification. A few years ago it was possible in some countries to get a loan using another person’s passport copy – do you remember that?  Electronic identification wouldn’t allow this to happen. In my opinion, a 90% transition to this technology will take place in the nearest 5 years.

How do you feel about this scenario? Let me know below.