Document-free Digital ID in KYC – Answering your top questions

As promised in my last blog recapping our webinar, 'Modernising KYC: Why Innovators are Adopting Digital ID and What’s Coming Next’, I sat down with our digital identity experts to answer the questions you asked.

From regulatory aspects to customer experience and ease of use, some of your questions gave us an opportunity to dive into topics we didn’t have enough time to cover during the webinar.

In our webinar, 'Modernising KYC: Why Innovators are Adopting Digital ID and What’s Coming Next,' I spoke with digital identity, regulatory, and KYC experts. During our conversation, we deep-dived into the transformative potential of document-free digital identity verification (IDV) for KYC and what lies ahead.

Q: Does the user need to install an app, or is it web-based?

A: OneID® does not need an app, and there’s no need to create an account or sign up for a service. It is a web-based process that can be completed on a desktop, mobile, or across devices.

Q: 2+2 proves an identity exists but doesn't confirm that the person claiming the existing identity is its holder. Many partners of those in relationships will be able to access their partner's banking app (either by knowing their passcode or being able to use their partner's face/fingerprint to unlock the banking app whilst the partner is asleep) - so how does this allow a solicitor to be satisfied that their customer is the holder of the identity?

A: OneID® leverages bank-verified Strong Customer Authentication (SCA) alongside robust bank security layers, including behavioural biometrics such as typing speed or pressure to detect potentially fraudulent activities. This approach offers a stronger level of security compared to alternative methods like SMS, which are easier for a fraudulent partner to bypass.

In the scenario described, where an individual gains unauthorised access to their partner's bank account to perpetrate fraud, additional safeguards come into play. While fraud within relationships is relatively uncommon, by actively monitoring our accounts, the effectiveness of tools like OneID® can be enhanced.

Q: Verifying identity is a huge pain point for us. I run an accountancy practice that depends on word-of-mouth referrals, mostly from other clients. Like most law and accountancy firms, clients are most likely to refer us to others where we "wow" them in the first 90 days, so onboarding - engagement letters and Know Your Customer (KYC) checks are critical. The easier/simpler, the better. What are the convenience/times for the user for digital IDVs?

 A: There are three key benefits of bank-verified digital ID:

1. Accessible anywhere: Physical documents are often left at home, which can add delays to the process if your customers are at work or out and about. Bank-verified digital ID can be used anywhere and any time, the user only needs access to their mobile device or online banking.
2. Speed: The process is lightning-fast, taking only seconds compared to the typical 10-minute document scan process. That’s a lot of time saved and a much better experience delivered.
3. No new passwords: There are no additional apps to download, accounts to create or passwords to remember. Customers simply use the bank app or login credentials they already have, making the process seamless and hassle-free.

Q: You mentioned OneID® is the most inclusive verification provider, reaching 90% of UK adults. What are the figures of people who do not have a passport or driving licence? Typically, you need one or the other to create a bank account.

A: According to the Office for National Statistics (ONS), 13% of people in the UK do not have a passport. The Department for Transport data shows that 25% do not hold a driving licence. However, banks do accept a wider variety of identification documents than these traditional forms to open a bank account. The growth of digital banking has meant more individuals have access to online banking than those with photo ID documents.

Q: Where can I experience bank-verified digital identity checks for KYC?

A: Visit our demo page here, to experience the speed and ease of OneID®.

Q: To take the view that "the bank has done the KYC, with documents, etc." is reliance. Under the regulations, where a regulated firm relies on another party (here to bank), there must be a Reliance agreement.

A: When an account is opened, the bank conducts its own KYC checks. However, at a later stage, OneID® uses the bank account as an independent source of evidence, adhering to the rules outlined in the UK Government’s Digital Identity and Attributes Trust Framework (DIATF) for a distinct KYC process when employed. It's important to note that this doesn't entail relying on the original KYC process. Additionally, a second independent source of electronic evidence is incorporated. If the receiving party prefers to rely on the original KYC and has an agreement, this option can also be facilitated.

Q: How expensive is a bank-verified ID check versus a document-scan check?

A: Legacy solutions often require building additional security technology and may rely on costly manual checks. On the contrary, OneID® uses the existing open banking infrastructure and the investment in technology banks have already made. This approach makes it cost-effective and cheaper than document scanning options, creating a win-win situation.

Here's how much ID checks with OneID® really cost.

Q: What do the regulators say? Simply logging into a mobile app does not seem to prove that a company is dealing with the identity holder. It could be anyone with access to the holder's device.

A: Banks employ Strong Customer Authentication (SCA), which offers multiple security layers beyond what's typically in a mobile app. OneID® enhances this security framework by adding a certified ID process on top of the SCA protocol, incorporating additional checks to ensure the correct individual is accessing the system. We recently executed an onboarding project successfully within the FCA sandbox without encountering any issues or concerns.

Q: When will the trust framework be put into place?

A: The UK Digital Identity and Attributes Trust Framework (or DIATF) is already in place in a 'beta' format. It will become a 'live' framework once the Data Protection and Digital Information (DPDI) bill becomes law later this year.

Q: Any specific hope from the upcoming DPDI bill to enable more digital identity practicality and reduction of growing fraud in the UK?

A: We expect the DPDI bill to pave the way for new 'open data' initiatives extending beyond open banking. These schemes will necessitate a digital identity to accurately link data with individuals, thereby expanding the adoption and applications of digital ID. OneID® is poised to leverage digital ID to combat fraud and collaborate with the financial sector and regulators like Ofcom. Together, we aim to facilitate broader usage to thwart online scams orchestrated by fraudsters.

Q: What are your thoughts on GPG45, and how might that influence how the private sector verifies identities?

A: GPG45 is a new standard for the UK private sector, but there are solutions in place (and are mandated) for use cases such as Disclosure and Barring Service (DBS), Right to Rent (RtR), and Right to Work (RtW). The private sector is already using these solutions. OneID® sees standardisation as a good thing to aid interoperability, security, and the simplification of ID.

Q: Can OneID® use a photo ID if we need live verification for someone in a retail environment?

 A: In a retail setting, we can collaborate closely with customers to tailor the most suitable solution that ensures the optimal customer experience. For businesses that need a Photo ID scanning solution, OneID® offers an ID document scanning solution that can read any ID documents issued worldwide. This solution can be an alternative to or in conjunction with bank-verified identity verification.

Q: Which countries are covered by this verification tool? Can I perform anti-money laundering (AML) regulations checks here in the UK to comply with UK regulations, even for international clients?

A: OneID® covers 90% of UK adults (50 million people) with bank-verified information and can verify individuals globally with its document ID scanning process. Some other countries may already have digital ID solutions that can be connected with OneID®, e.g, our partner ID Partner covers the US.

Q: How are the results of the document-free ID verification presented to client users? What is contained within the results?

A: To users/individuals, OneID® shows the data retrieved from the ID check, which they consented to.

OneID® clients get the name, address and contact details along with the Date of Birth and bank account details if required.

Q: How is the document-free digital identity verification audited?

OneID® undergoes compliance audits conducted by Age Check Certification Services (ACCS), a UKAS-accredited conformity assessment body. ACCS is appointed under the UK Government’s Department for Science, Innovation and Technology (DSIT) compliance programme for UK digital ID, ensuring that OneID® adheres to the ID framework and standards.

And that’s a wrap

I hope you have enjoyed the KYC content brought to you by OneID® as much as we enjoyed putting it together. If you have any questions, don’t hesitate to reach out to my colleague john-michael@oneid.uk , who will be happy to help.

If you missed out on the webinar or would like a recap – watch it here.

Want to know more about how OneID® can help you with your KYC and Customer Due Diligence processes? Read here.