When you download and sign up to a new app, especially a financial app, you may be asked to provide identity information.
Whilst this might seem like a personal request, online businesses who you trust with your money have similar legal requirements as banks and traditional financial institutions — they have to know their customer.
This is because the internet has made the way we trust and verify data incredibly difficult — and as a result cybercrime, the theft of funds or data online, has become a growing threat.
Researchers in the U.S. found that up to $600 billion was stolen by cybercriminals in 2018 alone — that’s more than the entire GDP of Sweden — and unfortunately, this number is growing year-on-year.
Often, cybercriminals will use stolen identity documents, such as passport copies and household bills, to pose as honest users. Spoofed documents, deepfake technology, and cleverly executed electronic fraud have created multiple opportunities for criminals to hide their true identities.
This can make identifying cybercriminals and fraudsters, who use their carefully created fake identities to launder money or fund illegal schemes, incredibly hard to detect.
That’s why ‘Know Your Customer’ requirements, more commonly known as ‘KYC’, are essential for financial providers to identify who they’re transacting with.
By proving that customers are who they claim to be through KYC, banks, exchanges, and other financial providers can say with certainty that they’re not indirectly contributing to money laundering or fraud, which makes it necessary to collect certain information about new customers.
However, for platforms which regularly onboard thousands of new users per week, KYC is a huge undertaking.
With many KYC solutions, companies have to manually verify identity documents one by one, which costs an enormous amount of time and money. This means that you, the customer, may have to wait for days for your account to be approved.
To stay one step ahead of these bad actors, the financial world has a secret weapon — known as Regulatory Technology, or ‘RegTech’.
In an effort to beat cybercriminals, RegTech uses new powerful technology such as artificial intelligence (AI) and biometrics, to identify and stop known criminals from accessing financial services.
At Mode, we use RegTech to shorten the KYC process — a major source of frustration for new users. We’ve made it one of the easiest and frictionless KYC journeys in the entire crypto space.
So, how does Mode do this? Easy — with a little help from our friends. On Tuesday last week, we announced our partnership with Onfido, an award-winning San Francisco-based identity verification provider, with almost a decade of RegTech industry experience.
Onfido’s identity verification technology is one of the most trusted in the world, and it’s also one of the most advanced. Mode and Onfido process KYC data through two crucial steps:
- Users simply take a photo of their government-issued ID, for example, a passport or driving licence, which is then analysed by Onfido for their authenticity.
- Users are then required to take a selfie. Onfido uses biometric data and a combination of AI and machine learning to ensure that the selfie which the user provides matches the picture in the ID — to ensure the person applying is who they say they are.
- Once users have been approved for steps one and two, Onfido works with leading data providers to automatically verify each applicant’s name, home address and date of birth by cross-referencing their details against voter registries, utility providers, and other trusted sources. This step ensures that the ID provided matches with a real person with a physical address.
In this complex but quick process, Onfido confirms your identity with high accuracy in minutes — all while stopping the criminals who are trying to use someone else’s ID.
This process is successful immediately for 80% of users, who can become verified without needing to upload further proof of address — the biggest pain-point for current KYC solutions.
Where this three-step process can’t automatically verify user’s details, Mode requests users upload proof of address, such as a utility bill or bank statement, to prove their identity.
Mode is proud to work with Onfido and other data partners to provide cutting-edge KYC verification, saving you time, and most importantly, protecting your identity whilst staying legally compliant. Mode and Onfido use the highest levels of security when processing user data, so your personal data is protected and secure.
Through our new Onfido partnership, we’re expanding our network of leading technology providers, who share Mode’s vision for a secure and transparent financial ecosystem.
We hope that the unique user experience Mode is offering will transform the way that users think about KYC, and set the gold standard for identity verification as we build the new digital asset economy.