For many years, out-of-wallet questions were the standard for digital account opening. It was an important innovation that allowed fully automated digital account opening. Limitations and problems quickly emerged, too many people fail who should not and too many people pass who should not. Despite these problems and others, out-of-wallet questions are still commonly used today.
In 2015 Access Softek was the first (to my knowledge) to release a biometric replacement for out-of-wallet questions in digital account opening. The applicant takes a selfie (with a liveness test) and a picture of their drivers license. We compare the two images. Our clients report this approach effectively eliminates fraudulent digital account opening.
What’s interesting to me is that here we are ten years later and not everyone has switched to biometrics.
Bigger fish to fry? Inertia? Stick to what you know? Out-of-wallet is good enough? Didn’t know about a better approach? Stuck in a long term contract? Fraud losses are at an acceptable rate? Whatever the reason, credit unions still doing out-of-wallet verification need to evaluate their organizational desire and ability to innovate.
For long term viability credit unions need to, at least, do an annual self assessment of how well they innovate and what organizational roadblocks are preventing more rapid innovation. Pick thirty important digital innovations in the last 3 years and check off how many have been implemented. Then take a deep dive into why not more.
Author: Chris Doner, Founder & CEO, Access Softek