Author: Ingolf Rauh

KYC made easy: 6 ways of identification to match all user preferences

The know-your-customer (KYC) process is an immense hurdle in every customer journey in regulated digital business sectors. Lavish identification methods and long turnaround times cause users to drop off and negatively impact the conversion rate. Offer users their preferred identification method to ensure a seamless experience and boost conversions.

 

With the upcoming eIDAS 2.0 regulations, the security and interoperability requirements across Europe's identification services will increase even more, making it essential for organizations to stay informed and compliant.

Here, we explore six key digital identification methods, all within the framework of eIDAS 2.0.

1. eID Wallet

Digital wallets are widely used and generally accepted in the payment sector. As part of the amendment to the eIDAS Regulation, the EU is now extending this concept to identity document data stored in a state-issued wallet. This service is to be accessible to all EU citizens free of charge, and the aim is for the technology to be widely used by 2026. One of the wallet's advantages is that data based on other documents can be stored there in digital form in addition to the identity, such as driving licenses or certificates. The wallets of various EU countries are to be accepted throughout the entire European Union, which offers significant advantages over today's national eID solutions and reduces friction in international business.

2. Bank identification

Bank identification uses existing bank account information for secure and fast user authentication in online banking. In Germany, an additional reference transfer is used to confirm the user's identity, building on the fact that they were initially identified when opening the respective bank account. This method complies with German AML law and eIDAS 2.0 by meeting strict privacy and security standards, seamlessly integrating into the financial ecosystem across Europe, and ensuring high trustworthiness. Also, in other countries, eIDAS 2.0 identification or signature can be used as an AML-conforming identification means. In Switzerland, a qualified electronic signature must be placed on a copy of an official ID document.

3. Face-to-face identification

Face-to-face identification is possible in certain shops or offices in many countries (e.g., German post offices and Swisscom Shops in Switzerland). Individuals present their valid ID documents for verification to a trained agent. This traditional method meets the eIDAS 2.0 requirements for trusted document authentication and provides a secure option for those who prefer physical verification. On the other hand, this method is restricted to opening hours and might not be practical for rural areas.

4. Video identification

Traditional video Identification transfers face-to-face interaction into the digital sphere. Usually, new customers present an ID document to a call center agent during onboarding. Video agents examine the document through the camera and may ask security questions to ensure the video is not a pre-recording or a deep fake. While this method is not dependent on a specific location and customers can perform it from home, there are still restrictions regarding the operation hours of the call center and the cost of human labor involved in the process.

5. Auto-Ident

Various identity-proofing solution providers have developed an automated alternative to video identification that works with human video agents working only in the background, reducing high costs for online process support and offering flexible identification hours. Users take a video of their ID document and of themselves using their smartphone camera.   An artificial intelligence pre-verifies the person's identity and checks the presented identification document in the background. Therefore, the time for the identification procedure is not restricted by opening or working hours. Human agents work in the background to review all pre-analyzed results and verify the information.

6. NFC Ident

Auto-Ident can be operatorless in case the passport or ID-Card has an ICAO 9303 compliant NFC chip, which can be read out and eliminates the need to read out the information from the printed pages of the ID document. By this, the complete auto-ident process is not restricted by opening or working hours, and staff costs can be reduced to a minimum.

7. Electronic ID schemes

Even before the eID wallet was issued, many European countries offered electronic identification schemes, which are systems for electronic identification under which electronic identification means are issued to natural or legal persons. Public organizations, private companies, and public-private joint ventures have developed schemes.

Electronic ID schemes are based on chip-based means, where a secure chip is integrated within the mobile operator's SIM card or ID document, or app-based means, where a mobile application simulates the functionality of a smart card.

The Level of Assurance (LoA) provides the required confidence in a person and the appropriate fulfillment of the requirements for enrolment, credential management, authentication, a scheme based on authenticity, and organization.

In eIDAS 1.0, the LoA "substantial" was sufficient, e.g., for qualified electronic signatures. However, eIDAS 2.0 defines the level "high" now as the standard, which is offered by many schemes.

Different countries, sectors, and individuals have different needs regarding digital identification. When scaling up digital business models internationally, it's crucial to have a partner like Swisscom Trust Services that offers a comprehensive range of identification methods and operates across Europe.

By ensuring compliance with eIDAS 2.0 and using innovative solutions, Swisscom Trust Services is well-positioned to support your organization's digital identification needs. Contact us for more information and a personalized consultation to help you navigate the complexities of digital identity in a pan-European context.