By Guido Ronchetti, CTO – XTN Cognitive Security

Banking is drastically changing:
• Tech corporations are starting offering financial services
• Fin-tech startups are reimagining the business
• Regulations, such as PSD2, are forcing the market to open their services
Challenger Banks are domaining the scene more than ever, but they have to face some crucial challenges. For them, a very sensitive theme to address is the Onboarding process.

What is Onboarding?

Onboarding is about integrating a new customer into service. In banking, this means to verify a customer’s identity according to compliances and activating its account in the service.

Traditional Banks Onboarding: in this case, the customer goes to the bank’s office, bringing with him the whole set of documents.

Challenger Banks Onboarding: here, onboarding is an app-based procedure. There is no direct contact, just the device camera for taking photos of the documents and a self-compiled form. Next-Gen Banks are making things easier for the customer, but they’re also facing a challenging way of dealing with customer identity validation.

What about this challenge?

If we start from the identity verification flow, we can observe how the user ID is successfully verified through some manual or automatic check on identity. But then it comes out the fraud.
The Challenger Bank often tries to attract new users by giving them some reward (monetary or material). Most of the Onboarding frauds we see today focus on creating fake customers to enter these rewarding campaigns. The aim of the fraudster is trying to create multiple accounts to obtain numerous recompenses.

How to spot these fake users?

Applying Behavioral Analysis to new customers could help detect fake ones, prevent them from receiving the reward, and protect the bank’s budget for new customer acquisition.

Our Mission

At XTN, we strongly believe in supporting Challenger Banks, and their evolution needs through our consolidated fraud prevention tools. For this reason, the XTN Cognitive Security Platform is ready to help the most innovative FinTech as much as traditional banks to secure their services.

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