Commissioned by Oxyliom Solutions
1 Introduction
Customer expectations are driving change in the financial sector. Users are developing a lower tolerance for time delays, and require mobile-first interfaces as a baseline capability from their service providers. These new thresholds for connectivity disrupt the consumer commitment to familiar banking processes; switching costs between traditional and fintech solutions are decreasing as non-traditional financial services increase their legitimacy and value offering. New financial actors in the market have changed the definition of financial services, and legacy institutions are redefining themselves as well.
These fundamental changes put pressure on all players in the market – both traditional and fintech solutions – to deliver a full digital experience to their customers. This requires adequate technology for supporting such shift, from onboarding of the customer to recurring authentication and secure interactions and transactions with the customer. The challenge is extending the current experience in a manner that works smoothly with existing legacy banking applications, but also supports the new digital services. Customers expect a consistent experience across all types of services.
In that competition, digital identities become the key to success. Businesses need the customer relationships. With direct relationships with the customers, businesses remain in control of the business. Such relationships in a digital world are tightly bound to maintaining digital identities. Managing digital, electronic identities, from on-boarding to recurring authentication, interactions, and transactions must be solved comprehensively to keep the business relationships with the customers and to succeed in business.
Both regulatory requirements and cyber-risks are much more challenging in the financial sector than in other industries. Thus, businesses need to find a good balance between security and compliance on one hand and customer experience on the other. Fortunately, today’s technologies help in many areas. A comprehensive solution for supporting the digital customer experience in financial services and the customer journey from a consumer to recurring business requires support for three distinct yet tightly related areas:
- Electronic Identity Management, for enabling access to services with electronic/digital identities, delivering flexibility for the customer while meeting the regulatory requirements.
- Customer Onboarding and KYC/AML compliance, supporting efficient and smooth onboarding processes while meeting the ever-increasing regulatory requirements around KYC and AML.
- Electronic Trust Services, which support businesses in secure interactions and transactions, from document signing to transaction security, relying on the digital identities of the customers and associated secrets whenever required.
These services are closely related. Onboarding establishes the digital identity that is used from there on, or which allows adding further identities and authenticators on behalf of the user. It also provides the foundation for using such identities in subsequent processes, and it links the identities with further proof such as mobile phone numbers that are used in verification processes.
We strongly recommend financial services companies – and other businesses in heavily regulated industries – to step back from purchasing point solutions and first evaluate whether and how to use a central or core platform for the digital identity services and related capabilities. That platform then can be extended by capabilities in some areas, when required – but it is a central approach, not a set of disparate tools, if done correctly.
Oxyliom Solutions, a company headquartered in Morocco with offices in Luxembourg and Dubai, is one of the few providers in the market offering a comprehensive platform for the electronic/digital identity services required for a modern, secure, and regulatory compliant digital customer experience.
