By Ruth Doris
Under European regulations, all financial services businesses — including banks, credit unions, and insurance brokers — are legally required to verify the identity of new customers.
The process, termed Know Your Customer (KYC), is designed to prevent fraud and is part of anti-money laundering (AML) regulations.
It can take 24 hours or longer, and stockbroker, Colum Lyons, found that his customers were getting frustrated with the bureaucracy.
In digitalising the customer on-boarding experience, he founded ID-Pal with James O’Toole, a former Accenture management consultant, and with tax advisor, Patrick McClafferty. The goal has been to design and build a solution for identity verification that’s easy to implement and simpler to use.
He said that ID-Pal reduces the cost, risk, and frustration of customer on-boarding, with “a seamless user experience into an end-to-end solution that can be configured, branded, and integrated into a business’s processes with minimal or no technical effort required.”
The solution includes a mobile app to enable the customer to capture their information and send it securely to the business.
“All the customer needs to do is take a picture of their passport and driving licence, as well as a recent utility bill and then blink into a camera, when prompted.
“We use motion-detection and facial-gesture recognition to ensure that they are a real, live person and then compare their facial features with the photo ID to ensure that that person is the rightful owner of the documentation. Similarly, we use machine learning to ensure the identity documents haven’t been tampered or forged with in any way.”
Consumers are very aware of data protection, and Mr O’Toole said security is a big part of ID-Pal’s value proposition.
He said ID-Pal’s solution “meets and exceeds industry standards, from both a cybersecurity and a data-protection perspective, because trust lies at the heart of everything we do.”
The average account-opening process can take 20-40 minutes in-branch, and up to 24 hours for remote customer on-boarding.
ID-Pal can bring that down to less than two minutes for the entire end-to-end process, according to Mr O’Toole.
Mr O’Toole said ID-Pal’s true value proposition is not just saving time, it’s helping businesses to reduce the drop-out rate at the customer sign-up.
He said that, on average, 50% — and up to 80% — of customers attempting to open an account online drop out of the process, due to a frustrating experience.
With other service providers within the KYC and AML space, there’s a lot of time and costs associated with development, testing, and integration.
Using ID-Pal’s “flexible architecture”, a business can configure and implement a seamless solution for customer on-boarding, either in person, remotely, or via their broker network, in a matter of minutes or days, rather than months or years, Mr O’Toole said.
“We remove the cost, risk, and timelines usually associated with digital transformation projects and, in doing so, make industry-leading technologies accessible to the masses.”
Having conducted pilots last year, ID-Pal is now fully commercial and is working with pillar banks in Ireland and the UK.
The company is currently working with JobsOhio to secure grant support for setting up a US base in Columbus, Ohio.
Fresh from its win in the Fintech category at the Enterprise Ireland and Bank of Ireland-sponsored National Startup Awards, ID-Pal is in the middle of a funding round, looking to raise capital from a combination of angel and institutional investors to focus on expansion within the US and internationally.
While the initial focus is on financial service businesses, because of the mandatory regulations in the industry, ID-Pal is looking to explore other industries that need identity verification, including real estate, healthcare, and third-level education.