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/Fintechs and KYC, keys to identity verification in the banking sector in Mexico

Veridas - Onboarding digital lider en México
Antonio Torres

Antonio Torres

LATAM Marketing Manager

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For a financial institution to succeed in its digital strategy, it is critical and necessary to have a secure, accessible and inclusive identity verification system that allows them to obtain a high degree of certainty in all interactions and transactions executed by their customers in order to achieve a higher and better number of users.

Identity verification in the Mexican fintech sector

The financial sector has been and continues to be one of the most innovative sectors in the adoption of new technologies. This is what the leading financial institutions in Mexico, Colombia, Argentina and Peru have understood over the last five years.

Thanks to biometric technology, many companies in this sector have already made life easier for their customers and improved their business objectives. As an example, BBVA runs millions of onboarding processes with Veridas in Mexico and Spain, which has allowed them to get new clients thanks to remote unassisted client registration, through a simple selfie and in less than 1 minute.

And it has also enabled hundreds of thousands of Mexican pensioners to provide proof of life needed to collect their pension with just three seconds of voice during a phone call in which the bank authenticates the real identity of each customer; in any language, including the country’s dialects, and from any telephone device.

Remote access to financial services is more in demand than ever, but there exist many risks. Meeting regulatory compliance without affecting the user experience is one of the great benefits of Veridas biometric technology, which is NIST (National Institute of Standards and Technology), ISO 30107 iBeta Level 2 PAD compliant. Veridas has positioned itself as a technological company of reference for strict regulatory compliance in our markets.

A good example is that the National Electoral Institute of Mexico installed Veridas’ facial biometrics engine, standing as the first biometric company to work with the Mexican institution. The INE is the organization in charge of issuing the credential used by Mexican citizens to prove their identity in electoral processes or to open bank accounts.

Compliance with the Federal Law for the Protection of Personal Data in Possession of Individuals (LFPDPPP) and its Regulations

The framework for protecting personal data in Mexico comprises several rules of different ranks. The Federal Law for the Protection of Personal Data in Possession of Private Parties (LFPDPPP) and its Regulations stand out. Veridas complies with all the Mexican regulation requirements regarding the rights of data subjects and the obligations of data controllers and data processors.

In addition to the above, Veridas’ digital identity verification solutions, with all of its certified products, also enable financial institutions to comply with regulatory requirements, such as those related to the money laundering prevention required by the Mexican National Banking and Securities Commission (CNBV).

Finally, Veridas technology is also endorsed by the U.S. National Institute of Standards and Technology (NIST) – the most relevant independent institution in the standardization of biometric technologies. (NIST) – the most relevant independent institution in the standardization of biometric technologies – provides iBeta with ISO 30107-3, which confirms our commitment to fraud prevention, and complies with European (General Data Protection Regulation) and American (CCPA) standards for both data protection and regulatory compliance.

What are the main advantages of biometrics for the financial sector?

1. Easier to do, more customers engaged

Why not identify ourselves in the digital world as we do in the physical world? Why not replace login systems based on users and passwords with real identities and real people?

Thanks to Veridas biometric technology, a secure and voluntary identity verification process can be completed in less than 1 minute and from anywhere. A verification process for which only a mobile device or computer is needed, and where it is sufficient to show a valid identity document (ID card, passport or driver’s license) and record a short video. Within moments, Artificial Intelligence engines hosted in the cloud verify the person’s identity with 99% accuracy after verifying the document’s validity and verifying that the person carrying it is the same person who appears on the document. Once a customer completes an onboarding process, he or she can complete a myriad of procedures with a simple selfie, without SMS codes or passwords.

This not only improves the security of the users when completing procedures but also their convenience; biometrics allows us to just be us and forget about everything else.

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2. More security, less identity fraud

Phishing attempts or other identity fraud crimes are becoming more and more frequent online. And for companies that operate online, such as FinTech companies or Neobanks, the security of these online transactions is crucial.

Identity verification systems are critical to avoid this type of fraud and transmit confidence to both entities and users. The main reason is that double authentication systems, such as passwords or SMS codes, are linked to the device and not to the person so that when the device is stolen or hacked, all the person’s personal information is exposed. However, biometrics systems verify a person’s identity based on their personal, non-transferable attributes. Biometrics are fraud-resistant, as they always require verification when performing a transaction.

A safer and more inclusive fintech sector

Today’s society is increasingly demanding digital and personalized services. The financial sector must bet on a strategy based on digital identity verification with biometrics, not only to protect against fraud but also to improve the experience of its users.

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Leading Mexican banks use Veridas technology

4 of the 10 leading banks in Mexico already use Veridas biometric technology to verify the identity of their customers, making Veridas the leading onboarding provider in Mexico. 

Specifically, BBVA México, the largest financial institution in the country, insists on the following reasons for having chosen Veridas technology:

  • It complies with Mexico’s regulatory framework: Veridas’ biometric engine is the only one integrated with INE. In addition, its video-identification process complies with CNBV regulations on money laundering, which allows opening an N4 account with Veridas’ digital onboarding processes. Finally, its proof of life is ISO 30107 compliant; compliance verified by iBeta (Level 2)
  • Provides an unparalleled customer experience: the newly generated process is simple and easy for any user, with funnel conversion rates above 80%.
  • Demonstrates a very high degree of accuracy: the solution meets the quality requirements of a demanding industry as the financial sector, as evidenced by the fact that it has been ranked by NIST (National Institute of Standards and Technology) as one of the best solutions on the market year after year.

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