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App installs are blindingly expensive

Management summary
Users are easily lost during onboarding if they are required to invest a lot of effort into an untested value proposition. Small steps that align effort and perceived value are state of the art.
Native app users are the most valuable customers but they are also the most expensive in terms of acquisition cost. A sound customer acquisition strategy focuses on value and cost and optimizes for life time profitability.

Cost of app installs

Native app users have the best metrics in terms of customer engagement and retention. But assuming that you get the lowest acquisition cost from forcing customers into your native app very early in their life cycle is the wrong conclusion.
Your customers typically engage with you for the first time somewhere on the web. They see an advertisement or a google search leads them to your offering. From here, it is your task to convert as many visitors to paying customers as possible. The way to track this is your cost per acquired customer or simply your spending on advertising per new customer. You will learn that a new customers costs you anywhere from CHF 500 to CHF 2000 in paid advertising. With a strong brand you will pay less because you get people to look for you, which is “free” (i.e. you don’t have to pay google to be found).
Next, you look at each step it takes a user to become your customer. Where you lose a lot of leads, you optimize.
If you do this thoroughly, you will find out that the app stores are a black hole. You send well qualified traffic to the app download and there you lose 90% of your traffic because consumers shy away from the cognitive load of downloading and installing and then finding the app on their device. There are just too many distractions available during all the steps they have to take.
The cost for traffic and the mediocre conversion work together to make it “blindingly expensive to drive native app installs.”
fidentity is here to help you with the problem of losing customers during app install. With fidentity you can perform mandatory compliance steps right in the web browser, which creates a much leaner conversion funnel for the user with no distractions. Our customers have told us that conversion has doubled with a switch to our web based KYC service. Think about the math for a moment: You can literally cut your acquisition cost in half.
And what good is it, if I have less committed leads and lose them later, after KYC? Very simple: If your onboarding journey is a journey of small steps instead of steep cliffs, you will lose fewer customers and thus your overall funnel will be more efficient. Your customer acquisition cost will go down.

about fidentity

fidentity provides software for compliant digital customer identification according to finma rules. The user just takes a selfie and scans their ID document. This can take place on any cell phone in the standard browser without app. Using artificial intelligence (AI), fidentity checks the authenticity of the documents and extracts all data. The identification is completed in real time and all relevant documentation is provided to the financial intermediary in real time. fidentity is audited according to the ISAE300 standard.
 
fidentity – simple, secure, flexible

Revision of finma circular 2016/7 with little practical relevance

Managment summary

finma now permits a way to perform digital identification without video or bank transfer. The chosen technology (reading an NFC chip) is technically sound but of limited practical relevance since it is limited to passports.

Background

finma just released a draft update of the current circular on online and video identification. In the circular, finma lays out the procedures that have to be followed to identify a natural person in compliance with the Swiss anti money laundering act. The current draft amends the aspect of the circular concerned with online identification, i.e. the identification process without a video interview. In the current circular, online identification must be combined with a bank transfer. Only then, is an online identification sufficient to open a new bank account (i.e. the person is considered to be fully identified). According to the draft, it is now possible to replace the bank transfer with the scan of an RFID chip of a compliant government issued document. 

Analysis

From a technical standpoint this is a very sound approach, since RFID chips on most current passports (not all) are as secure as the chip on a payment card. It is possible to verify that the chip was issued by a government and that the information on it has not been changed. This verification is cryptographically sound, i.e. there is no reasonable way to fake the chip or the data on it. On the downside, there are several practical hurdles to using this technology for onboarding purposes:

  1. Swiss ID cards don’t have a chip. Passports do, but in our experience, they are used in around 1% of the onboarding cases.
  2. To read the data from the chip, reading the machine readable zone (MRZ) of the document beforehand is necessary because the password to access the chip is encoded in the MRZ. So there is always an additional step for the user.
  3. National ID cards of other countries are less standardized than travel passports. For example, German ID cards (the „Perso“), which are as widely used as the Swiss ID cards, require an additional key to access the data which is in the visual zone of the document.
  4. Reading the chip data is only possible with a native app on the device, requiring the user to install an app.
  5. As of today, signature law has not been updated and therefore qualified signatures (required for consumer credit cases) are still not possible.

Almost as an aside, the notes which accompany the draft contain another important clarification: Declarations of beneficial ownership do not require a hand written signature. In digital terms this means that there is no requirement for a qualified signature (which in turn would have required video ident or personal presence per current law). This is relevant in so far, as it opens up many transactions to video-free identification procedures, especially in the b2b domain, where beneficial ownership is often a crucial point to be established. 

Outlook

In summary, the update is of limited immediate relevance for identification and onboarding scenarios in the financial services industry. However, looking into the future, there is considerable potential in this approach:

  1. Mid- to long-term, the Swiss ID card will get an NFC chip (not yet in 2021 but probably some time before 2025) and with 10% yearly renewal rate, every Swiss citizen should have an NFC-capable document in their wallet by 2035.
  2. With a change in the digital signature legislation, allowing qualified signatures in combination NFC would make video obsolete and could make digital signatures much more usable.
  3. Moving from probabilistic to (almost) deterministic security features is a paradigm shift with substantial long term impact on the digital identification landscape.

 Links: finma information on the draft

about fidentity

fidentity provides software for compliant digital customer identification according to finma rules. The user just takes a selfie and scans their ID document. This can take place on any cell phone in the standard browser without app. Using artificial intelligence (AI), fidentity checks the authenticity of the documents and extracts all data. The identification is completed in real time and all relevant documentation is provided to the financial intermediary in real time.
fidentity is audited according to the ISAE300 standard.

fidentity – Compliant Onboarding – Fast and Convenient

 

No installation needed

Integrate fidentity seamlessly into your existing business process

fidentity offers an interface to retrieve customer data instantly – as JSON file or prepared in a PDF. Furthermore the scan is analyzed by our artificial intelligence engine and the resulting metrics are immediately available

Get in touch to learn more or try fidentity yourself

Give feedback to your customer

Do not let the customer lose time unnecessarily with your service – otherwise you will lose the customer

The usability of the fidentity service is constantly being improved by UX experts. Nevertheless, it sometimes happens that the customer does not use the service according to the rules.

fidentity notifies the customer immediately in case of obvious errors and thus protects the customer from unnecessary loss of time.

Get in touch to learn more or try fidentity yourself

Quality is the best business plan

Scanning documents with fidentity is fast and easy – and always guarantees high quality scans

Whether you need the scanned ID-document for your files or because of legal requirements – the document must be legible and free of artifacts, without manual inspection of the scan.

fidentity carries out automatic quality checks with every scan and combined with our artificial intelligence engine the images will always meet your requirements.

Get in touch to learn more or try fidentity yourself

Time is Money

fidentity enables the fastest onboarding for new clients.

If you make your clients wait, they go somewhere else. And more of your money goes into advertising, driving your cost per acquisition up. Don’t bore your prospects with app downloads or waiting times for slow image uploads with unknown result.

We made the user experience as simple as we possibly could. Super fast AI checks the image quality live in the browser. 95% of the images are first time right and the user gets real time intuitive feedback if something is not OK.

The result: Creating a high quality scan takes only seconds.

Onboarding with fidentity is super convenient. So your prospects become your customers faster.  

Get in touch to learn more or try fidentity yourself.

GWG Revision 2021: Verschärfte Customer Due Diligence

Ende 2016 veröffentlichte die Financial Action Task Force FATF den vierten Länderbericht zur Schweiz und befand, dass die Schweiz insgesamt effektive Massnahmen zur Verhinderung von Geldwäscherei hat. Allerdings gab es auch einige Tolggen im Reinheft und entsprechende Vorschläge zur Verbesserung.

In einem Follow-Up Prozess zwischen FATF und Schweiz wurden diese Vorschläge nun in Gesetzesform gegossen und werden voraussichtlich im Laufe von 2021 als GWG Revision in Kraft treten.

Der dem Parlament zur Beratung vorgelegte Entwurf enthält diverse signifikante Änderungen am Schweizer Geldwäscherei  Dispositiv.

Änderungen

  1. Verschärfung der Customer Due Diligence (CDD)
    • Verifizierung der Angaben zu den wirtschaftlich berechtigten Personen
    • Pflicht zur periodischen Überprüfung der Kundendaten und deren laufenden Aktualisierung
  2. Ausweitung der unterstellten Personen und Geschäfte
    • BeraterInnen sind neu unterstellt
    • Die Wertgrenzen für die Einhaltung von Sorgfaltspflichten im Edelmetall werden gesenkt
    • Vereine mit Geldwäscherei Risiko müssen ins HR eingetragen werden
  3. Anpassungen im Meldewesen
    • Längere Bearbeitungsfrist von 40 Tagen bei MROS. Nach Ablauf der Frist darf die Geschäftsbeziehung abgebrochen werden
    • Ausländische Muttergesellschaften dürfen über Verdachtsmeldungen informiert werden

Die Änderungen unter 2. sind für etablierte Finanzintermediäre eher wenig relevant. Die Änderungen unter 3. betreffen nur diejenigen Mitarbeiter, die mit Verdachtsfällen der Geldwäscherei befasst sind.

Verifizierung WB

Die Änderungen unter 1. mit Bezug zur Customer Due Diligence (CDD) sind hingegen recht einschneidend, da sie unmittelbar einen grossen Teil des operativen Geschäfts und praktisch den gesamten Kundenstamm betreffen.

Der Wortlaut des Entwurfs bezüglich Verifizierung der Angaben zu den wirtschaftlich berechtigten Personen lautet: «Der Finanzintermediär muss mit der nach den Umständen gebotenen Sorgfalt die wirtschaftlich berechtigte Person feststellen und deren Identität überprüfen [..]»

Auch wenn dies heute bereits vielfach so gemacht wird, erhöhen sich die Anforderungen an die Nachweisbarkeit und Qualität der Identifikation. Der Druck, den CDD Prozess bei Firmenkunden zu automatisieren wird mit dieser Vorgabe zunehmen.

Aktualisierung

Der Wortlaut bezüglich der Pflicht zur periodischen Überprüfung lautet: «[Der Finanzintermediär] überprüft die erforderlichen Belege periodisch auf ihre Aktualität und aktualisiert sie bei Bedarf.»

Dies betrifft speziell die bei der Aufnahme der der Geschäftsbeziehung erhobenen Kundendaten. Die Überprüfung dieser Kundendaten muss neu auch ohne begründete Zweifel periodisch erfolgen.

Dies bedeutet, dass der komplette Kundenstamm regelmässig neu identifiziert werden muss, um die Daten mit den Bestandsdaten abzugleichen. Eine Vorgabe, die ohne einen vollständig digitalisierten Prozess mit hohem Aufwand verbunden ist.

Über fidentity

fidentity bietet Software zur komplett digitalisierten Durchführung der finma konformen Online Identifikation. Der Anwender erfasst ein Selfie und scannt seinen Ausweis im Browser auf seinem Handy. Mit Hilfe von künstlicher Intelligenz (KI) führt fidentity sämtliche Prüfungen durch, extrahiert relevante Daten und stellt diese dem Finanzintermediär ich Echtzeit zur Verfügung.
fidentity ist nach ISAE300 auditiert.

fidentity – Compliant Onboarding – Fast and Convenient