Strong ID verification processes are being imposed on Mobile Network Operators (MNOs) to address fraud at the point of subscription: as MNOs offer more and more value-added services, the cost of fraud becomes more and more significant.
Other drivers come from regulations. For instance, a growing number of governments are introducing mandatory registration for prepaid subscriptions, to tackle national security issues and criminal behavior, following the recommendations of the GSMA.
In addition, financial services are playing an increasingly important role in MNOs’ portfolios, and they need to meet what is called Know Your Customer procedures (KYC). These KYC procedures raise the stakes for financial institutions, with legal entities placing more pressure on organizations to comply.
These MNOs face a challenge to deploy robust security mechanisms which abide by legislation but don’t jeopardize the customer experience. This is crucial for customer acceptance.
Strong ID verification is in everybody’s interest
Firstly, it reduces the financial burden of fraud. Secondly, it allows
MNOs to comply with SIM registration regulations for prepaid and financial regulations such as anti-money laundering (AML) and countering the financing of terrorism (CFT), which demands strict ID verification systems and measures to ensure “customer due diligence”. To prevent identity fraud, MNOs need to be aware of the constantly evolving nature of fraud. When an MNO implements robust and systematic ID verification, fraudsters are likely to target its competitors which do not have such solutions in place, so it’s in everybody’s interest to invest in secure ID verification processes.
Strong ID verification leads to business opportunities
Rather than simply being something they must implement; strong ID verification represents a great monetization opportunity for MNOs. Rigorous ID verification processes, both in-store and online, allow operators to assume the role of Identity Verification Service providers for industries and governments that need to provide access to digital services in a mobile world. Examples include:
- Working with enterprises, helping them to implement secure digital consumer acquisition processes
- Supporting banks in their digital transformation, allowing mobile financial services such as fund transfers and loans
- Supporting mobile welfare payments for mobile government-related initiatives
Also, strong ID verification coupled with their detailed knowledge of their consumer segmentation means that MNOs can also monetize their assets to industries so they can offer relevant services to their customers.
We’ve previously written about the role MNOs can play in EIDAS regulations.
It is clear operators can capitalize on key assets to provide digital authentication to other service providers. However, this can only happen through strong ID verification processes, which enable robust digital authentication and ultimately digital identity. In essence, this enhances ID verification, allowing MNOs to enable digital ID for authentication purposes.
In any case, automated & strong ID verification processes must be easy to use, and integrate easily into existing customer acquisition infrastructures and processes. These principles apply whether it’s for MNOs themselves, if they offer it as a service, or just a case of self-enrollment by consumers.
To discover more about our multi-channel approach to ID verification, you can read our dedicated webpage here, or watch our video below.
Source: Gemalto – Payments
Strong ID verification and the MNO opportunity