How Can AI Help with Opening Accounts and Account Verification?

A few years ago, when someone wanted to open a new account at their bank, it was necessary to go to their nearest branch with a couple of forms of identification, which they presented to a teller who was authorized to open the account. But just like consumers want to be able to transfer money or pay bills quickly and from their mobile devices, while desiring a personalized customer-centric experience, says Aite Group1— they want to be able to open new accounts and have them verified just as quickly. Tiffani Montez, senior analyst with Aite Group, said artificial intelligence is the technology that can help financial institutions change how they interact with customers during the digital onboarding and account creation process.

"Financial institutions have a vast amount of data about their consumers, and they can deliver real-time financial information through a mobile device already," said Montez.

Fintech APIs are able to connect this data to other systems — their own or trusted third-party sources — as a way to obtain customer information. This helps them verify the consumer's identity and financial information quickly and easily, streamlining the entire operation. You can use this same data to allow customers to connect new service providers to their bank accounts, such as their cable or phone provider or even their mortgage lender or apartment management company.

AI is Changing Many Industries

It's very rare when technology has as broad of an impact as AI. Usually, when a technology like this is introduced, it's only considered in silos. That is, people ask, "what benefit does this technology have in my area of business or channel?" It's not until later that the technology's ability to solve a wide range of business challenges is realized or even considered.

"AI is one technology that has broad benefits to the customer and to the overall organization, and it's being used in many different industries, fields, and even individual departments," said Montez.

According to the Aite Group report, the biggest pain point for financial institutions is first-party fraud.. As identity crimes continue to grow, it's increasingly more difficult for financial institutions to determine who they're dealing with in all their different delivery channels. Unfortunately, the ease of creating accounts for consumers has also made it easy for criminals to create their own accounts for their own purposes.

"The growth of identity crimes has influenced a number of strategies by financial institutions that want to make new technology investments to meet both compliance (Know Your Customer) and fraud challenges," said Montez.

Some of the most common methods used to combat application fraud for new deposit accounts include verifying identity data with third-party databases and checking consortium-based databases for account abuse and known fraudsters. Rather than making bank account verification a written process that requires human intervention and monitoring, today's AI systems can check these databases, make a comparison, and approve or deny the account within a matter of seconds, all while preserving the bank's security and reducing the amount of first-party fraud. Get in touch with an Envestnet | Yodlee rep to learn how to start putting AI to work for you and your customers in your own financial institution. We’ll answer any questions about our platform API, financial applications, and data offerings.

  1. AI: Transforming the Digital Account-Opening and Onboarding Experience
  2. Application Fraud: Fighting an Uphill Battle