Developers Guide for ID Verification APIs in Banking Apps

Among all other sectors, banks have to deal with the most sensitive data i.e. financial information. These institutions obtain the financial details of customers that must be safeguarded against internal or external threats. Security breaches in the banking industry can disrupt the whole corporate system. In recent years, KYC (Know Your Customer) and AML (Anti-Money Laundering) practices have shifted to regulations from restrictions to guarantee security. According to a report, a conventional bank can save up to 10 million Euros by using extended technologies for AML/KYC compliance.

Remote Identity Verification — A High-Tech Protection for Banks

In today’s era of technological advancements, identity verification can be done without an in-person meeting — through online platforms. Online identity verification has proved to be an effective and feasible method for mitigating identity fraud, financial scams, and potential money laundering. Using AI models IDV can now be performed through automated solutions instead of humans, the software has negligible errors authorizing only legitimate users to access the banking accounts.

Identity verification solutions can be used in both phases, verification and authentication. Let’s discuss the first one, the customer’s identity is verified by validating their government-approved ID documents (like a passport) and the photo ID is matched against facial biometrics. In the second, the live captured selfie is compared with the previously stored biometrics during verification. The IDV solution can be integrated into banking apps and websites through APIs.

What to consider while choosing a Third Party API!

Software developers have to integrate extended AI-driven technologies while developing a banking app or website. They have to put in extra effort while developing modules for Facial Recognition, Document Verification and Data Extraction.

So why develop an in-house solution when you can easily outsource the entire process.

Software engineers should consider the following things before purchasing APIs.

Defining End-Users

The individuals that are directly using software or a product are called end-users. The developers and businesses always identify and define their end-users to provide them services accordingly. There are different factors of classifying end-users like demography and age group of their clientele, and also not to mention their socio-economic situation and why they are using the software.

API solutions should reflect the requirements of end-users with no extra functionality. It should be user-friendly and requires no additional training. As banks have vast customers hailing from all sections of society from a layman to a college professor, the functionality of API must be universal.

Make sure you describe your end-user clearly to the API provider…

Once you have defined your end-user, make sure the API UX and UI is in line with the demands of your end-user. API interface should be easy to use for the end-user…

User Experience & Interface

The way a user interacts with or uses a software product is known as user experience and the visual designs, layouts and typography is referred to as the user interface. As the users can be from different backgrounds and regions so the colours, interface and language should suit them.

The verification flow should be easy to understand for the end-user. It should be self-explanatory as the whole idea of digital IDV is seamless and smooth identity verification.

Data Protection

As discussed earlier, data is the most significant element in banking. The ID pictures are to be shared with the API provider for verification. If the data is used for any other purpose like selling to marketing firms, it can lead to legal suits of data privacy.

The data should be encrypted and stored in the cloud servers (so that it can be accessed globally) adhering to international data protection standards like GDPR. Furthermore, the end-user must have the authority for the removal/deletion of data after a specific time frame.

Portability

The independence of the operating system (OS) and version tells how long a software can be used in future. If the software can’t upgrade to corresponding versions of the OS, there are infrequent chances that it will sustain itself in the long run. The software should be operational on all major operating systems (Android, iOS and Windows) so that it could have a wider range of users. The portability of API must be studied before choosing as it can restrict the number of users.

The API should pass these portability tests;

Installability: Checking the installation on various systems, environments and versions with valid hardware configuration. The allocation of libraries and dependent files is also tested.

Compatibility: It is the characteristic of a module (software) to operate successfully with other modules.

Adaptability: The capability of software to adapt to changing environments or components without any additional actions.

Market Value

It is the best strategy for picking a product, for example, a user will see the rating of an app before downloading one. The same can be done for selecting APIs for a banking app. The market value can be analysed by studying the provider’s clients reviews. The Salesforce Appexchange is one of the most trustable sources while studying the market value or client satisfaction of identity management (IDM) software like IDV solutions.

Why Third-Party APIs? -

It can be thought that if software engineers can develop a whole banking app, they can also develop an identity verification module.

Have a look at the benefits of Third-Party APIs before developing an IDV solution.

- Quicker Development

It saves the time of the development team as they do have to work on totally different functions and modules. The span of months can be reduced to days by integrating previously developed APIs. This time can be utilized for other significant tasks during the SDLC.

- Cost Reduction

Budget affects software development the most after time. Developing an in-house solution can take months, thus more salaries have to be paid to developers. Through API integration, the budget can be reduced and could invest in improving the features and removing bugs from the app.

- Skilful Development

The development team isn’t proficient in all aspects of software engineering. Using third party APIs can give the best features — as are developed by skilful field developers, also eliminating unnecessary hurdles while development.

- Increased Scalability

The in-house software can’t have the level of scalability that modern IDV solutions are providing. As the solutions have been tested and upgraded continuously for improvements, the new software will take much time to achieve that level.

The IDV software is trained on thousands of datasets to spot abnormalities in the ID documents and detect fraudulent attempts. The new software will not be mature enough to perform verification with the same efficiency.

Final Thoughts

Developing a banking mobile app or website requires drivers skills which can increase time and cost, however, previously developed APIs can be purchased from third parties. The identity verification API and SDK can be utilized for complying with KYC/AML regulations without putting extra effort into development.