A few month’s ago, Future Identity was pleased to interview Faizal Nunes, Global Head of Anti-Fraud at Credit Suisse. We spoke about how customer expectations are evolving in the investment banking and retail banking spaces, how the process of identity verification is changing and the challenges that financial institutions face in tackling new kinds of fraud and financial crime.
Faizal Nunes, Global Head of Anti-Fraud, Credit Suisse
What potential points of friction exist when it comes to onboarding new customers?
Within our high and ultra-high net-worth customer segments, the difficulty is the complexity of structures we are faced with at onboarding. We need to verify not only the identity of an individual or an organisation’s appointed director, but also the identity of the ultimate beneficial owner. This is a complex process involving enhanced due diligence but is essential to make sure we are not aiding in financial crime.
When it comes to our retail banking arm, the challenge is to match the identity of a potential new customer to their identity document. When an account is opened virtually we need the right technology in place to ensure a sophisticated pattern analysis and comparison to an authenticated and accurate database. We need to minimise the number of false positives and generate more true matches, to give confidence internally, and ultimately to the regulator, that we have been able to identify the right person at point of onboarding.
What are some of the main challenges financial institutions are faced with in tackling fraud?
As a leading financial institution for private banking, investment banking and asset management, with a retail banking division in Switzerland, we carefully track how geopolitical and macro-economic trends may impact the types of fraud and financial crime we are faced with.
Currently we are identifying significant pressure caused by a rise in interest and inflation rates, and the potential of a recession around the corner. While we haven’t seen evidence yet, we expect these trends will lead to an increase in external fraud.
“We need to verify not only the identity of an individual or an organisation’s appointed director, but also the identity of the ultimate beneficial owner.”
A recession would have an impact across the supply chain. Faced with a loss of clients and credit options, organisations may be prone to falsify sales statements, and look to obtain loans from banks based on falsified assets and liabilities. Our corporate banking and lending businesses will be under pressure to mitigate this risk.
What changes have you observed in the digital appetite of your customer base in recent years?
Since the covid pandemic, there has been an increase in demand for digital services from retail banking customers, but for corporate and high or ultra-high net-worth clients, the expectation remains for a more personalised service. I think as old money generations shift to the millennial and younger generations, a demand for new technologies will hit the large private banks. Not in a matter of months, but with time we will be faced with a very different conversation.
Younger generations are used to using apps and QR codes and expect a very different experience to the traditional private banking experience centred on meeting face-to-face with relationship managers and providing documents in physical form. As customer expectations change, a business need will develop and we will see investment into new technologies, but we cannot force clients to make this jump until they’re ready.
“As customer expectations change, we will see investment into new technologies.”
How do you see digital identity verification evolving across the customer lifecycle?
The technologies now exist to onboard clients remotely using biometrics and pattern matching. There is also a growing trend towards a ‘self-service’ identity model allowing clients to use the credential created at onboarding for future authentication and access. Alongside this approach, banks will need the right tools in place to be absolutely confident in the integrity of an authentication attempt.
A growing trend of SIM or device hijacking makes it important to have additional authentication layers on top of the credential created at client onboarding. By using two, or even three factors of authentication through SMS, app, or email we can mitigate the risk that a client’s device has been compromised.
What do you predict the bank of the future will be like?
The bank of the future will provide products and services in a very agile and customer-centric way. In the corporate banking sector, I think there will always be a need for human interaction and an app alone will not be enough.
But what we will see is a significant investment in artificial intelligence to provide faster and more automated service, so that humans who have traditionally been involved with reviewing documents or making payments, can invest more time into maximising and building client wealth. Technology will be deployed to ensure more people are used on the relationship side of banking and less on the operational side.
“The bank of the future will provide products and services in a very agile and customer-centric way.”
The c0nversation continues at the Future Identity Festival, on November 13th – 14th at The Brewery, London – registration is now open!