An identity proofing and digital banking survey from FICO shows identity theft is a tangible threat for people in the Philippines.
Conducted in January 2021 by an independent research company adhering to research industry standards, the survey engaged 1,000 Filipino adults, along with 13,000 consumers in the United States, the United Kingdom, Canada, South Africa, Australia, New Zealand, Indonesia, Malaysia, Vietnam, Thailand, Brazil, Colombia and Mexico.
Of those surveyed, 6.5 percent said their identity has been stolen and used by an impostor to open an account and a further 5.4 percent believed it likely to have happened.
The acknowledged level of risk from identity theft means there is a good understanding of why identity proofing is an integral part of the banking experience in the Philippines.
Need for ID proofing
Three-quarters (76 percent) of respondents recognized identity proofing happens for their protection. Most people were not cynical about the reasons their identity was confirmed. While 49 percent recognized there was an element of regulation driving providers to carry out more checks, only 9.5 percent thought this was done to enable financial institutions to sell more.
A majority (67 percent) of Filipino respondents did see identity proofing as a way for banks to protect themselves — the second highest number out of the 14 countries surveyed — but 54 percent regarded it as a tool to prevent money laundering.
Most Filipinos were open to providing their bank with a biometric such as a facial scan, fingerprint or voiceprint to secure their accounts. The survey revealed once they understand why the necessity, 68 percent were happy to provide their biometrics. Only 6 percent said banks should never capture biometrics, while 11 percent were willing but unhappy to provide these.
“In a lot of Asian countries, fingerprinting, identity cards and authentication apps have been commonplace for some time,” said Subhashish Bose, lead for fraud, security and compliance in Asia Pacific. “There is less concern around privacy and the survey shows there is broad acceptance of the benefits biometrics deliver when it comes to securing bank accounts and stopping money laundering.”
Asia is all about smartphones
In the Philippines, 41 percent of consumers surveyed preferred to open bank accounts digitally while a little over half preferred branches. However, over the last year, thanks to the pandemic, 61 percent of Filipinos were more likely to open an account digitally than a year ago while those who went to branches often did so for social and technical reasons.
“The Philippines remains a cash and cheque society, with consumers visiting branches to make deposits and withdrawals using their passbook,” said Bose. “Poor internet connections and a strong belief accessing a branch offers a more informed and secure account opening process explains why Filipinos turn up in person.”
As the landscape and preferences evolve, this presents an opportunity for banks who adopt multichannel strategies and can engender trust in digital channels.
Jump through hoops
Filipinos who opened an account digitally, preferred to carry out the process entirely in their chosen channel whether it be smartphone or website. If customers were asked to move out of the channel to prove their identities, many of them would abandon the application, either giving up on opening an account completely (4 to 5 percent) or by going to a competitor (7 to 9 percent). Of those who did not immediately abandon, up to an additional 32 percent would delay the process.
The survey found disruption matters. Asking people to scan and email documents or use separate identity portals causes almost as much application abandonment as asking them to visit branches or mail in documents.