Biometric technology set to improve financial risk

Thelawstore.com.au has developed and launched a digital verification technology — livesign — that uses biometrics to ensure the person who is signing the document is the correct person.

The technology works by verifying the identity of a person during the point of signing a high-value transaction document, eliminating the risk of fraud in the process.

Lara Paholski, chief executive of thelawstore.com.au; head of customer service for Gateway Bank, Zeb Drummond; and CEO of Land Services, Brenton Pike, spoke on a panel on 26 September at the annual convention for the Customer Owned Banking Association (COBA 2022).

The discussions involved how the advent and introduction of biometric technology are being used to reduce risk and improve the verification process for banks, customers and mortgage lenders.

The past decade has seen technology play a part in the verification of identity (VOI) process, and although it’s convenient, it could leave banks and mortgage lenders at a heightened risk, according to Mr Pike.

Spouses, partners or other external parties could sign and demonstrate a level of verification (e.g. a driver’s licence number) with the “real person” genuinely signing the documents.

Mr Pike stated the rationale behind introducing a national standard of VOI technology was due to the risks of digital signing and that banks and mortgage lenders were being put at “risk of approving mortgages or loans for a customer who might have been the person signing”.

“We needed regulations to reduce the risk and improve the verification process for banks, mortgage lenders and customers. Over the past decade, we have worked to this VOI standard, however, as digital signing improved and people could fill out documents online, verification became much harder,” Mr Pike said.

Mr Drummond stated that Gateway Bank has introduced various technologies, such as livesign in Aprill 2022 and attributes this technology to “significantly improving the mortgage lending process” for the customer and removing risks for the bank.

“livesign is an amazing technology, built on biometrics. It is genuinely designed to make the customers’ life easier, while de-risking business for us in the finance and mortgage industry,” Mr Drummond said.

Ms Paholski further stated the reasons behind the development of livesign: “We’ve seen a shift in the way banks and mortgage lenders are succeeding, and that is by being extremely considerate of the customer and their needs. Technology like livesign ensures that these lenders can support their customers, removing risks or confusion in many aspects of the loan process.

“At the same time, our technology was designed with the banks and mortgage lenders in mind. We have always been aware of the risks around digital signing — in fact, any signing processes that could be forged, intentionally or not — and wanted to create a tool that removed this risk for the lender — livesign was the result.”

[RELATED: How financial services businesses can avoid fraud]