An FSA working group set up earlier this year to find ways of defusing industry concerns over customer identity verification, has given a major boost to electronic verification solutions such as Callcredit's CallML and CallVerify.

In a progress report entitled ID: Defusing The Issues published this month, the FSA working group acknowledges that electronic verification is a valid approach that "in many cases is likely to have greater authority and be more convenient for both firm and customer than using paper documents."

Callcredit's Director of Industry Relationships Mel Mitchley commented;

"It's good to see the FSA sending out such a positive message about electronic ID verification.

"ID Verification has become a significant issue for the financial services industry in recent years. Although everyone understands that it plays an essential part in preventing financial crime, in the absence of a national ID scheme nobody is sure what method of ID verification to use. They are uncertain whether they are satisfying legal obligations or even doing more than they need to! And, of course, everyone is concerned about inconveniencing customers any more than is necessary."

The FSA report highlights several advantages of electronic verification including:

  • it can be a straightforward way of accessing several primary data sources;
  • customers do not need to provide documents, unless the firm considers that further corroboration is required in the circumstances;
  • record keeping is easier and cheaper;
  • in non-face-to-face business it reduces the need for customers to send important personal documents by post, with risk of loss and inconvenience;
  • it can be cheaper than obtaining paper documents;
  • it can be delivered in the broader context of other related checks

At the same time, the report says that although electronic verification is already recognised in the JMLSG Guidance Notes, there has been some hesitation to adopt it "because of concerns about its effectiveness and uncertainty about its compliance with legal and regulatory obligations."

Mel Mitchley added:

"At Callcredit, we agree entirely with the Working Group's findings. There is still plenty of work to be done to educate the industry. We will continue to work very closely with the FSA and other regulatory bodies to establish standard practices for electronic verification and clear guidance on when and how to use them."

CallVerify and CallML are electronic customer verification services developed by Callcredit in response to the Government's 'Know Your Customer' crackdown on money laundering and its role in financing crime and terrorism. While CallVerify is a batch solution for re-verification of existing customers, CallML is an online service for checking that new customers are who they say they are and live where they claim to live.

Both solutions use a wide range of approved and independent data sources, including the Electoral Roll and a full credit database, to confirm an individual's identity in seconds - 24 hours a day, 7 days a week.