AI-Powered Identity Verification: How to streamline onboarding for New & Repeat Loan Customers

Life is full of unexpected events that can catch us off guard, such as a sudden job loss or a medical emergency. Meet Priya Sharma, a successful marketing manager who recently faced an unexpected car breakdown that led her to dip into her savings. This unforeseen event left her with a smaller safety net than she would have liked.

For the past two years, Priya has diligently been repaying a personal loan to her bank.

Despite ongoing loan repayments, Priya has always dreamed of renovating her kitchen and adding a living space to her home to accommodate her growing family. The chance to secure a competitive contractor for the renovation prompts her to seriously evaluate her options.

Balancing her desire of a more spacious living environment with prudent financial planning, Priya is eager to assess the terms and potential impact on her monthly budget before pursuing a new loan.

Given her positive experiences with her current bank, she highly values their exceptional customer service and competitive loan rates. With confidence in the bank's ability to offer tailored solutions to privileged customers, Priya considers applying for a home renovation loan through their website.

Ever wondered how many customers, like Priya Sharma, choose to take out another loan while they are still in the process of repaying their current one or when they reach the end of their previous loan term?

A joint report by TransUnion CIBIL and Google Launch on “Consumer Credit Demand in India” reveals that more than half of borrowers come from a bank's current customer base. (Source: TransUnion CIBIL)

Repeat vs. Top-Up Loans: A Quick Guide

A repeat loan involves borrowing more from the same lender after settling the previous loan, while a top-up loan lets customers add extra funds to their existing balance during the repayment phase. Both options offer attractive interest rates, making them appealing to customers.

However, subjecting existing loan customers to a prolonged onboarding process can lead to drop-offs and dissatisfaction. Enter the need for a modernised identity verification process.

Missed Opportunities for Previously Verified Users

Traditionally, obtaining a loan through finance mobile apps or websites meant undergoing the entire identity verification process repeatedly.

It's no wonder that many applicants abandoned the loan application journey due to its length or complexity.

Dispersed data among systems renders a significant segment of your Existing-To-Bank (ETB) customers invisible, impeding personalised engagement and loyalty-building efforts.

This highlights the critical need for banks and NBFCs to modernise their identity verification processes by incorporating digital solutions.

Identity verification is a crucial step utilised by lenders in digital loan applications and services to reduce fraud risks and bolster security measures, whether it pertains to personal loans, auto loans, home loans, or consumer durable loans. 

Today, identity verification serves not only to enhance security, adhere to regulations, mitigate risks, and foster customer trust but also to provide customers with a seamless and efficient borrowing experience.

Introducing pre-filled online forms for Existing-To-Bank (ETB) customers will save time and enrich the overall user experience (UX), facilitating swift verification while maintaining KYC compliance for digital finance operations.

Lentra Identity – Unparalleled power of speed and security

Meet Lentra AI-powered digital identity resolution system, enabling businesses to promptly identify returning customers and efficiently onboard new ones. This system delivers expedited onboarding experiences for previously verified users, enhancing loan conversion rates.

Lentra's Identity Verification solution securely verifies a user's identity for the first time during the loan onboarding process. Upon returning for additional top-ups or a repeat loan, Lentra Identity distinguishes between Existing-to-Bank (ETB) and New-to-Bank (NTB) customers using KYC attributes like PAN, Voter ID, Driving License, Passport, Gas Bill, Mobile Number, among others, employing Exact Match techniques.

Lentra Identity also utilises non-KYC attributes, such as the customer's First Name, Last Name, Address, and City, to validate the customer's identity and accurately identify returning customers. 

By employing Fuzzy Match technique, this process is completed in mere seconds, allowing customers to quickly move through a faster Straight-Through-Processing (STP) route and enhancing their overall experience.

Identifying Returning Loan Applicants: Avoiding NTB Misidentification

While focusing more on identifying existing loan customers and offering a personalised loan journey to them, New-to-Bank (NTB) applicants who previously started but abandoned the loan application process also hold value.

Lentra Identity helps lenders identify these returning NTBs by:

• Leveraging data collected during their initial journey
• Analysing existing loan customer behavior for personalisation

Preventing False Fraud Flags:

Sometimes, minor discrepancies like address or name variations during onboarding can lead to false fraud flags for NTBs. 

Lentra Identity utilises advanced matching techniques, combining exact and fuzzy matching, to:

• Identify connections beyond exact details
• Prevent NTBs from being misclassified as fraudulent
• Increase loan application conversions by avoiding unnecessary rejections. This approach ensures lenders capture the full potential of both returning and new customers, leading to increased loan opportunities and improved customer satisfaction.

With Lentra Identity, Lenders can dynamically adjust specific match score thresholds for key information such as Mobile Number, Email ID, First Name, Last Name, and Address City by configuring unique logic for each loan product – Personal Loan, Business Loan, Loan Against Property (LAP). 

Cadenz Identity for Unstructured Data 

Lentra Identity goes beyond traditional data sources by incorporating unstructured data, including images, to enhance the identification process for both new and returning loan customers.

Lentra Identity's AI-powered facial recognition streamlines customer onboarding by analysing facial features for accurate identity verification and delivering real-time matching results with a similarity score.

The Face Comparison system, supported by a sophisticated deep learning model, is instrumental in accurately verifying the similarity between facial features in a document image and a selfie image.

To further enhance security, Passive Liveness Detection ensures the dynamic presentation of a live face during the facial recognition process. Operating seamlessly in the background, this feature offers a swift, effortless, and frictionless user experience within Know Your Customer (KYC) and Video Know Your Customer (vKYC) flows.

Initial implementations have shown a significant decrease in drop-off rates for banks, with customers already leveraging their stored identity information within the core banking system to expedite their loan application processes. This enhanced experience has halved the time required to complete a verification session, providing a quicker process without compromising security.

Benefits of a Comprehensive Identity Verification Solution

Lentra Identity Verification is fully integrated within Lentra's Intelligent Lending Cloud stack, enabling the delivery of value-added features that traditional identity providers cannot offer. The key benefits include: 

• Streamlined KYC: Enhance customer experience with a secure and user-friendly KYC process. Simplify onboarding for New-to-Bank (NTB) customers and provide auto-filled online forms for Existing-To-Bank (ETB) customers, saving time and improving overall user experience (UX).
• Enhanced Privacy Assurance: Build trust in the security of customer information through a transparent, user-controlled identity verification process. Protect data by storing it in redacted, tokenised, and encrypted formats.
• Robust Fraud Prevention: Deploy advanced identity verification techniques to combat fraudulent activities, ensuring a secure lending environment.
• Unified Customer View: Adopt a comprehensive identity resolution system to consolidate fragmented data, offering a single, accurate view of customer identity for immediate identification of Existing-To-Bank (ETB) customers and personalised loan journeys.
• Compliance Agility: Utilise unique customer IDs to adhere to standards and implement adaptive strategies to navigate evolving regulatory environments seamlessly.

Get Started

When utilising Lentra's comprehensive identity resolution system, you gain access to a Single Customer View (SCV), consolidating fragmented data to provide a unified, accurate view of customer identity for immediate identification of Existing-To-Bank (ETB) customers and providing personalised loan journeys. By harnessing the power of Lentra Identity's streamlined and efficient identity verification system, lenders can make the financial aspirations of millions of customers, such as Priya Sharma, a reality through a seamless loan onboarding experience. Stay tuned for further updates.

Start your Lentra Identity Verification journey today with our no-code integration option or reach out to us at [email protected] for more information.