Aussies will undergo instant online identity verification process

[img_assist|nid=7879|title=|desc=|link=none|align=left|width=66|height=100]Now customers in Australia may use the first end-to-end online account opening service offered by the Dutch bank.
Direct implements an almost instant online identity verification process instead of the traditional 100-point security check to allow customers to open savings and term deposit accounts. Other banks in the country are going to follow its lead.

The service is based on the new AML legislation that allows financial institutions to replace the traditional 100 point security check, which uses physical documents such as passports. Thus the latter will be replaced by electronic AML compliance checks.

Nearly 40,000 banks, credit unions, brokers, lenders and casinos were obliged by AML and counter-terror financing laws introduced in December to authorize customers each time they open an account, obtain a loan, buy traveler's checks or make an electronic funds transfer.

Besides, the laws impose on service providers the responsibility to report all kinds of "suspicious" activity to the AML regulator, Austrac, for further investigation.

"The AML and counter terror financing legislation changed last December and one of the effects was that it made the verification piece channel-neutral," says Lisa Claes, ING Direct direct business executive director. "Before then if you had an account that fell into one of the prescribed categories under the old Financial Transactions Reports Act you could only identify through a variety of face-to-face means.

"We were able to show the Government that electronic verification was robust and an alternative method to face-to-face. The legislation now says you have to conduct verification but it doesn't proscribe the channel." Previously used 100-point "in-wallet" style of verification was vulnerable, especially if someone stole a wallet and used it to steal an identity.

"We can ask questions that people don't have answers to in their wallet," says Tony Fitzgibbon, managing director of FCS Online which is a third-party identify verification service.