Wealth Management biometrics face verification technology

How Facial Biometric Technology Secures the Wealth Management Industry

October 30 2023

Picture this: A fraudster hacks into the email account of a high-net-worth individual (HNWI). The fraudster then contacts the individual’s wealth management company and requests funds to be moved into a new account. Because the request is coming from the client’s email, an employee at the wealth management firm approves it. The fraudster escapes with the stolen funds.

The wealth management sector needs utmost security: because they deal with ultra-high-net-worth and high-net-worth individuals, the financial gain from defrauding a wealth management account can be huge. 

In this highly regulated industry dealing with high value assets, a robust solution is essential to secure online onboarding and authentication. Biometric face verification enables wealth management organizations to prove an individual’s identity when they access services remotely, without inconveniencing the user in any way. The right solution should be secure, convenient, and easy to use.

For private banks and relationship managers, the importance of verifying the genuine presence of an online client has never been higher. 

Traditional Verification Methods Fail To Defend Private Banks and Wealth Management Companies

For such a high-risk sector, single-factor authentication simply isn’t secure. It’s easy for a shrewd fraudster to get past it. Passwords are weak and only fit for purpose as part of a wider multi-factor authentication (MFA) strategy, and social engineering attacks are rife. Plus, technology has made brute force attacks easier than ever. 

In addition, there is a unique complexity to financial affairs in this industry, which increases opportunities for fraud. Private banks and wealth management companies can carry out a wide range of financial services for HNWIs and their families, including retail banking, investment management, tax affairs, estate planning, and legal matters. Establishing trust in this context is complex but essential. 

Criminals target wealth management firms’ clients because:

  • HNWIs are often a good target, offering high returns for successful scams. They do not have a standard profile for spending; patterns can cross different time zones and locations. This can mean fraudulent transactions fly under the radar.
  • It can be easier to impersonate someone in the public eye, as everything is known about them — it can be easy to find their mother’s maiden name or pet’s name, for example.
  • Clients often don’t like (and are resistant to) the inconvenience of multi-level authentication, where they are asked to confirm different knowledge-based or possession-based information.
  • Clients frequently have others managing their money for them such as money managers, PAs, housekeepers, and other staff. Traditional retail banking based fraud solutions can’t protect this structure.

Why is Biometric Face Verification Needed for Private Banks and Wealth Management Companies?

iProov works with wealth management firms to securely verify and onboard new clients, securely authenticate account/portal sign-in, and authorize high-risk transactions using advanced biometric face verification technology.

The face is essential because it facilitates matching a unique biometric characteristic against a trusted identity document (such as a driver’s license) in order to establish genuine identity. Meanwhile, robust liveness technology works to ensure an online user is a real person, detecting if the face being presented to the camera is a live human being.

This minimizes many threat vectors by ensuring that only those verified and authorized can access or manage the HNWI’s account. Once verified, payments or other transactions can be authorized with a brief, effortless facial scan. HNWIs can use any device with a user-facing camera to authenticate. There are no complicated instructions or steps to follow. It’s simple, yet delivers the highest levels of security.

iProov also allows clients to effortlessly recover their identity if a device is lost, stolen, or replaced. This can often be a tedious and insecure process without iProov, as clients would have to reverify their identity to the organization (often requiring sending physical documents!)

Not all liveness technology is created equal. As wealth management is such a high-risk environment, only iProov’s most mission-critical solution is recommended to enable an organization to be sure that the remote user is the right person, a real person, and that they’re authenticating right now. 

The Benefits of Face Verification for Wealth Management Firms

1. Building and maintaining customer trust

For private banking and wealth management firms, establishing and maintaining trust with clients is vital. It ensures that the firm wins the client’s business in the first place, and that the business is retained. 

Wealth managers typically have strong personal relationships with their customers, and in-person visits are common. However, HMWIs want and need digital access. According to McKinsey, 71 percent of private banking clients prefer multi-channel interaction, and 25 percent want a fully digitally enabled private banking journey (with remote human help if needed).

iProov’s technology enables wealth management firms to demonstrate to their clients that they are using the gold standard in online security and user experience. This builds initial trust and retains it through secure, effortless authentication that does not inconvenience the client.

2. Avoiding reputational risk

Wealth management firms depend on their reputations. A security issue with one client can not only jeopardize that particular relationship, but can impact current and future business. 

3. Adding value to customer service

Private banks and wealth managers often use ‘callbacks’ to maintain security and to demonstrate a responsive and personal service to their clients. This means that transactions are validated via a callback either from a call center team or by the relationship manager. This is a common point of friction between wealth management firms and their customers: “I’m busy/in a meeting/I can’t talk now so just go ahead etc…”. It’s also a weak link in the security chain: a fraudster could manipulate this process if they’ve intercepted a user’s mobile. 

iProov helps add value to the customer service process by:

  • Reducing the time and cost involved in onboarding new customers by automating identity verification and digitizing security processes.
  • Reducing the reliance on inconvenient (and costly) callbacks.
  • Eliminating the need for further digital authentication tools.
  • Reducing staff and client time spent combating fraud through checks and manual interventions.

4. Delivering effortless user experience and accessibility for all clients 

Each HNWI will expect a level of service that meets their individual needs. Some HNWIs will be technically advanced and want to engage with their wealth managers on multiple devices smartphones, tablets, and laptops. Others may not even own a smartphone. 

iProov offers a consistent, effortless user experience across all devices which…

  • Offers reassurance. iProoving requires no effort, yet there is enough ‘ceremony’ to help the user feel reassured that a secure authentication has taken place.
  • Is accessible on any device with a user-facing camera, including mobile devices, desktop computers, and tablets. 
  • Is effortless to use. Age and ability should not be barriers to accessing services.
  • Uses carefully selected training data to ensure diversity and check for bias in our system.

5. Protecting against fraud

As discussed above, HNWIs and wealth management firms are a target for fraudsters as the returns can be big if a scam succeeds. iProov can help to protect against fraud, so that money is not stolen and a bank’s reputation is protected. Fraud attacks can include:

  • Account takeover fraud: where an imposter or fraudster gathers credentials and personal information about a target, in order to gain direct access to a client’s accounts online so they can steal money.
  • Credential stuffing attacks: achieved by taking collections of login credentials from data breaches on other less protected sites and using them to access wealth management accounts.
  • Impersonation fraud: where an imposter or fraudster pretends to be a client and approves transactions.

Criminals use a variety of tactics to steal money and cause disruption. These include malware, digitally injected attacks and the use of deepfakes. iProov is unique in being able to detect and mitigate against the use of synthetic imagery, such as deepfakes or face swaps, in attacks.

Ultimately, a strong biometric solution can deliver unrivaled security for the wealth management sector. iProov is trusted by the world’s most security-conscious organizations – such as the Department of Homeland Security, UBS, and the UK Home Office – and other banks such as Knab and Rabobank for a reason.

If you’d like to see how iProov’s Genuine Presence Assurance technology can secure and streamline your online customer onboarding and authentication, book an iProov demo here.

Back to Resources

Get a demo