In 2020, one of the most common types of fraud was committed by customers. This is an increase of over 35% when compared to the previous year, according to a recent PwC survey. This is, in part, because customer fraud methods are getting more sophisticated—with complex techniques such as social engineering becoming commonplace. To keep up with fraudsters, businesses are beefing up defences. Indeed, background video is becoming an increasingly prevalent solution.
To see how effective background video is, in terms of preventing customer fraud, we conducted some tests. Here’s what we found.
Background video explained
Background video is a security measure that records the entirety of a client’s onboarding process via their phone or web camera. This helps ensure that a user is alive, acting on their own will, and providing documents that actually belong to them. This subsequently, prevents fraudsters from posing as or manipulating honest users. The video recording is usually analysed automatically to detect fraudulent signals. In suspicious cases, the recordings are transferred to the provider’s verification team for manual checks. In most cases, this step is deployed as an additional layer of protection.
All background videos are stored for future reference by your compliance team to deal with complex cases such as chargeback disputes or when fake documents are suspected.
Using background video for onboarding
Certain onboarding steps require confirmation from the user. These steps may include going to the next verification level, adding a bank card, etc. Usually, the user can pass these steps by taking a selfie or by providing certain documents.
Here are some cases in which background video may come in handy for ensuring that confirmation steps are genuinely completed:
1. During identity verification, when clients initially provide photos and documents for verification;
2. During authentication, when clients take selfies in order to regain access to accounts or change their account credentials;
3. For chargeback protection, when clients initiate transactions that exceed preset limits and must provide additional documents.
After some testing, we found that background video can be helpful for detecting fraudsters at multiple stages of the verification process. However, is background video better than the alternatives? Let’s consider the pros and cons.
1. Ensures a session is live. Background video uses biometric checks to automatically detect if a user is present during onboarding. This may prevent fraud attempts from the outset.
2. Detects the nuances of user behaviour. A live video recording provides a clear picture of what’s going on throughout the verification process. For example, it helps to detect if a user interacts with someone or uses props. So, if your compliance team has any doubts about a particular case, they can always reference the relevant video recording.
3. Streamlines certain document checks. Background video can help verify documents containing security features like holograms, which depend on the viewing angle and light conditions. This helps ensure that users provide official documents, rather than fake ones.
1. GDPR non-compliance concerns. Recording video without the user’s consent or with consent received from vague requests likely violates personal data law. To meet GDPR provisions, you must ensure that the provider gets explicit consent from the user to record background video. This means explaining that users—and their backgrounds—are continuously recorded throughout the verification process.
2. Checks may take longer. If experts need to review video recordings, decision-making regarding suspicious cases may become time-consuming. So, this method will inevitably require more human intervention than the more automated alternatives. Moreover, manual video review can lead to human error.
3. Price. Background video checks involve regular manual processing. Depending on the customer flow, there may be a need for additional employees, from one to dozens of people, who work with such cases. This can incur unforeseen payroll expenses.
For our verification platform, the cons of background video outweigh the pros. What concerned us, in particular, were the privacy and cost-related issues. Moreover, we found that the alternatives performed better—and we’d like to share some examples.
- Liveness technology uses facial biometrics to prevent spoofing and presentation attacks. It helps to determine if the user on the other side of the screen is real, and not an imposter or an individual using a prop. This is done by analyzing video recordings and pictures of a user’s face taken from different angles. Indeed, processing speeds and accuracy are increased without the need for human involvement.
We chose this solution because it makes for an easier user journey, yet provides a high level of fraud defence.
You can test out for free how our liveness solution works.
- Multi-step verification requests that users upload supporting documents wherever they take certain actions on the platform. These stages may include adding bank cards, making transactions, or proceeding to the next verification level. One may request a driving license or a proof-of-address in addition to an ID card.
The more documents you require, the harder it is for fraudsters to commit forgery. However, multi-step verification has a downside: requesting additional documents may hinder the user experience. Nevertheless, it remains an effective fraud deterrent.
To make the right choice, consider your priorities and specific needs. We shared our personal experience in the hope that it could be relevant to others considering these options. Over the years of working with biometric solutions, we discovered that testing is the best way of moving forward. During the tests, it’s important to focus on the metrics that matter most to you to make the best possible decision with a minimum investment of time and money.