International monetary institutions are faced with a expanding have to have to “”know”” – determine and authenticate – their buyers, to avoid fraud losses, the funding of terrorism, revenue laundering, and tax evasion. Failure to comply with correct identification of the institutions buyers can outcome in monetary losses, fines, and negative publicity. Present ID Verification Practices at Monetary Institutions Monetary institutions commonly confirm ID for the following kinds of transactions: Account Opening: The Patriot act initially needed institutions to retain a copy of the ID presented through the account opening. This was subsequently decreased to requiring only the recording of essential data proving that ID was verified (e.g. driver’s license quantity). Though it may well suffice to note the ID quantity, a easy clerical error, such as transposing numbers may well invalidate the proof of the ID verification. Capturing the ID card through the account opening procedure confirms that the ID was verified, and opens the door for much better subsequent interactions with the buyer. Possibilities include things like: a) Adding the photo ID to a bank-issued debit or credit card, with out the have to have for photo capture gear. Tiny photo IDs are made use of by warehouse clubs in combined member/credit card applications. b) Displaying the ID/photo, individual traits, and signature to the teller through a transaction to decrease ID fraud. Routine Transactions: Machine-readable identification cards (ID cards, credit/debit/ATM cards) can be made use of to determine a buyer. The teller application can pre-populate data about the buyer to speed up the transaction, and to make a far more pleasant buyer knowledge. Money Withdrawals: ID cards are commonly needed for any money withdrawal by a buyer at a branch unless the withdrawal is at the customer’s property bank and the buyer is personally identified to the bank employee. Huge Transactions: Monetary institutions commonly need a number of pieces of ID for transactions more than a particular quantity threshold, which includes transfers and deposits. This is vital since losses can take place with significant deposits (such as cashier’s checks) exactly where the deposit is a forgery, but only detected right after the quantity was withdrawn. Verify cashing: A current FDIC survey (1) showed that 7.7% US households are unbanked, and more than a quarter – 25.six % – of all households either never have a checking or savings account at all, or have a bank account but nevertheless select to rely routinely on “”option monetary solutions”” like payday lenders and pawn shops. Serving these buyers can be lucrative, specially in a challenging economy, but need options to positively determine a particular person who is not a buyer of the monetary institution. This enterprise is these days largely handled by verify cashing shops, pawn brokers, but increasingly viewed as an chance to bring buyer into shops (such as comfort shops and gas stations) by providing verify cashing solutions. In verify cashing applications, the ID card is needed for initial account registration and for subsequent verify cashing transactions. Government Regulations: ID verification is needed for any monetary transaction that may well need government reporting, such as in the US money transactions more than $10,000. In nations with foreign exchange regulations, transactions have to have to be reported by government ID quantity. Most foreign exchange windows need a valid ID. Developments in Identification Documents Post 9/11, it has come to be evident that government-issued identification (passports, national ID cards, driver’s licenses) had been not sufficiently protected against forgery. The 9/11 Commission advised that the U.S. strengthen its program for issuing identification documents, urging the federal government to set requirements for the issuance of sources of identification. For international travel, the International Civil Aviation Organization (ICAO) troubles a common for biometric passports, or e-passports. E-passports include things like biometric data on the passport holder on a safe chip. Public essential infrastructure is made use of to authenticate the information stored on the passport chip. The United States (two) and most of the EU nations have adopted e-passports for all new passports issued. Passports are only needed for international travel, and are not commonly made use of as ID in domestic industrial transactions exactly where state-issued driver’s licenses are the major identification documents. The style of state driver’s licenses has commonly been insecure and pretty uncomplicated to forge. The uncomplicated availability of counterfeit state ID documents creates a challenge with ID theft, and the enforcement of liquor sales restrictions. In 2005, President Bush signed the True ID-“”Enhanced Safety for Driver’s License and Private Identification Cards”” Act (three). True ID has been controversial, with quite a few states demanding a repeal and replacement with the proposed PASS ID act. As of January 2011, Division of Homeland Safety issued a waiver of the deadline, but states should be in complete compliance by Might 2011. In addition to True ID, Michigan, New York, Vermont, and Washington are issuing Enhanced Driver’s Licenses (EDL) (four). EDL’s present proof of identity and U.S. citizenship, are issued utilizing a safe procedure, and include things like technologies that tends to make travel simpler. EDLs are an option document to comply with travel guidelines below the Western Hemisphere Travel Initiative (WHTI) for getting into the United States from Canada, Mexico, or the Caribbean by way of a land or sea port, in addition to serving as the permit to drive. Michigan, New York, Vermont, and Washington concern WHTI compliant documents. Regardless of the opposition to True ID, most states are implementing new driver’s licenses and state ID cards that include things like enhanced safety options: Magnetic stripes – magnetic stripes have been the most important system for storing data on a credit/debit/ID card. They are not pretty safe, but are typically retained for compatibility with a significant installed base of gear. two-D barcodes. EDLs need a Machine-Readable Zone (MRZ) or barcode as backup to the RFID. Lots of states are adopting two-D barcodes in fundamental driver’s licenses. two-D barcodes made use of in Ohio and Georgia driver’s licenses can shop far more information, and information can be protected with encryption or digital signatures. Radio Frequency Identification (RFID) chips. RFID is made use of for Enhanced Driver’s Licenses and the Trusted Travelers Applications (NEXUS, SENTRI, and Rapid). Ultra Violet Zones. UV zones include invisible symbols that light up only in the presence of UV light. These are complicated for counterfeiters to copy. Microprint. Microprint on driver’s licenses prevents forgery. As with bank notes, microprint can be recognized with magnifiers and higher resolution imaging devices and make counterfeiting far more complicated. Colour and positioning of holder photograph. As with banknotes, colour patterns and placement are made use of to decide forgeries. Applications of ID Card Imaging The availability of scanners and computer software to capture ID card magnetic stripes and pictures open possibilities for two levels of utilization of the ID card pictures: Archival storage of ID card pictures gives a definite proof that ID cards had been presented. As noted earlier, they can present levels of protection against ID theft by displaying pictures of the ID holder. Even a easy application of recognition technologies (comparing data from the card text, magnetic stripe, and barcode) will detect quite a few frequent forgeries. Storing front/rear pictures of ID cards present proof that the bank employee complied with the Patriot Act, acquiring the ID of a new account holder. Authentication requires the ID verification to the subsequent level. Authentication options present an automated method to ID verification, alerting the user of possible threat things, forgeries, and expired ID cards. Sophisticated ID detection systems (see instance: advancediddetection.com), commonly include things like a colour/higher resolution scanner combined with computer software to genuine ID cards. ID authentication options Scan the ID in colour, with higher resolution Study barcodes and magnetic stripe information Confirm infrared patterns Cross-verify data in clear text, barcode and magnetic stripes Warn if the ID card is expired, a particular person is below legal age, and so on. Automated authentication systems are made use of, for instance, in liquor shops and restaurants to steer clear of sales to minors. It is intriguing to note that the Transportation Safety Administration (TSA) has not implemented automated authentication on a wide scale. TSA has accepted bids for systems, but so far has restricted ID authentication to workplace instruction and hand-held UV lights. Application of ID Scan/Archive and Authentication in Monetary Institutions Most teller stations in monetary institutions are equipped with a validation/receipt printer, a Computer, monitor and keyboard. Extra sophisticated institutions deploy money dispensers, money recyclers, coin recyclers, and signature/PIN pads. Verify image capture has moved largely from centralized proof/reader/sorter operations to branch capture. A majority of monetary institutions have implemented branch capture (est. 68% of branches) at the back counters. Back counter capture eliminates the “”prime pass”” but does not remove most of the back-workplace verify processing tasks. It delivers handful of fraud prevention possibilities – by the time the item is captured the particular person will have left the branch. Fewer but far more technologically sophisticated institutions have implemented verify capture at the teller. Implementations of teller capture are expanding swiftly in 2010/2011 with quite a few main regional institutions adopting teller capture. However, existing teller scanners are not suited for ID capture, and even much less for ID authentication Initially generation verify scanners had been oriented towards the “”lowest frequent denominator””, 200 dpi bi-tonal pictures, which may well be adequate for verify image exchange but not nicely suited for IDs. The installed bases of devices have a u-track style that can’t procedure stiff products such as IDs. Teller scanners are created for a 5 year life cycle, but with declining verify volumes will final 7-10 years or longer. It is consequently necessary for the sector to make certain that the subsequent generation teller scanner is far more versatile to defend the substantial investment needed to implement teller capture. The presently offered absolutely free-standing options for ID authentication are not nicely-suited for branch banking, since ID authentication options are not integrated with other banking applications Absolutely free-standing ID authentication options are costly and would consume important teller workspace. It tends to make significantly far more sense to use teller verify scanners for ID capture. To allow future ID scan/authentication applications, a appropriate teller scanner should present A straight track for stiff ID cards. Because restricted footprint and the have to have of 100-item hoppers and stackers need a u-shaped style, ID cards should be scanned utilizing a “”by-pass feeder”” that enters nevertheless products right after the bend, but prior to the front/rear cameras. A resolution of at least 300 dpi, with 256 gray level image capture. An integrated magnetic stripe reader. The subsequent generation of verify scanning devices will let institutions to capture ID pictures for Archival storage of proof that the institution validated the ID Automatic capture of buyer data (name, address, age, sex) for new account opening or future promoting of unbanked / competitor prospects. Added logon safety by authenticating the teller utilizing the teller employee ID card. More rapidly teller service by automatically opening the buyer account when an ID or credit/debit card is captured -with out an added Computer peripheral device. This is typically made use of in teller operations in international banks. Recoding of ID pictures for show at teller workstations to avoid withdrawals with stolen ID A level of authentication supported by 300 dpi grey-scale pictures, such as decoding two-D barcodes, and matching ID card and account information with barcodes and magnetic stripe data Potentially adding ID images to bank-issued Debit/ATM cards, a practice effectively made use of by warehouse clubs for combined membership/credit cards, with out extra photo gear. Application of ID Scan/Archive and Authentication in Alternate Monetary Solutions Channels Option monetary solutions channels present solutions that are largely targeting the unbanked/below-banked population. Alternate monetary solutions are offered by pawn brokers, verify cashing shops, spend day lenders, gas station shops, casinos, comfort shops, and even prisons. A current Wall Street Journal short article (five) ] lamented that the 2009 Credit CARD (Card Accountability Duty and Disclosure) Act “”pushed far more Americans outdoors the banking program”” in the name of customer protection. Lots of alternate monetary transactions are performed on monetary self-service kiosks. Kiosk integrator manufacture devices with a wide array of options: ID card readers, debit/credit card readers, verify acceptors, money dispensers and acceptors, cameras, and even revenue order and shop worth card printers. Because these buyers commonly do not use a bank card as the ID or debit/credit card, the driver’s license becomes the major identification tool. The following is an instance of an application implemented at comfort shops of a gas station chain with the CTS SB50E module in a self-service kiosk: Consumer registers by inserting the driver’s license. The ID is scanned, stored, authenticated by computer software, and returned to the buyer. The buyer is registered utilizing data from the ID (clear text, magnetic stripe and barcode). The buyer feeds in the verify. The ID and photo/video of the buyer is made use of for approval by a human operator at a central place. The operator accepts the verify and it is endorsed, stamped and retained in the device, or rejected and returned to the buyer. The kiosk dispenses money, a stored worth card, or a revenue order (minus a commission). Monetary self-service kiosks are funded by transaction costs, but are usually deployed as a promoting tool to bring buyers into the comfort shop. Future Technologies Advancements – UV and Colour Imaging Though colour pictures are common in most imaging applications, they have not been extensively adopted in US verify processing. But in international banking, the use of colour imaging and UV is expanding swiftly. Asian applications need greater-resolution colour pictures to authenticate “”chops”” – seals that function as signatures. Central banks in India (six) and Latin America are establishing verify requirements that include things like UV zones to avoid fraud. The new Reserve Bank of India Verify Truncation Method CTS-2010 (7) options include things like use of watermark and printing of bank logos that are only visible with ultra violet pictures. As a outcome, we will see advancements in verify scanner technologies, which includes UV and colour image capture for verify capture and authentication. Colour / UV image capture will present the chance to additional strengthen the strength of ID authentication. 1) ]FDIC National Household Survey two) Bureau of Consular Affairs, U.S. Division of State three) US Division of Homeland Safety – True ID Final Rule four) US Customs and Border Protection Enhanced Drivers License site five) Wall Street Journal, Jan.four 2011, Todd Zywicki, Dodd-Frank and the Return of the Loan Shark [six) RBI prescribes enhanced safety norms for checks- Indian bank org 7)Reserve Bank of India CTS 2010 Typical for cheque types – specifications About CTS North America CTS Group is a technologies organization focused on the improvement, production and assistance of banking options. CTS has worldwide coverage with far more than 1 million banking peripherals installed across 5 continents, a established track record in main worldwide monetary institutions, and partnerships with the most prestigious answer providers. CTS delivers a wide variety of goods for banking and monetary applications involving document imaging, money handling systems, card personalization and self-service modules.
The CTS LS150 has the smallest footprint / throughput ratio on the industry these days. Its speedy and quiet efficiency, coupled with its sleek style and exceptional options make it the superior option for teller, branch, and higher volume remote deposit capture applications. The CTS SB50E is a module created for integration in a self-service kiosk. The SB50E is a robust scanner created particularly for difficult self-service applications. The SB50E accepts ID cards and creates higher-resolution colour pictures made use of electroinc exchange, archive, and authentication. About the Author: Urs Bockli is an international promoting practitioner, with more than 30 years of knowledge operating for multinational Fortune 500 providers in Europe and in the United States. He has held a quantity of sales and promoting positions which includes Plan Advertising Manager, Director of Sales Europe/Africa, Strategic Preparing, and Division Director of Advertising. Urs is also a element-time Lecturer at the University of Michigan (Dearborn) College of Enterprise. Urs is the EVP and GM of CTS North America, Inc., the US subsidiary of CTS Electronics SpA. In this position, Urs is driving CTS’ technique to come to be the major vendor for verify scanning and money options in North America. Mr. Bockli has a degree of Betriebsoekonom (Corporate Economist) from the Zurich College of Sophisticated Economics and Enterprise Administration, and is a Certified Computing Specialist and Specialist Certified Marketer.