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Five business cases of banking with document validation as a main concept

Bureaucracy is a curious two-way street: just as it is necessary for the proper functioning of the public sector and of many (or all) of companies, its also a nuisance for the users and for the employees which have to manage it. Handling tens of thousands of documents every day, as the bank does without going any further, is a process with no added value in itself which supposes a real cost in time and resources for the institutions themselves.

By: Alberto Iglesias Fraga, journalist specialized in digital economy.

For clients, having to give in their documents and waiting for these to verified by a human agent means, likewise, a huge waste of hours which can cause them, in many cases, to chose another institution or abandon the contracting process they had initiated.

Due to this, in recent years, many electronic document validation solutions have appeared as an alternative. These allow many of these processes to be automated, transmitting information in a better way and enabling us to respond to the needs of consumers practically in real time.

But, how exactly do these technological advantages translate into real business cases? What are the most immediate applications of document validation in the context of the current digital transformation in the banking sector? There are five clear situations where we can see the real impact of such solutions, like Addalia’s Iddiligence:

Account registration (Digital onboarding)

The first and most important procedure to operate with a bank is to open an account with them. This process requires, by law, that we identify ourselves correctly and show that we are same person whose name will appear as the account holder. Up until now, this was solved by handing over our ID card, passport or foreigners document in person at the banks office for subsequent examination carried out by the person responsible for the company.

However, consumers increasingly demand agility in this process and banks which offer the possibility to open an account online, without the need of going to a physical office to carry out the procedure, are proliferating. In these cases, the solution includes validating the information contained in these documents electronically. Systems such as Iddiligence automate the examination of the data which appears on our ID cards and validates it with the rest of documents we have submitted or the information the institution may have. In this way, a lot of previous work needed for the operator to be able to give the final ok is avoided, and a response can be given much faster so the client can begin to use the institution’s services.

Personalized services (KYC, Know your customer)

Validating documents at a bank is not only useful to comply with the legal requirements the regulator establishes, it can also offer important benefits for the financial institution and for the consumer. In this way, the examination and validation of any additional information the user may provide (such as payslips, receipts, etc) give the bank a great deal of knowledge about the customer and their consumption habits.

This information, in many cases not required unless necessary due to how tedious processing it is, allows us to personalize the banking services offered to each consumer, adding new commercial proposals suitable to each individual and thus maximizing the company’s profits.


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Credit rating and risks

These same documents (in regard to payslips, unemployment benefits, pensions, bills and receipts) are also very useful when it comes to knowing each individual’s risk profile. Like this, based on their consumption patterns and their income and expenditure, we can establish a complete view of the persons financial situation and, in this way, adjust potential offerings of more or less attractive products (and with their consequent higher or lower risk level), as well as adjusting more precisely the financial margins they can gain access to.

Loans and mortgages

The previous use case reaches its highest extent – when referring to consumer lending or mortgages – when those documents form part of the previous analysis carried out to concede the loan.

As opposed to the physical delivery of hundreds of documents and their subsequent validation carried out by a bank operator, the electronic systems of document validation allow us to expedite the process so that all the information is sent telematically, meaning that the agent only has to check if the data allows to grant the mortgage and give the final go-ahead.

Money laundering and fraud

We can’t forget something that underlies all the previous cases: the compliance with regulations on the prevention of money laundering. In this way, document validation systems such as Addalia’s Iddiligence respond to the requirements established for remote client identification set out by SEPBLAC (the Anti-Money Laundering Supervisory Authority).

Just as we fight against money laundering, we also fight against contract fraud. By ensuring the users’ identity and financial capacity the system gives us a higher level of trust than the simple manual verification, preventing them from pulling wool over our eyes and reducing the risk level for financial institutions.

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Addalia provides the only technology for collecting and administrating documents via images for critical business processes. Our software offers secure and efficient automated solutions, it is flexible and modular and can be deployed in a standard or cloud-based form. As an end-to-end application or a solution for integrators, Addalia’s software has infinite possibilities, such as:

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