Patelco Credit Union in San Francisco made the switch from a manual ID verification process for its online account originations to an automated system last year.
The new system, provided by IDology Inc., allows members to open up online accounts immediately instead of the usual one-day waiting period and eliminates the need for faxing sensitive information by asking members a series of personal questions queried from public records.
Anthony Vitale, director of development at Patelco, said that prior to the new technology Patelco employees screened members by their Social Security number and date of birth; members faxed two forms of identification and then employees examined each application and questioned the person if there were any red flags. Typically, Vitale said they get thousands of applications a month.
"It helps to really narrow down the riskier applications. If a member fails the IDology questions, we can see exactly what questions they got wrong and put more time behind finding out exactly who that person is," Vitale said.
Using the manual method, Patelco front-line employees had to devote time to handle the faxing and verification process. Now, Vitale said, they can focus more on cross selling.
IDology CEO John Dancu said that the IDology questions are designed to be consumer friendly so that the real person won't have trouble answering them, but at the same time fraudsters won't know the answers to the questions.
Vitale provided asking a member the name of their brother-in-law or first husband as examples.
The verification product also has a data location device that makes sure the member is where they say they are by IP address.
Connexus Credit Union in Wausau, Wis., also recently launched an automated online enrollment process through PM Systems Corporation.
Prior to the new system, Connexus employees were performing a manual process similar to Patelco. Members would fill out a form online and then employees would have to re-enter the information into the credit union's core system, get driver's licenses faxed from members, and manually go through applications.
Now, the new system automatically enters the member's information into the credit union's core system and members' accounts are active immediately after they finish the five-minute verification process.
"When people apply for something online they expect an immediate response and for the information to be there immediately," explained Jackie Edwards, business development manager at
Connexus, as to why the credit union decided to make the change.
Connexus employees in the central processing department were responsible for the manual verification process, but now, Edwards said, they can focus more on ACHs and other internal processes.
By streamlining the process and reducing the manual time needed to verify accounts, Edwards said the credit union has realized a 50-75% cost savings.
Once a quarter the credit union sends out an e-mail that prompts hundreds of applications for online accounts. Typically, Edwards said they had a three- to four-day back-up. After implementing the new process, the credit union was able to recover in one to two days.
Connexus' automated process, similar to Patelco's, asks members a series of personal questions. Edwards agreed that having that process in place, instead of manually having to process applications, has made it more secure because employees can focus more attention on the members that fail the question test.