NEW YORK–The country’s biggest banks are working with a new ally in the fight against identity fraud: various states’ Department of Motor Vehicles.
Among the banks that have sought to link with databases at state DMVs and other government offices to ensure potential customers are who they say they are JPMorgan Chase & Co., Bank of America., Wells Fargo & Co. and Citigroup.
“Motor-vehicle departments are appealing partners for banks as more people are opening accounts online,” the Wall Street Journal reported. “At the Department of Motor Vehicles, applicants typically must appear in person, at least initially, with a stack of documents including birth certificates and social security cards that are verified by trained staffers.”
‘Could See Big Savings’
The Journal noted the biggest banks are also fighting an issue CUToday.info has documented: synthetic identity fraud. Most recently, Ann Davidson of Allied Solutions offered credit unions a checklist to follow to guard against synthetic ID fraud here.
“If banks can enlist DMV help, they could see big savings. Financial firms globally spent $6 billion on identity-verification technology in 2017, according to consultancy Aite Group, a sum that’s expected to grow to $10 billion by 2021,” the Journal reported.
Banks are working with technology vendors and other partners to coordinate their efforts across state lines, the Journal added.
“DMVs are the largest footprint for in-person identity proofing,” Matt Thompson, who was recently hired from Capital One Financial Corp. to work on new forms of identification and bank-DMV partnerships for IDEMIA USA, told the Journal. “We can build on that to create a trusted digital identity for people who want it to be known on the Internet that they’re not a dog.”
The DMVs’ Concern
Among the concerns banks have in potentially partnering with DMVs is privacy.
“Banks are wary of being caught up in debates about nationalizing state ID efforts,” the Journal said. “Some local officials, meanwhile, worry that states will be forced to bear responsibility—and potentially blame—for whatever consequences come from the use of licenses as bank identifiers.”
Iowa Department of Transportation Director Mark Lowe told the Journal he regularly talks to financial companies about identity applications.
“I can’t guarantee in 30 years we’ll be dealing with driving in the same way, but I have a very good sense we’ll be involved in identity management,” he said
The Banks Involved
A group of financial firms including JPMorgan, Wells Fargo and Bank of America earlier this year helped launch the Better Identity Coalition to push state and federal agencies to help them with identity verification, according to the Journal. The organization is meeting with officials around the country.
Banks also have stepped up their efforts to work with the Social Security Administration to check customer information, the Journal report stated. JPMorgan and Wells Fargo, among others, are working with the agency on ways to identify and cross-check customer information, such as whether a customer is deceased or is an active service member, when accounts are opened digitally, according to people familiar with the matter.