Autonomous NEXT whitepaper finds lenders deploying AI-powered identity verification could reduce Know
Your Customer and Anti-money Laundering costs by up to 70%, and improve speed by 80%
SAN DIEGO and LONDON, Nov. 19, 2018 (GLOBE NEWSWIRE) -- A whitepaper released today by Mitek (NASDAQ: MITK), authored by Fintech research practice Autonomous NEXT found that the opportunity is
ripe for digital lenders to grow – if they continue to invest in digitisation.
The whitepaper, entitled ‘European Digital Lenders: How operating efficiency is
helping digital lenders attack a $150 billion annual origination market across the Eurozone in 2018’, looked into the state of the digital lending market in Europe. It found that while European digital lenders are
growing quickly, digital share is still low relative to the addressable market opportunity. Efficient onboarding and servicing
using digitized workflows, such as digital identity verification technology, are being used by both new entrants and incumbents to
boost competitiveness – ensuring regulatory compliance, improving speed, and reducing the cost of customer onboarding.
“The digital lending sector has grown dramatically in the last few years and is a great example of how
technology can democratize access to financial services. But banks still dominate lending, and digital-first lenders are struggling
to provide loans on better terms than their traditional rivals given high cost of capital, said Lex Sokolin, Global Director
Fintech Strategy at Autonomous NEXT. On the state of the market, Lex adds: “Our report found that venture capital investment is
still flowing into the space and is set to hit $800m in Europe. The UK alone has originations of over $6bn, and Europe-wide, the
addressable market is $150bn – with current digital lender revenues estimated at $400m. Moreover, the market shows impressive
originations growth, with a 60% CAGR since 2013.”
The report found that onboarding times have been drastically reduced in the digital world – from six weeks to a
matter of minutes – but acquisition costs remain at $300 per customer. A KYC and AML check could cost as much as $150 per customer
when fully loaded for bank cost. Additionally, the cost of their capital is preventing digital lenders from competing with
incumbent banks on price – but this cost isn’t likely to be reduced anytime soon.
However, it’s not all doom and gloom: digital lenders should harness their lower operating costs to their
advantage. Reducing costs is paramount if digital lenders are to offer a real alternative to traditional banking providers. Where
digital lenders must also play catch up is with security – and digital identity verification has the potential to be the tool to
make this happen.
“For digital lenders, mandatory KYC and AML checks are still largely manual, building delays and inefficiencies
into the onboarding and vetting process,” said Rene Hendrikse, EMEA MD at Mitek. “The solution is investing in digital identity
verification, powered by AI technologies, which provides an opportunity to massively enhance the efficiency of the onboarding
process in terms of both speed and cost reduction. In fact, the report found that digital IDV solutions can help reduce KYC and AML
costs by up to 70% – and could potentially improve the speed of these checks by 80%.”
“Fintechs and digital lenders in particular need to ward off inefficiency and drive the best possible customer
experience,” adds Hendrikse. “Identity verification technology could give digital lenders the competitive edge they need, and may
help them take market share away from traditional lenders.”
About Mitek
Mitek (NASDAQ: MITK) is a global leader in mobile capture and digital identity verification solutions built on the latest
advancements in AI and machine learning. Mitek’s identity verification solutions enable an enterprise to verify a user’s identity
during a digital transaction, which assists financial institutions, payments companies and other businesses operating in highly
regulated markets in mitigating financial risk and meeting regulatory requirements while increasing revenue from digital channels.
Mitek also reduces the friction in the users’ experience with advanced data prefill and automation of the onboarding process.
Mitek’s innovative solutions are embedded into the apps of more than 6,100 organizations and used by more than 80 million consumers
for mobile check deposit, new account opening and more. Learn more at www.miteksystems.com.
Follow Mitek on LinkedIn: http://www.linkedin.com/company/mitek-systems-inc
Follow Mitek on Twitter: @miteksystems
Connect with Mitek on Facebook: http://www.facebook.com/MitekSystems
See Mitek on YouTube: http://www.youtube.com/miteksystems
Read Mitek’s latest blog post: http://www.miteksystems.com/blog
Mitek Contact:
Gemma Sowerby or Catriona MacLeod
LEWIS Global Communications
0207 802 2626
MitekUK@teamlewis.com
About Autonomous
Founded in 2009, Autonomous Research has distinguished itself with in-depth, unbiased investment research on global banks, brokers,
asset managers, insurance, information services, payment-technology, mortgage finance and consumer finance companies. Autonomous
NEXT, the Fintech practice within Autonomous Research LLP, explores the impact of technology on the future of finance. Autonomous
services are not suitable for Retail investors; for disclaimer see www.autonomous.com/legal. For press, email gwoods@autonomous.com
