AI-enabled identity proofing technology holds key
Traditional attitudes to vehicle ownership and usage are changing in the UK, and suppliers looking for tech solutions to enable efficient identity proofing in their mobility pipeline could benefit greatly from seeing how their counterparts on the Continent are managing, says Benjamin Haas, Senior Director EMEA Financial Industry, IDnow.
In recent times, a mixture of environmental and economic factors have combined to create a ‘perfect storm’ for the UK’s mobility sector.
Tight consumer budgets, the after-effects of Covid-19 and a growing interest in EVs have contributed to growth in vehicles that are not owned by individuals, with the British Vehicle Rental and Leasing Association (BVRLA), showing an increase in fleet size for the first time in three years, up by 2.8% year-on-year.
Meanwhile, consumer priorities are changing and car ownership is no longer as high on the agenda as it once was. Instead, leasing is becoming increasingly popular as customers look for more cost-effective ways to drive newer and more environmentally friendly vehicles.
In 2021, more than 1.6 million cars in the UK were leased, which represented an increase in the market of 28% from November 2020 to November 2021, according to figures from the Finance & Leasing Association.
However, this decrease in ownership doesn’t mean there are fewer cars on the road, far from it, at the end of June 2021 there were 39.2 million cars on the highways and byways of the UK, up from 38.4 million at the same time in 2020.
The ever-increasing number of car leasing and rental applications brings with it a major administrative burden for auto leasing companies. Staff numbers in locations where rentals need to be verified, such as airports and hotels, are already lower than they were in pre-pandemic times, and the reduced numbers are now at risk of being swamped by complex paperwork. One solution to this challenge comes from tourist destinations, such as Spain, that cope with an influx of visitors looking to hire cars as they take their annual holidays.
Research by the Spanish Association of Vehicle Renting (AER) indicates that in April 2022, Spain recorded 68,336 vehicle registrations, equivalent to an investment of €1,489 million.
With such a buoyant market, what are leasing and rental companies doing in Spain to ensure efficient and secure processing of their clients? The simple answer is that they’re using contactless, remote identity-proofing processes, which speed up the administrative task of getting drivers behind the wheel as soon as possible. It’s a setup that is reaping rewards if the AER’s figures are anything to go by.
UK providers looking to replicate this success and to capitalise on the growing car rental market should consider using the same technology used in successful European registration processes.
A number of European tech providers specialise in identity proofing with commitments towards digital identities and document signatures, which means processes are streamlined for end users and service providers.
There’s no reason why the process for registering to drive a car in Spain that you don’t actually own should be fundamentally different to doing the same in the UK.
Still, vehicle leasing is just one way the mobility landscape in the UK is evolving. Other changes involve short-term car clubs, carpooling and micro-mobility schemes in cities where fuel is expensive, roads are crowded and parking is scarce.
The number of users renting cars for short periods in Europe, as a whole, is expected to increase by 11% from its 2021 baseline by 2026 as the landscape continues to shift, according to a recent business intelligence report.
The various ways to access mobility require proof that the end user is who they say they are. Similarly, consumers are demanding that the verification process is smooth and trouble-free.
Artificial Intelligence (AI) allows users to complete the necessary formalities of renting a vehicle remotely without going through face-to-face procedures, achieved, in many instances, via Qualified Electronic Signature (QES) technology.
The new landscape represents both a challenge and an opportunity. The industry itself must remain flexible: those service providers who identify trends quickly and act accordingly will have a distinct advantage. New technologies, such as AI-assisted identity verification, enable optimised processes and ensure maximum ease of use, while at the same time still meeting all Know Your Customer (KYC) requirements.