State-run retirement funds management Taspen uses biometrics software for face recognition application to identify clients as seen in this Feb. 3, 2020 photo in Medan, North Sumatra. The technology helps the company prove that the recipients of the pension benefits are live persons, thus minimizing frauds. (Antara Photo/Septianda Perdana)

Biometrics Solution: Know Your Clients Without Meeting Them in Person


MARCH 27, 2020

Jakarta. Financing and lending companies may need to turn to biometrics when selecting clients for a solid footing as authorities have relaxed certain regulations amid the Covid-19 pandemic that puts a brake on businesses.

As positive Covid-19 cases hit the 1,000 mark for the first time in Indonesia on Friday, the virus outbreak has taken a major toll on the national financial services sector. The pneumonia-like disease has affected debtors' performance in paying off their loans and caused businesses to suffer from a plunge in profits.

Because of this, the Financial Services Authority or OJK has relaxed the lenders' bad requirements and even asked them to temporary halt debt collections to keep local businesses afloat during the pandemic.

Under these circumstances, financing companies are becoming more selective in choosing their clients to keep non-performing loans to a minimum and avoid mass layoffs.


With physical distancing in effect, the client onboarding processes are also forced to take a digital turn.

"Unfortunately, working from home can be a nightmare for financial service providers that are far from being ready to fully operate online," Robert Rompas, commissioner of biometric service provider company Asli Rancangan Indonesia (ASLI RI), said in Jakarta on Thursday.

Other problems may also arise with these less tech-savvy companies becoming an easy target for loan application fraud.

With this in mind, ASLI RI launched a digital onboarding app that relies on a two-minute biometric verification.

The FIDO2-server certified app first requires the client to upload their identity card for an optical character recognition (OCR) - a feature that scans text on an image.

The client is then asked to upload a selfie which will undergo a test. This biometrics detection determines whether the person on screen is a living person and not a stolen face photo.

Lastly, the system will automatically compare the biometrics data of both the ID and selfie with the government's database. 

With secure biometric processes that comply with the OJK protocols, financing companies can be more resilient during the pandemic, Robert said.