Knowing your customer means protecting their data
As the self storage industry continues to modernise, one of the most significant shifts has been in the way facilities manage customer information. Traditionally the domain of banks and high-risk sectors like financial services, Know Your Customer and Customer Due Diligence processes are now gaining momentum across the self storage sector.
Know your customers
In its most basic form, Know Your Customer processes, or KYC, are a way of identifying the people that walk through your door – Confirming the identity of your customers against official documents helps ensure a person is who they say they are.
The SSAA recommends that storers are always adequately identified before signing a self storage agreement. Facilities may consider a range of identity verification methods based on their level of comfort, and risk for storing and retaining personal information.
Alistair McKeough, Co-founder of VerifiMe, said as facilities become more automated, the way your business approaches verification becomes even more important.
“Self storage facilities are increasingly leveraging new technology solutions to handle the collection, identification and validation of client identity documents during onboarding,” Alistair said.
“The benefits of implementing proper identity checks go far beyond compliance, and there are enormous advantages to self storage businesses understanding who their customers are.”
Creating a safer facility
As well as allowing businesses to better profile their customers, KYC and CDD processes allow facilities to dramatically lower the risk of criminal enterprises operating on their premises.
Customer Due Diligence, or CDD, is the process of assessing the risk a customer might pose to your business. It goes beyond just checking their ID and involves understanding who they are, whether they pose any legal or financial risk, and making sure they’re not involved in suspicious or illegal activity.
Self storage facilities are particularly vulnerable to misuse, and without adequate safeguards can be havens for the storage of illicit goods, illegal dumping, unauthorised occupancy, arson or even assault.
Alistair said that even very basic KYC and CDD processes have been shown to significantly reduce these risks and can be a frontline defence for your business.
“Understanding who your customers are can create a safer environment by protecting staff, deterring criminal activity, and maintaining trust with legitimate clients, who can be confident about storing their goods with you,” Alistair said.
“The moment you introduce ID checks, you signal that your business is not a soft target,” he explains. “It acts as a powerful deterrent for anyone considering misusing your facility.”
Storing sensitive data
Data breaches are a growing risk for Australian businesses and the impacts of a data breach can be devastating reputationally.
In 2023 the AIC reported more than 200,000 cases of identity theft. As facilities take on the responsibility of collecting and managing personal identification documents, they also face the escalating challenge of data protection. With cybercrime on the rise and public trust in data security declining, mishandling customer data can have devastating consequences.
Along with reputational risk, the costs of responding to data breaches were extensive, and difficult to accurately estimate. The prominent Optus data breach in 2022, for example, cost Optus $140 million in related costs.
Alistair explained that while most identity verification software solutions were expensive and difficult to build, new providers were emerging that were cheaper and simpler to implement – some can be set-up in 24 hours, without any requirement for technical integration.
VerifiMe has been working closely with the self service industry to develop a tailored solution for operators.
“We wanted to create a purpose-built platform that was cheap, easy to use and could be adopted without any tech build,” Alistair said.
“Creating a solution that was convenient and provided the smoothest onboarding experience for customers was also key.
“We can now offer the self storage industry an end-to-end customised KYC platform, that can handle the collection, validation and off-site storage of customer identity and sensitive information. And unlike other software providers, all data collected by VerifiMe remains onshore in Australia.”
Increased regulation and obligations
The Australian Government is expanding reforms to its Anti-Money Laundering and Counter-Terrorism Financing Framework, which will require many non-financial sectors that were previously exempt, to implement robust CDD processes. While the self storage industry is not currently required to implement these changes, having a robust CDD process in place is considered best practice.
Alistair said VerifiMe was assisting several self storage businesses to develop rigorous CDD processes that aligned with the Government’s increasing focus on KYC and CDD compliance across non-financial sectors.
‘We’re seeing many players in the industry take proactive steps to stay-ahead and also act in preparedness for any future changes or reform,” he said.
SSAA guidelines
The SSAA recommends members think strategically about balancing business risk and information security risk when considering the role of identity verification in their business.
Members can choose to use a third party identification verification provider such as VerifiMe and AplyID to verify identification documents against government sources. In most instances, when an organisation uses a third party identify verification platform, identification details are not retained by the facility, which protects customer privacy.
For more detailed information on how to best manage ID Verification, and the secure storage of personal data in your business, download the SSAA Cyber Security Guidelines available in the Member Portal.
