There’s more to a transaction than the simple exchange of goods or services for money. Each is a relationship – an engagement that involves the sharing and exchanging of trust, value, and in some cases, data. That’s part of the reason why it’s so vital to verify customer identities at the onset of a relationship.
Much of it is simply good business practice, but a huge driver is being able to meet regulatory obligations without jeopardizing the customer experience. Businesses worldwide are required to satisfy both Anti-Money Laundering (AML) and Know Your Customer (KYC) rules to detect and prevent money laundering, terrorist funding, or the siphoning of any proceeds of crime. In a digitally connected and data-driven world where countless numbers of transactions are happening every second, staying compliant with these rules is an enormous challenge for businesses.
There's also a great challenge for regulators – keeping pace with change. Technology is accelerating at full speed, causing major shifts in consumer behavior. Verifying identities online remains critical, but if regulatory processes cannot keep up, they run the risk of being ineffective or impeding transactions. With a better grasp of the technology and data available today and tomorrow, regulators and policy makers can collaborate with public and private sectors to create more effective rules and guidelines that will enable innovation while protecting citizens and businesses.
Fortunately, things are improving and identity is moving more and more from the physical to the digital. While businesses endeavor to safeguard against fraud and other nefarious activities, one of their most important business tools is there to help in the fight: data.
Identity in transition
In the past, verifying a customer or business account was a time consuming and high-touch transaction. What this translates to is meeting customers in-person at physical storefronts, manually verifying documents, requesting third-party notarizations or being trained on authenticating various types of identification documents. With much room for human error, this traditional method of verification is slow, inefficient, and expensive.
The method described worked sufficiently for accounts that were created in-person. But that was at a time when signing up or checking out happened in a store, a branch office or across a desk. How does that work when the store is online, the branch is a mobile app, and the transaction is happening across great distances? It isn’t easy to verify a physical identity or document through a website or smartphone.
Add to that challenge the demands of today’s customers. They have a new expectation for expedience and instant gratification. If they don’t get it when and how they want it, they’ll go elsewhere quickly. They’re not going to wait for you to verify their identity through traditional methods.
What about a digital process for verifying identities? In order to provide services to today’s digitally savvy customers, businesses need to have automated processes hastened and facilitated by technology. All around the world, businesses are integrating eKYC solutions to meet the customer’s need for instant fulfilment as well as the business’ requirement to comply with a multitude of regulations.
This is proof positive that as technology powers a faster-moving world – from communications to eCommerce – it is also being used to power better identity verification workflows.
Data driven identity
The core of today’s digital technology is data. Reliable, standardized and transparent, data powers so much of the world. From our interactions on social media to daily business decisions, from connecting with loved ones to conducting complex transactions, data streams through nearly every part of our modern world. And each and every one of us leaves a digital trail and a data-packed identity.
For some, it can be off-putting, perhaps even frightening. But in the grand scheme, data is vital and can used to better our lives. One area where this can be achieved is in the identity verification space.
Whether it’s a bar code in a state-issued ID card, the mobile number you use to receive a one-time password (OTP) to authenticate your identity, or the thumbprint you use to open that very mobile device, data is already being employed to serve your needs. An authentication code, a biometric data point, your date of birth – each piece connects back to you, verifying your identity to others and showing them that you are the person you say you are. In the end, data does not serve itself – it serves people.
The Human Touch
Human beings are remarkable creatures. We built the pyramids and landed on the Moon and then after that we created the internet and made smartphones – with all the sites and apps that go with them. Our technology is powered and connected by both data and people alike.
In the past few decades, technology has advanced exponentially and our desires, uses, expectations and behaviors have moved along in pace with it. For business, one of the most profound differences between the past and the present – with more expected in the future – has been the significant change in consumer behavior. Interactions and engagements, decisions and purchases that traditionally happened in a store, office, or other place of commerce are now happening more and more online or through a mobile device.
With digital technology enabling greater access and ease for consumers, people can open accounts, browse, shop and buy from virtually anywhere at any time – whether from a laptop, tablet, phone or wherever else they can get online. But before they can do any of that successfully, they need to be identified and verified so that their purchases and transactions are authenticated and proven to be secure from fraud or other nefarious activities. Data is helping to speed that up and make the process as frictionless as possible – less friction makes for happier customers and better business.
Another area where data is helping to connect with and verify people and truly have an impact on lives is in the realm of those either undocumented or underserved via traditional methods. Not everyone has a passport, driving license, credit history or bank account. Yet billions have a digital footprint and a mobile device – proof in pixels and data that they exist and are reliable customers, if not necessarily in a traditional way. Access to mobile data to verify and authenticate thin-file customers and the underbanked has profound impact on their lives and the lives of their families. With verifiable identities they can gain access to vital services from governments to finance institutions, which can help lift them out of poverty.
Data: A Gateway to Global Identity Verification
There are thousands of data sources worldwide that can help to verify individuals and businesses. Government databases, credit bureaus, and business registries are just a few of the more traditional ones, but newer sources such as mobile network operators, biometrics, social media, mobile apps and Internet of Things (IoT) offer a new set of data to help complete the picture and identify and verify more people from around the world.
By curating reliable and trustworthy data sources and proven technologies for identity verification, the digital world becomes a safer place for consumers to access goods and services from anywhere at any time. With a more robust set of data and all of those nodes connecting to both the newer and the more established sets of data, businesses can know exactly who they’re doing business with, meeting AML and KYC obligations as well as mitigating their risk of fraud or other illicit activities that can inflict financial or reputational damage.
For any business, customer information is a highly prized asset – but it can also be used to help customers get verified online and get more value from their digital lives.
Seeking Data Driven Solutions
Data powers so much of our modern world. It helps with understanding our needs and behaviors, with driving decisions for business or social policy, with defining and expressing new innovation and, increasingly so, for proving individual identities – helping to empower more people to do more by gaining fair and fast access to vital services both online and in the real world. With each individual’s identity imprinted into data, it has an ever-growing importance for proving and verifying who they are – as well as helping to protect all us from harmful, dangerous or criminal activities.
Data, identity, innovation and technology are all coming together to make that possible. Trulioo is one example of that.
As a trusted leader in global identity and business verification, the company’s RegTech marketplace offers secure access to global data sources and identity authentication solutions to help meet compliance obligations and reduce the risk of fraud and financial crime.
From traditional data sources of government, credit bureaus, and financial institutions to the new and exciting frontiers of data available from mobile apps and devices, and other data-powered digital gadgets with biometric capabilities, there is a virtual gold mine of opportunity available. Using that data to identify, verify, and authenticate identities online helps to build a framework of trust online and on mobile. And that presents an even greater opportunity to not only help businesses meet their regulatory needs but to help people gain access to the services they need.