Identity verification is a new and thriving industry. The field is rapidly evolving as tools become increasingly sophisticated and the regulations that drive its usage become more rigorous. In fact, we’re at a crucial point in the industry’s development. To get a better understanding of where it was and where it’s going, OWI and Trulioo hosted a roundtable, which resulted in a white paper, The Evolution of Identity Verification in the Marketplace. Roundtable topics included:
- How fraud prevention efforts have evolved
- Where major consumer concerns lie
- Methods companies have taken to build digital identities
Tools and rules for flexible and innovative solutions
The digital economy, as we know it, didn’t exist 25 years ago. As it continues to develop, all the requirements, standards and systems to help ensure safe, secure and fair digital transactions need to be adjusted and modified. New complexities around digital privacy and the proper use of data have arisen. Add to that the multiple jurisdictions and various regulations that global companies must deal with and it’s no wonder that compliance teams are often overburdened.
The white paper notes:
The inability to understand, track and ensure compliance across borders can lead a startup or growing company to plateau or fail.
As the compliance landscape changes quickly, creating programs that simply meet today’s minimum standards isn’t scalable. Instead, it’s about implementing flexible, adaptable systems. Having the ability to quickly add in new capabilities or adjust workflows based on jurisdiction, risk scenario, or other requirements creates speed and efficiencies that help improve business performance by:
- Optimizing customer experiences to improve onboarding rates
- Reducing the risk of compliance failure
- Decreasing fraudulent activity and losses
- Controlling compliance costs
Taking a proactive approach and developing tools and rules that provide flexibility for growth helps to build a company that can more quickly take advantage of opportunities and protects itself from unnecessary risk.
Mitigating fraud and identifying bad actors
In 2020, due to the pandemic, many consumers shifted to digital-only when it came to banking, purchasing, or healthcare, many for the first time. And many businesses didn’t have the sophisticated systems and procedures in place to effectively deal with bad actors, which dramatically increased fraudulent behavior. According to Arkose Labs, there were 4.4 billion fraud attacks worldwide in 2020 and 22.9% of all digital interactions were fraud attempts.
While people understand and appreciate the need for enhanced security measures, they’re equally unaccepting of slow and cumbersome onboarding processes. Onboarding is the “moment of truth,” where someone might become a lifetime customer or turn to another provider, based on the experience they have. A Trulioo online account opening study found that 77% of people surveyed said the account opening process can “make or break” their future relationship with a brand.
In other situations, a prospective customer doesn’t have the necessary data for a traditional identity verification to be completed. These so-called “thin-file” people might be young consumers without credit files, or new residents in a particular country, but could still be valuable customers. Implementing onboarding systems that can quickly and accurately distinguish between good thin-file customers and fraudsters simultaneously increases revenue while decreasing losses.
The need for positive friction
Effective identity verification isn’t only about having sound systems and effective back-end processes. Understanding the customer and what they want and delivering on those needs is essential.
Unfortunately, what the customer wants isn’t readily apparent when it comes to complex privacy and digital identity issues. They might desire privacy in theory, but share details online for the whole world to see. They click consent buttons but get upset when they get a bunch of emails. They want anonymity but enjoy the benefits of digital personalization.
Onboarding isn’t just a technical function. It involves informing the customer about why they need the data and what they’re doing with it. It’s about adjusting the experience based on the type of customer and where they are in the journey. It’s about having the right balance of speed and security for the situation, not a one-size-fits-all approach.
Identity verification, when supported with responsive technologies and deep, accurate data sets, enables a seamless experience that doesn’t feel like a burden to the customer. Friction during onboarding is reduced, resulting in the customer carrying on with their journey. A clear and simple online buying experience builds trust with your customers, strengthens your brand and is a key driver for ongoing success.
Download The Evolution of Identity Verification in the Marketplace
Learn how effective identity verification can help navigate shifting global compliance demands, defend against fraud and other increasing threats and build trust with your customers.