Crypto businesses can reassure wary customers by showing them security is a top priority through identity verification, according to recent research from Trulioo.

The “Crypto customers call for reassurance in uncertain times” industry report found consumers now regard identity verification checks as vital and reassuring steps, rather than an inconvenience. They want those reassurances during onboarding and throughout their relationship with crypto exchanges.

Economic uncertainty, geopolitical unrest, and emerging online fraud and identity theft threats have left consumers more cautious. They still expect speed and convenience, but the balance tips more toward security.

Creating certainty in uncertain times

While 75% of crypto users say they’re on higher alert when dealing with companies online, they are putting the onus for their security on companies. Among crypto users, 83% said those businesses should be doing more to reassure and protect consumers.

Identity verification can provide those reassurances, and 78% of crypto users said they’re more comfortable with the process taking longer or involving more steps. The majority of crypto leaders are hearing that message, with 82% pointing to identity verification as a way to create some level of certainty for consumers at a time of growing uncertainty.

But there’s still work to do. The research found that 98% of crypto leaders report at least one way in which their identity verification approach is threatening customer trust. Some of the threats include:

  • An approach that’s too onerous and fractures the customer experience
  • Lack of agility and not keeping up with emerging security threats and fraud risks
  • Business silos and fragmented verification that leave potential security holes
  • Lack of communication and transparency about data collection

Building trust requires more agile and resilient onboarding and identity verification, according to 79% of crypto leaders.

But defending against fraud and risk goes beyond account opening, including for activity authenticity, anomaly detection, continuous watchlist monitoring, online behavioral analysis and monitoring high-value transactions. Overall, 87% of crypto leaders said identity verification needs to be seen as a continuous process throughout the customer journey, rather than something that occurs only during account creation.

Appealing to mainstream consumers

The next generation of crypto customers likely will be more mainstream, which will amplify the need for education, convenient processes and strong security. While early adopters might be fine with complex technology, average consumers want familiar processes they trust.

Consumers understand and accept identity verification. When people who use crypto exchanges encounter identity verification, 83% say it increases their trust in the brand, and 73% say it increases their trust in the industry.

Consumer trust ripples out from that instance of identity verification. There is a significant upside for crypto businesses that meet customer expectations for secure, smooth and empowering experiences.

Economic uncertainty, geopolitical turbulence, and emerging fraud and identity theft threats have left people more cautious when engaging with online payment providers.

Those companies recognize consumers value security through identity verification and are taking steps to meet those expectations, according to comprehensive, independent research Trulioo recently commissioned. The “Finding the payments sweet spot between security and speed” industry report highlights the results of that research into online payment service providers and the consumers who engage with them.

Prioritizing security in payments

It’s no surprise people want security when making payments. It’s equally expected they want fast, smooth experiences. The challenge facing payment companies is finding the right balance between the two.

The research indicates people have become more security conscious and expect some friction when transacting. Consumers no longer view identity verification as unnecessary or inconvenient. Rather, they see it as reassuring evidence that companies take security seriously.

People who use online payment services cited security as their biggest change in priorities when opening online accounts, with 62% saying validating identity and protecting against fraud and identity theft are more important than they were two to three years ago, according to the research. That lines up with the 79% of payment service provider respondents who said security is the top factor in building trust with customers through identity verification.

Top factors for payment service providers in building trust

Searching for agility, resilience in onboarding and identity verification

Payment service providers understand agility and resilience in identity verification can help them respond to shifting markets, emerging threats and changing consumer expectations. The following challenges topped the list of reasons why payments companies see a need for more agility and resilience:

  • Cost-of-living pressure prompting more focus on protecting customers
  • Evolving consumer needs and expectations
  • Increasing user volume
  • Turbulent economic conditions that increase financial pressure on the business
  • Competitive pressure
  • Building and maintaining trust when consumers are on high alert
  • Increasing or evolving cybercrime risks
  • Pressure to improve and accelerate customer onboarding
  • Cross-border expansion adding complexity to digital identity
  • Regulatory pressure and compliance requirements

Still, a gulf is emerging in the payments sector between organizations that have identity verification agility and those with rigid processes. Only 24% of organizations are able to anticipate market conditions and have the agility to revise identity verification accordingly.

Payments leaders also recognize the importance of ongoing identity verification. The research shows 86% of those leaders say identity verification needs to be continuous, rather than just a step during account creation.

Positive identity verification outlook for the payments industry

The payments industry is approaching the shifting consumer expectations from a position of strength, with higher consumer trust than many other sectors, including online retail, online marketplaces, government and social media.

When consumers encounter strong, balanced identity verification, their trust in the transaction, the digital service, the company offering the service, and the industry increases. Shifting to a more proactive approach to changing market conditions through agile identity verification can help payment service providers build on that customer trust and enhance business performance.

One bad actor can sow mistrust, commit fraud and damage an online marketplace’s reputation.

But how do marketplaces strike the balance between limiting risky accounts and avoiding heavy-handed security controls? People expect a welcoming online destination that delivers trust and safety, but they don’t want a cumbersome, time-consuming onboarding experience.

The right strategies and tools can help marketplaces meet customer expectations while controlling risk.

Know your audience

Understanding your audience is crucial in creating a strategy that minimizes risk and optimizes performance. What countries are your customers in? What is the average transaction price? How many transactions do vendors conduct?

Answering those questions and determining the associated risks are the first steps in deploying a risk-based approach (RBA). Financial services companies have long used RBAs to mitigate fraud, risk and financial crime. It’s a powerful model for online marketplaces to adopt.

It’s not one strategy, but rather a holistic approach that adapts risk controls to fit a given situation. For example, a vendor selling used home goods is not the same as someone selling expensive watches.

Key business strategies around acceptable use, terms and conditions, monitoring and enforcement, data protection, and operating procedures factor in to an RBA. But the approach offers flexibility for fine-tuning based on marketplace sector, customer or vendor. That refinement allows marketplaces to better match risk controls with the situation.

With the right technology stack, the RBA can adapt to the marketplace’s changing needs.

Creating a trusted platform

Marketplaces can create trusted platforms by applying tools that quickly share and analyze customer and vendor data. Through data analysis, patterns emerge that help uncover bad actors and highlight trusted parties.

Building trust in a marketplace starts during onboarding. Vetting customers and vendors at the start helps verify legitimacy before they engage with the platform.

Vetting might sound simple, but digitally verifying a person or business can be complex, especially with a global audience transacting in a borderless economy. Verification includes:

  • Determining the most effective data points and analyses
  • Integrating with different data, access requirements, system protocols, data use rules, information formats and other variables
  • Securing access to hundreds of data sources to verify identities online
  • Complying with privacy and data regulations, which require strict security protocols, differ around the world and change regularly

In the competitive marketplace environment, fast, low-friction vetting can provide a competitive edge. First impressions are crucial, and slow, complicated customer and vendor onboarding can lead to frustration and onboarding abandonment.

Building a robust, trusted global platform requires sophisticated data, technology and expertise to foster confidence for everyone. Identity verification that quickly, accurately and compliantly vets vendors and customers can play a significant role in marketplace success.

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