The evolution of identity verification in the modern economy
Identity verification has made considerable strides in recent years as it continues to evolve alongside the modern economy. From loan applications to opening bank accounts, cryptocurrency trading and more, identity verification plays a pivotal role in building trust among businesses and their customers.
Identity verification is an essential requirement in most processes today, both online and offline. With blue ocean opportunities on the horizon as technology, risks and threats continue to evolve, it’s easy to overlook the magnitude of influence identity verification has in our daily interactions.
As we continue to set our sights on emerging opportunities, here are the top 10 reasons financial institutions need to evolve with identity verification.
1. Identity is always changing
Prior to the mass adoption of technology and the digital lifestyle, impersonation was conducted through physical means, such as a stolen wallet or identification card. As such, the main unique identifiers at the time mostly focused on name, address, date of birth and social security.
With the transformation of digital fraud, identity theft requires a more sophisticated plan to pull off successfully. To prevent this, data networks continue to become more robust and now include unique identifiers for credit data, email, phone numbers, government-issued ID numbers and more.
- Advancements in biometrics
From the first state-wide automated palmprint database in 2004 to Apple including fingerprint scanners in smartphones in 2013, biometrics continues to be a buzzword in the identity verification industry. As the latest development in identity verification, biometrics offers the ability to verify users through geolocation, fingerprints, or facial recognition.
Backed by an unbeatable level of security when it comes to mitigating identity theft, it should come as no surprise that forward-thinking businesses are looking to implement this feature as part of their onboarding services.
3. Increases in identity theft
As data breaches and cyberattacks continue to rise year over year, there’s a constant threat of fraud and identity risk. With financial firms being 300 times more likely to be a target than other institutions, customers need to be able to trust that the organisations they’re doing business with are ensuring that their personal identifiable information (PII) will be protected.
- Consumer-centric approach to identity verification
With the introduction of digital banks and financial services, consumers are no longer restricted to the services that are available in their neighbourhoods. With more competition and options to choose from, consumers can afford to be selective as they become more security-conscious and look for frictionless onboarding processes with improved protection.
Previously seen as a pain point in the user experience, financial institutions are beginning to embrace their identity verification process to apply a more consumer-centric strategy. This can yield favourable results as businesses can achieve reduced friction and increased security while fostering better customer relationships.
- Digital account creation abandonment
Based on recent research from Deloitte, it was revealed that at least 38 per cent of customers drop out of the onboarding process, often as a result of frustration with the sheer volume of touchpoints and paperwork involved.
With a much-needed balance between attracting, retaining and growing customers, financial institutions should be looking to leverage passive and active security features to help facilitate frictionless and secure onboarding.
6. Multi-layered approach to authentication for heightened security
To help stop criminals in their tracks, multi-factor authentication provides a layered defence to make unauthorised access of accounts, data and devices more difficult. For financial institutions, this requires the ability to access extensive data sources that are fast, reliable and accurate.
7. Access to more reliable data sources
As the most important factor in regulatory compliance and risk mitigation, identity verification is only as reliable as the data sources behind it. Fortunately, through partnerships with organisations like Trulioo, financial institutions can have access to more data sources than ever before with 400 data sources for more than 80 countries and access to active mobile network operator data.
8. Continued increases in digital growth
With more than 14 billion active mobile devices worldwide, more people than ever before have the potential to access the digital economy. As digital services continue to evolve and expand, digital identities are crucial in creating fairness, transparency, and trust. However, they will first need to be established to be granted access.
- More users requires efficient processes
Aspects of identification and verification may be ever-changing but financial institutions must consider streamlining their processes to keep up with the changing times. This kind of responsiveness will allow financial institutions to properly scale their operations while mitigating emerging threats and risks and remaining compliant with evolving regulations and compliance requirements.
- Minimise resource strain with one-stop verification solutions
As technology improves, regulations evolve and customers want better service, financial institutions need to leverage verification services that will fit their business needs now and in the future. By using solutions to automate efficiencies, organisations can adopt a customisable and strategic approach to identity verification that will help reduce costs over time and offer a better experience to customers.
Put your best foot forward with your identity verification solution
Identity verification technology holds the key to helping financial institutions onboard customers in an efficient and safe manner. By leveraging the latest in today’s technology, organisations can ensure they remain compliant and onboard quickly while reducing fraud. In turn, this forward-thinking approach will build customer loyalty through a good first impression that makes them feel safe and secure.