Trends in Identity Verification
Detecting stolen and synthetic identities at the very front end of new account origination for every type of user can pay huge dividends but too often, tightening fraud controls can deliver an alienating experience to legitimate customers and impact employee onboarding. Recent reports reveal that identity fraud remains an escalating issue, resulting in annual losses exceeding $24 billion (USD). Consequently, the significance of accurate identity verification and robust fraud prevention measures cannot be overstated, as they directly impact your business’s profitability.
The digital landscape of our economy introduces vulnerabilities to the process of identity verification, necessitating organizations to fortify themselves against these threats. The digital identity verification arena is swiftly adapting to counter the expanding menace of fraud. Emerging tools and technologies are empowering numerous companies to validate a consumer’s true identity in real-time, prior to finalizing any transaction. Today, we explore six prevailing trends in the realm of identity verification.
- Addressing Challenges with Hard-to-Verify, Underserved Populations
Identity verification professionals are encountering difficulties in authenticating the identities of hard-to-verify populations, such as young adults and recent immigrants. These groups often lack conventional forms of identification or a presence in traditional data ecosystems, making their verification challenging. To tackle this issue, identity verification professionals are exploring alternative data providers that can facilitate better verification of these populations’ identities. - The Surge in Identity Theft and Synthetic Identity Fraud
The rise in identity theft and synthetic identity fraud poses a growing concern for identity verification professionals. Losses from synthetic identity fraud are projected to exceed $2.42 billion in 2023, emphasizing the crucial role of identity data in detecting fraudulent activities. Criminals are becoming increasingly sophisticated in their methods, making it difficult for traditional identity verification solutions to detect fraudulent behavior. Consequently, there is a heightened focus on security and compliance as businesses strive to safeguard themselves and their customers from the financial and reputational damages resulting from identity theft. - Leveraging Identity Verification for KYC and KYB
Identity verification for know your customer (KYC) is gaining importance as businesses strive to comply with anti-money laundering and counter-terrorism financing regulations. Identity verification professionals are utilizing advanced technologies like machine learning and blockchain to enhance the identification and verification for KYC, assisting businesses in maintaining compliance and avoiding financial and reputational harm. - Mobile Identity Verification – The Rise of Phone-Based Identity Verification
Phone-based identity verification, also known as mobile identity verification, is gaining popularity as a means of verifying individuals’ identities. The increasing number of mobile users and the convenience of using mobile devices for identity verification are driving this trend. Identity verification professionals are harnessing the capabilities of mobile devices, such as Face ID and Touch ID, to enhance identity verification and detect fraudulent activities. This trend is expected to continue as mobile devices become even more ubiquitous and powerful. - Integration of Biometrics
Businesses are turning to biometrics integration to aid in identity verification. By utilizing biometric technologies, companies can verify client identities through fingerprints, facial recognition, and LiveID. With the prevalence of fingerprint and facial recognition technology in many mobile phones, more consumers are adopting these methods. In most cases, businesses can combine multiple biometric methods to increase the accuracy of identity recognition. - Consumer Concerns Driving the Need for Change
44% of American consumers consider banking fraud and identity theft to be their top concerns according to a report by FICO. Financial institutions are also deeply worried about identity theft, given the annual losses of approximately $16.8 billion. Hence, there is a clear demand for action against identity theft.
If you’re interested in learning more about this topic, I invite you to register for our webinar with Enformion titled, “Reaching the Underserved: Perspectives on Hard-to-Verify Customers“. Join us as we navigate the evolving landscape of identity verification to ensure a secure and trustworthy environment for your business and customers.
