Can Digital Identity Verification Save the Sharing Economy?
January 6, 2021
Sharing economy platforms had permeated almost every aspect of consumer lives well before COVID-19, but the pandemic, as well as advances in AI and alternative data, have helped further accelerate the adoption and use of these technologies.
But how do platforms such as Uber and Deliveroo ensure supply meets demand? Here, we will explore how digital identity verification can help the sharing economy.
The sharing economy
The sharing economy is a system built around the sharing of resources. It often involves a way of purchasing goods and services (such as taxis, deliveries or a place to stay) that differs from the traditional business model of companies hiring employees to produce products to sell to consumers. People in the sharing economy are often self employed and can work as and when they like; think Uber, Airbnb, etc.
This economy is estimated to be worth a staggering $335 billion by 2025 as people change the way they live, work and consume. 2020 saw demand for sharing rides, homes, skills, electric bikes or scooters plummet, but at the same time, home delivery services of food, groceries and other goods have thrived. It’s estimated that over 14 million Uber trips take place every day while in the first half of 2020, Just Eat’s revenue was up 44% YoY to £1 billion.
One of the main characteristics typical of sharing economy companies is their on-demand access and idle capacities and resources. Users often have the ability to pick and choose their jobs and when they want to work, but when demand increases it’s important that these companies have the workforce standing by to meet it.
Onboarding in the sharing economy
An idle workforce poses its own problems, but if demand rapidly increases, companies in these sectors need to be able to onboard at scale.
When performing some form of identity verification or onboarding, businesses would traditionally use methods such as proof of address or sending a copy of a passport and manual checks, and sharing economy startups are no different. These outdated processes can be time-consuming, frustrating and create a poor user experience for customers who may be likely to move to a competitor.
As we explored recently in our blog post on Financial Inclusion, 21% of young adults aged 20-34 in the UK live with their parents. That is 2.7 million people who are unlikely to be named on utility bills, have a credit card, pay rent or have a mortgage; 2.7 million people who may not have readily accessible bills or statements that they’re named on. Students are another key population that struggle with traditional identity verification processes; 40% of students say that they would find it inconvenient to provide a paper copy of a bank statement, whilst 28% stated that it would be impossible for them to provide a paper copy of a recent utility bill.
Due to their lifestyles, these demographics are staunch advocates of the sharing economy, and relying on traditional data to verify identity doesn’t just alienate the modern digital individual, it can lead to huge demographics being unable to access the services they want.
This is where utilising automated solutions and a wider range of data sources can be used to draw insights on an individual and have them using services as quickly as possible. Alternative data is the antithesis of traditional data in that it includes anything from mobile phone usage, monthly payments and social media activity, to biometric identities derived from iris scans, fingerprints and hand geometry.
By leveraging alternative data sources, businesses can construct a richer, contextual understanding of individual users, enabling both more accurate risk assessment and personalised customer experiences. Combined with emerging technologies like artificial intelligence and machine learning, businesses can automate manual tasks in the onboarding process, significantly reducing time and cost, and enabling previously excluded customers.
Modern problems require modern solutions and as such, it is important to integrate automated processes to ensure individuals are able to make use of the services they need as quickly and efficiently as possible. This way, with the nature of sharing economy companies, everyone’s a winner.
How we can help
Here at Acuant, we’ve a comprehensive family of KYC and AML solutions all working together and delivered via a single API integration. Utilising all forms of data, this integrated approach helps increase pass rates in countries all over the world, which in turn increases revenue and customer acquisition with real-time onboarding, creating a better customer experience.
Traditional checks, such as using credit history mean that many good customers are turned away. A vast number of millennials do not have CRA data so if this source is used, they are rejected. Equally in countries with thin files, where traditional data does not exist or is scarce, our product offering can be used to qualify and verify new customers.
Our global ID, KYC & AML platform, Sodium, is designed to help save you time and money, streamline your customer journey, automate your onboarding process, reduce fraud and achieve regulatory compliance. One simple integration; a flexible 360° solution which is scalable and secure.
A unique and real-time ID scoring system intelligently verifies identity through a combination of data sources, including digital footprint verification, document authentication, facial recognition matching, liveness verification, live utility data address verification and CRA identity checks.
Utilise a single element or multiple processes – it’s entirely up to you. Learn more about how we can help to automate and simplify your verification processes to help you to learn more about your customers.
Book a demo today and see for yourself how powerful our suite of solutions are.