Mitigating Risk & Establishing Trust with Identity Verification

Mitigating Risk & Establishing Trust with Identity Verification

Trust is an imperative aspect of any relationship, especially when building a loyal customer base, and is even harder when conducting transactions and establishing relationships online. The recent influx of remote and online transactions has meant more fraud—there were over 2.2 million reports of fraud and 1.4 million reports of identity theft in the United States in 2020 according to the Federal Trade Commission and Aite Group expects losses due to identity theft to reach $635.4 billion by 2023.

On the flip side, as life becomes more digitally entrenched, consumers are more likely to accept various forms of verification methodologies as part of the onboarding process, including document authentication and biometrics such as fingerprint scanning and facial biometric verification. In the first half of 2020 alone, monthly traffic for eCommerce grew from sixteen to twenty-two billion globally—industries that were traditionally brick and mortar, such as healthcare and banking, are now competing in and adapting to the expanding digital environment. The use of services such as telemedicine and digital banking (including open banking), as well as the rising popularity of cryptocurrencies and digital wallets, is increasing inclusivity and access in general and for the typically underserved or unbanked.

To secure an organization and comply with industry regulations, knowing and verifying the identity of one’s customers is critical, and today this means keeping up with rapid digital transformation when it comes to identity verification solutions and customer expectations for fast and easy user experiences.

Document Verification & Authentication: validating an identity document has two steps, authentication and verification. Authenticating an identity document, such as a passport or driver’s license, is the act of validating that the document has actually been government-issued. In tandem, the verification process is done to ensure that the document has not been tampered with, forged or counterfeited. Fraudsters use sophisticated tactics in their attempts to commit fraud, making the use and enforcement of enhanced security documents, such as the REAL ID, critically important for preventing fraud and identity theft.

Biometric Verification: an added layer of identity verification, and one that is becoming more commonly used, is biometric verification. This can include, but is not limited to, fingerprint scanning and facial matching, both of which have become routine for unlocking mobile devices. Biometrics allow for a high level of assurance when it comes to verifying identities. However, fraudsters are wily in their attempts to circumvent security measures and are now using tactics such as deepfakes in their attempts to pass biometric measures. As such, adding liveness detection, particularly passive liveness detection, as part of the biometric verification process is a crucial step to preventing fraudulent identities from making their way into one’s customer base.

Continuous KYC: while verifying a customer’s identity and documentation during onboarding is imperative, effective identity proofing and Know Your Customer checks are not a one-step process. While customers may be trustworthy when initially onboarded, there is no guarantee that they’ll continue to be so. A customer’s risk profile is always changing throughout the customer lifecycle, whether intentionally or unwittingly. Either way, ongoing customer and transaction monitoring is important for managing risk, detecting fraud and preventing money laundering.

Different businesses will require different identity verification models depending on the risks associated with their specific industry, but ultimately, building a customized identity verification model that best serves your business will be essential for identifying and ensuring trustworthy transactions and customers. The right solution will provide a high level of assurance through a layered identity verification model that includes document authentication, biometric verification and continuous KYC, but won’t add unnecessary friction to the user experience. Balance is key.

To learn more about the importance of identity verification and how businesses can build the right digital identity model for their use case, read our white paper with One World Identity, Establishing Trust: Identity Verification in an Increasingly Digital World.


* New Dimensions of Change: Building trust in a digital consumer landscape, The Economist Intelligence Unit
* Consumer Sentinel Network Data Book 2020, FTC
* U.S. Identity Theft: The Stark Reality, Aite Group 


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