Staying ahead of fraud risks with multi-layered identity verification
Our latest Identity and Fraud report found that 69% of organisations experienced ‘significantly’ or ‘somewhat’ higher losses from fraud in 2023 compared to 2022. At the same time, more than a third (35%) of consumers feel that they are ‘more of a target’ for fraud than they were a year ago, with the biggest perceived threat being identity theft.
When it comes to fighting back against fraud, identity verification – which incorporates multiple techniques and technologies – is critical. Identity verification works by analysing data from numerous sources, such as from online identities, and cross referencing it with trusted data sources – such as the credit bureau – to gauge the likelihood that customers are who they say they are.
In this short guide, we take an in-depth look at what identity verification is and how identity verification services such as Enformion.com can help you minimise fraud risks, improve your consumers’ online experiences.
Understanding Identity Verification
Identity verification is the process of confirming an individual’s identity. In the past, this happened face-to-face, but now, with most interactions occurring online, digital tools are essential for remote verification. Essentially, it’s about ensuring that the person engaging with a service or platform is indeed who they claim to be. This process is crucial for building trust and security in online transactions and interactions, especially in an era where fraudulent activities are increasingly sophisticated and prevalent.
Traditional Methods Go Digital
Modern identity verification includes online variants of traditional approaches. This involves checking customer details against trusted sources like banking records and verifying identity documents remotely using technologies like artificial intelligence (AI) and machine learning. In essence, the methods of verifying identities have evolved to adapt to the digital age. Instead of physically presenting documents, individuals can now upload them online for verification, with advanced algorithms ensuring their authenticity and accuracy.
Setting Standards: The UK Framework
The UK Government has established the Digital Identity and Attribute Trust Framework, outlining requirements for effective identity verification. This framework ensures clarity and trust in digital identities. By providing guidelines and standards, the framework helps businesses and organizations implement reliable identity verification processes that align with regulatory requirements and industry best practices. This not only enhances security but also fosters interoperability and consistency across different platforms and services.
Exploring Different Methods
Various tools and techniques contribute to identity verification, offering multiple layers of protection against fraud:
- Activity History: Cross-referencing consumers’ activity history against trusted data sources ensures the accuracy of provided information. By analyzing past interactions and behaviors, organizations can assess the consistency and legitimacy of individuals’ identities, thereby reducing the risk of fraudulent activities.
- Mobile Network Operator Data: Accessing consumers’ mobile phone identities provides valuable information associated with a phone number or contract. This data can include details like the device used, the location, and other identifiers linked to the individual, enhancing the verification process and adding another layer of security.
- Document Verification: AI-powered facial recognition verifies the authenticity of identity documents by analyzing various elements. From checking the integrity of the document itself to comparing facial features with official records, this technology ensures that the documents provided are genuine and not tampered with, mitigating the risk of identity theft and fraud.
- Behavioral Biometrics: Analyzing unique behavior patterns verifies identity and enhances security without cumbersome authentication processes. By studying how individuals interact with digital platforms, including typing speed, mouse movements, and navigation patterns, organizations can create profiles that distinguish between legitimate users and potential impostors, bolstering security measures.
- Device Biometrics: Analyzing data about end-users’ devices, such as IP address and location, helps detect fraudulent activities. By examining the characteristics and usage patterns of devices accessing their services, organizations can identify suspicious behavior indicative of fraudulent activities, such as multiple logins from different locations or devices.
- Physical Biometrics: Utilizing fingerprint readers, facial recognition, or iris scanners ensures secure and reliable authentication. By capturing unique physical characteristics, biometric authentication methods provide a highly accurate and tamper-proof means of verifying individuals’ identities, reducing the risk of unauthorized access and fraudulent activities.
Benefits of Identity Verification
Implementing identity verification brings several advantages:
- Cost Savings: Automated identity verification reduces administrative costs for businesses while streamlining the customer experience. By automating the verification process, organizations can eliminate manual tasks, reduce labor costs, and expedite customer interactions, resulting in significant savings and operational efficiencies.
- Fraud Detection: Multi-layered verification methods effectively combat identity fraud, protecting businesses and customers. By deploying a combination of techniques and technologies, organizations can create robust barriers against fraudulent activities, minimizing financial losses and reputational damage caused by fraudulent transactions and unauthorized access.
- Fast, Frictionless Experiences: Automated verification processes ensure quick and transparent customer experiences, reducing abandonment rates. By streamlining the verification process and minimizing friction points, organizations can provide a seamless and user-friendly experience for customers, increasing satisfaction and loyalty while reducing the likelihood of abandonment or frustration.
- Operating Efficiency: Automated approaches minimize manual interventions, enhancing operational efficiency for organizations. By leveraging technology to automate identity verification tasks, organizations can streamline workflows, reduce errors, and optimize resource allocation, resulting in greater productivity and cost-effectiveness across the board.
- Regulatory Compliance: Identity verification facilitates compliance with regulations like KYC and AML, ensuring transparency and adherence to industry standards. By implementing robust identity verification processes, organizations can meet regulatory requirements, mitigate compliance risks, and demonstrate their commitment to ethical business practices and customer protection.
- Financial Inclusion: By utilizing multiple data sources, identity verification enables access to financial services for individuals without traditional identification documents. By leveraging alternative data sources and advanced verification techniques, organizations can extend financial services to underserved populations, promoting financial inclusion and socioeconomic empowerment.
How We Can Help
Our suite of identity verification services offers customizable solutions to meet your business needs, from basic verification to comprehensive anti-fraud measures. We provide the tools and validation necessary to prevent fraud and protect your business interests. With our expertise and technology, you can enhance security, streamline operations, and build trust with your customers in today’s digital landscape.