Trust between customers and companies is sacred and hard-earned. Verifying that your customers are who they claim can be a necessity but shouldn't be a difficult step in their journey with you.
Patrick Johnson, July 28th, 2020
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Companies across the globe are now evolving to stay competitive not just within their own sectors, but within the digital world as well. We are now in a position where customer interaction takes place online more often than face-to-face and the term ‘customer service’ has never been more complex. But what is identity verification?
These same customers are also now becoming much savvier with technology and they are demanding higher levels of transparent security while not compromising on the speed at which they want their needs to be met.
Digital identity verification is becoming a key part of every organisation’s offering. Without it, seamless and effective security measures simply cannot be maintained or sustained.
Financial institutions, the banking industry and online marketplaces are usually thought to be the main players that need strong identity verification processes in place. However, many companies in varying and diverse markets are now realising the benefits of robust identity verification and are leading the way in their digital strategy.
Here are 5 reasons your company needs excellent ID verification as part of your digital transformation strategy:
Over the years there have been many different authentication methods that companies have used to determine that their customers are who they say they are. Things like two-factor authentication and knowledge-based authentication have been particularly popular.
However, the current thinking is that these processes are now antiquated and outdated, and they are now no longer recommended by the National Institute of Standards and Technology in the US.
This is because knowledge-based authentication questions might be easy for users, but the information can easily be lifted from social media, the dark web or other publicly available information. This makes it easy for fraudsters to impersonate whoever they like. Two-factor authentication (like using fobs or SMS services) are also not good enough now as fraudsters have found ways to intercept these processes.
It is becoming increasingly common for customers to be turned off by these systems and to turn instead to a more technologically savvy service provider. The time is ripe for all organisations to leave these processes behind and choose a new system, otherwise their company will simply be left in the dust.
Customers may now be operating in a digital rather than physical space, but that doesn’t mean that they want to compromise on service. This used to mean they wanted to be cared for in an efficient and friendly manner but now it means that they want their data to be cared for securely and simply.
A recent PwC survey highlighted that only a quarter of consumers think that companies look after their data responsibly. 87% also said they wouldn’t hesitate to go to a competitor if they didn’t trust a company to handle their data responsibly.
This means that companies now have three key objectives when it comes to their online service:
The good news is that the latest online identity verification methods (like Veriff’s) do all three of these. These cutting-edge systems are designed to create a transparent and streamlined customer journey that optimizes conversions of real customers while deterring would-be fraudsters and Creepy Toms.
Another factor in creating loyalty is to connect emotionally with a customer and convince them that you care about their wellbeing. They, in turn, will trust you and become powerful advocates. Looking after their data securely is the first step in this process. Neil Bayton, the head of UK partnerships at Trustpilot, says:
“When a customer has that emotional connection with a business, they become an advocate. They not only tell others about the brand, but they want your business to succeed.”
At its most basic level, digitizing and securing the onboarding process for new customers can reduce operational costs.
This is because the costs of manual verification and security risks are eliminated, while business is not lost through clunky processes and multiple touchpoints.
You would think that financial institutions would be the most knowledgeable about this, but banks all over the world are still facing billions of dollars in losses every year because of inefficient or incomplete KYC (know your customer) processes. Using automated identity verification services avoids this because document and ID verifications are done efficiently in real-time.
Not only does modern identity verification help you create cost efficiencies, but it may also save you money because it can help you avoid costly fines
As an example, early in 2019, Standard Chartered was fined $1.1 billion by US and UK authorities for poor anti money-laundering (AML) controls. Companies that ensure that their identity verification systems are resilient to attack lower the risk of potential illegal activities on their platform.
Regulation compliance is something that companies cannot avoid. In more than 90 countries worldwide there are now stringent compliance regulations that state it is mandatory to verify customer identities and keep identity records.
These regulations are created to reduce online fraud, data breaches, cyberattacks, and identity theft. In general, they refer to the way in which data is collected, how it should be protected, and how the processes should be monitored properly.
One example of such regulation is the General Data Protection Regulation (GDPR) which is an EU law for citizen data privacy and protection. According to this law, any company that fails to comply with the GDPR requirements will be subjected to harsh fines and is likely to suffer from heavy reputational damage as well.
As these stringent measures to prevent fraud by governments and trade bodies are always evolving, it is essential that companies aren’t caught out by the regulations. One way of doing this is by working with a provider like Veriff who will stay ahead of the game and are always looking for ways to advance and develop their identity verification services.
We have saved arguably the biggest reason your company needs excellent ID verification until the end. This is, of course, the objective to reduce the possibility of a data breach or fraudulent activity on your digital platform.
The number of global data breaches has increased exponentially in recent years. This is because fraudsters have worked out increasingly intricate ways to bypass old systems and commit financial crime, identity theft, and account takeovers.
According to a 2018 study, 60 million Americans have been affected by identity theft and in 2019, the global average cost of a data breach amounted to 3.92 million U.S. dollars. Not only does this cause damage to the victims, but it also harms the companies themselves as the trust in their service is irrevocably lost.
This factor alone should leave companies in no doubt that they need to prioritise their identity verification procedures to ensure no loophole is left. The safety and security of their customer data is paramount as we move forward in this digital world.
Veriff has been awarded certification against the ISO/IEC 27001:2013 standard
Former marketing leader at Qualtrics joins Veriff’s executive team as CMO to expand strategic marketing initiatives across the globe.
The actual process of monitoring transactions depends on the services your business provides. However, generally speaking, in order to monitor financial transactions, a company will create a rules-based system that’s based on their needs.