Every business looking to bring on new customers or partners needs to be confident that the person they are dealing with really IS who they say they are. Whether opening a new account, providing access to client information, or authorizing transactions or purchases – identity verification must be taken seriously. According to recent reports, identity fraud continues to be a growing problem, generating losses of over $24 billion (USD) annually. This makes precise identity verification and fraud prevention more critical to your business’s profitability and reputation than ever before.
The digital nature of our modern economy can add vulnerabilities to the IDV process. Organizations protect themselves from these threats, by integrating proper processes and technology. The digital identity verification landscape is rapidly evolving to keep up with the growing threats of fraud. New tools and technologies are helping many companies confirm a consumer is who they say they are in real-time and before completing a transaction. Today, we take a look at 8 trends in identity verification.
IDV professionals are facing challenges in authenticating the identities of hard-to-verify populations, including young adults, recent immigrants, and the underserved. These populations often lack traditional forms of identification, or a presence in traditional data ecosystems, making it difficult to verify their identities. To address this challenge, IDV professionals are exploring alternative data providers to better verify the identities of these populations.
The rise in identity theft and synthetic identity fraud is a growing concern for IDV professionals. Losses from synthetic identity fraud are expected to exceed $2.42B in 2023, making the role of identity data in detecting these fraudulent activities more critical than ever. Criminals are becoming more sophisticated in their methods, making it difficult for traditional IDV solutions to detect fraudulent activity. This has led to an increased focus on security and compliance as businesses strive to protect themselves and their customers from the financial and reputational damage that can result from identity theft.
IDV for KYC (know your customer) and KYB (know your business) is becoming increasingly important as businesses seek to comply with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. In particular, identifying the ultimate beneficial owner (UBO) of a business is critical for ensuring compliance with these regulations. IDV professionals are using advanced technologies such as machine learning and blockchain to better identify UBOs and verify their identities, helping businesses to remain compliant and avoid financial and reputational damage.
Phone-based IDV, or mobile identity verification, is becoming increasingly popular as a means of verifying identity. The growing number of mobile users and the convenience of using a mobile device for identity verification are driving this trend. IDV professionals are leveraging the capabilities of mobile devices, such as facial recognition and geolocation data, to better verify identities and detect fraudulent behavior. This trend is expected to continue as mobile devices become even more ubiquitous and powerful.
Machine learning is becoming increasingly important in identity verification as it allows organizations to analyze vast amounts of data and detect patterns that can indicate fraudulent behavior. IDV professionals are using machine learning algorithms to identify potential fraud quickly and accurately, reducing the risk of financial and reputational damage. As machine learning technologies continue to advance, they are expected to play an even greater role in identity verification, driving innovation and improving the quality of IDV solutions.
Businesses are looking towards biometrics integration to help with verifying identities. Using biometrics technology, companies can verify client identities through voice analytics, iris scans, geolocation, fingerprint, and facial recognition. Many mobile phones are now equipped with fingerprint and facial recognition technology and more consumers are adopting these technologies. In most instances, businesses can combine multiple methods of identity verification to increase recognition accuracy.
According to FICO’s report, 44% of American consumers list banking fraud and ID theft as their top concerns. It further highlights that ID theft is also a massive concern for financial institutions, with losses of about 16.8 billion dollars every year. Therefore, there is no denying that something has to be done about identity theft.
Multiple identity verification software and tools are available to help meet market demands. Although the ID security threat is on the rise, new technologies can help mitigate these risks. The push by consumers to drive change in identity verification ensures we have a more secure online sphere.
The IDV providers marketplace is experiencing significant changes as a result of market conditions. A new class of identity platforms is emerging, offering businesses a single solution for identity verification, fraud detection, and compliance. At the same time, young companies are being pushed to exit prematurely, while incumbents are buying revenue to maintain their position in the market. These changes are creating a more competitive and dynamic marketplace, driving innovation, and improving the quality of IDV solutions.
Are you looking to onboard more customers with confidence while preventing fraud? Using the latest advances in IDV technology, Enformion can help your business improve profitability and maintain its reputation. Enformion provides identity verification and fraud mitigation solutions that offer advanced analytic insights and a comprehensive view of 280M+ consumers. With our suite of fraud prevention products and risk scores, you can discreetly and quickly detect and stop fraud. Contact us to learn more or request a customized demo.