Ensuring a secure and reliable identity verification has always been a top priority for businesses, however as digital advancements occur, consumers become more and more demanding of convenient processes.
With an abundance of digital data available for business intelligence, is there really any reason to rely so heavily on traditional paper sources anymore?
- Rising Fraud Figures
Impersonation fraud is on the rise, with Cifas finding that almost 500 identities are being stolen per day. While the emergence of the digital age has brought risks along with it – including the popular illegal online marketplace known as the dark web – the majority of companies have yet to leverage digital data to combat fraud. On the dark web, criminals buy and sell personal identification information, including forged and real documents such as driving licenses, passports and bank card details. Given that many service providers only require these details in order to make a payment, transfer money, or to open an account, this begs the question: What is really being done to ensure that the consumer is the legitimate owner of the identity that they are using?
- Traditional Methods
Traditional methods of authentication, such as proof of address or sending a copy of a passport can cause frictions for the user. It can also be time-consuming and frustrating which results in a poor user experience and higher drop-off rates. With 42% of millennials saying they would conduct more online transactions if there weren’t so many security hurdles to overcome, it’s looking like it’s time to move away from the traditional verification methods and implement more convenient processes.
54% of businesses are only “somewhat confident” in their ability to detect fraudulent activity – so this begs the question: Are traditional authentication methods really that trustworthy’?
- Alternative Data
With the digital age ever-evolving, companies should be moving with the times to keep up to date with the latest technologies.
According to Experian, 75% of businesses want advanced authentication and security measures that have little or no impact on the digital customer experience.
It’s imperative that businesses are implementing secure and reliable levels of verification and authentication to prevent fraud from taking place. With over 3.1 billion active social media users worldwide in 2018, most individuals do have a digital footprint. Harnessing these data sources throughout the verification processes – such as connecting existing social accounts – can help to reduce losses and also allow good customers through who businesses may have previously wrongly rejected.
- Traditional Methods vs Alternative Data
More often than not traditional identity checks are unnecessarily – yet avoidably – long and require information even the individual doesn’t readily know. As such, alternative data offers the opportunity to collate, assess and corroborate the digital footprint in real time to create a 360 view. This efficient method reduces the drop-off rates in sign-up processes and flags fraudulent activity. Furthermore these solutions are not restricted by countries therefore it delivers a global solution.
Leveraging a multi-pronged approach to analyse digital data in real-time (assessing the quality and quantity, as well as looking for corroborative data) can robustly verify identity quickly and efficiently all online with less friction than traditional methods.
In summary alternative data is a clear game changer for many businesses looking to expand globally as it can both verify & authenticate a user, save time and reduces costs. The real questions is, are you ready to evolve?
To find out how we can help to improve your KYC and AML challenges please get in touch.