Recent research reveals that an astonishing majority (84%) of financial services in the UK are concerned about their identity verification capabilities, and rightly so.
No consumer is likely to sing praises about the verification processes currently in place in a lot of institutions, a common example being providing a recent utility bill.
With sharp advancements in technology across a vast majority of sectors, it’s a wonder why identity verification in many still rely on traditional methods such as official documents.
Financial institutions need to consider the evolving needs of consumers, predominantly Millennials and generation Z, both typically lacking in traditional data such as credit history. These populations are in danger of finding themselves stuck in cycles where they put off big purchases such as cars or houses because they lack adequate credit for financial support, and therefore fail to build up a credit history.
An age-old problem
Millennials reportedly earn 20% less in salaries than the Baby Boomer generation, and as a result, many are putting off significant purchases that would actually help them to build credit such as houses and cars. The lack of credit history means that a large amount of this generation – and possibly even more of Generation Z – class as thin-file and, as a consequence, find themselves unable to access services such as traditional loans, rental agreements and mortgages.
So what does the future hold?
Big Data = Big Possibilities
There’s a lot of talk about ‘Big Data’ but this simply refers to any large amount of unstructured data and is entirely meaningless without the adequate analytics tools to derive meaning from it.
There are huge amounts of digital data created daily, therefore a continued reliance on the same traditional sources as twenty years ago risks restricting access for consumers who could otherwise be verified.
Balancing Customer Convenience & Security
Customer’s data is extremely important to keep safe, and with fewer and fewer consumers finding themselves adequately covered by traditional sources alone, it is important to take into account alternative ones that we have available to us in the digital age. Consumers have become used to being able to access goods and services within a few simple swipes and clicks, and any requirements for more vigorous checks adds friction and can result in high drop-off rates throughout the process.
This is how 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. Harnessing alternative data sources throughout the verification processes can help boost inclusion and increase access for those currently excluded or restricted, helping them to invest in business and property and, in turn, the economy.