Identity theft incidents are on the rise as more transactions are done online. The number of identity theft cases increased annually by 73% between 2019 and 2020, according to the Federal Trade Commission, and this trend is projected to continue.
All institutions need a proactive security strategy given the prevalence of fraud. Fortunately, preventing a crippling cyberattack and other related scams is simple by putting in place a robust customer identity verification process.
What is customer identity verification?
You’ve surely heard about this before, but what is identity verification exactly? Customer identity verification is the procedure that businesses employ to confirm a person’s information and identity. Successful institutions find it simpler to verify that their clients are who they say they are, preventing identity fraud and other associated scams.
A customer identity management system enables managers to determine whether a customer can be a risk to the business and aids institutions in remaining compliant with rules. Given that they handle a lot of personal information, banks, healthcare organizations, and legal entities stand to gain the most from proper authentication. The most popular techniques for client verification are listed below.
Customers are authenticated by biometric systems based on their biological traits. Users benefit from a high level of convenience when using fingerprint or face feature analysis because no passwords need to be remembered. Additionally, biometric data is difficult to copy or steal, which increases security.
Authentication via several factors
Users must supply two or more verification factors when using the multi-factor authentication (MFA) mechanism to access a system. For instance, MFA will require your users to enter a different one-time password (OTP) for each session, rather than simply allowing them access to your system by entering their password the first time they log in.
Although email and SMS OTPs are the most frequently used verification methods, MFA can also use smartcards, biometrics, and authenticator apps. Overall, having many protection layers will lessen the possibility of a successful cyberattack.
The process of document verification involves scanning official papers like passports, bank statements, and driver’s licenses for a variety of features like holograms, stamps, and watermarks. Additionally, these documents contain personal information like a person’s name, birthdate, and address. These facts can be cross-referenced with data from other sources to ensure their accuracy.
Authentication based on knowledge
This kind of validation confirms that the user actually knows the information they first provided. Users of this method are often asked to respond to a brief set of security questions by organizations that employ it. It is impossible to steal specific responses to questions like “What is the name of your first pet?” or “Who was your second-grade math teacher?” These types of questions make it much less likely that a breach will occur.
This sort of verification employs artificial intelligence, biometrics, computer vision, and human assessment to ascertain whether a government-issued ID belongs to a user. In order to confirm that the person holding the ID is the same person on the ID, they are often asked to supply a photo with it.
The main advantage of a thorough client identity verification process is that it helps to stop fraudulent activities. It has additional advantages besides increased security, such as:
A better customer experience
Because most businesses use digital workflows, there is less need for paperwork. Onboarding can be made simpler, especially in identity verification. Your customers’ access to your services will be accelerated by reducing obstacles in the application process and improving their relationship with your business.
Prevents fraud of all kinds
Having identity and access management services prevents fraud, which is the main advantage. This is crucial for businesses in the financial sector since it can stop various types of fraud including money laundering.
Ensures compliance with federal laws
Customer identification can violate a person’s privacy and federal regulations if it is not applied properly. For the processing of an individual’s information, including face recognition and other biometrics, a number of data privacy legislation demand consent and prior notification.
Furthermore, failing to confirm someone’s identity can result in illegal transactions, which could result in steep fines or even criminal charges. Instead of taking the information provided at face value, think about utilizing a system that collects authenticated images or videos of your clients to serve as identification proof.
Including identity verification on your site improves customer experience by improving the safety of the user and securing their identity information. With identity theft crimes on the rise, this is a must-have for every site that contains sensitive information about users. Rest easy knowing your site is safe while your users also needn’t worry about sharing their personal information with your company.