Why identity verification needs to be a part of your digital transformation strategy
Smartphones and tablets are an indispensable part of daily life, and consumers expect nothing less than a streamlined mobile experience. With this in mind, businesses are focusing on digital transformation efforts in order to deliver an excellent customer experience. According to a recent Forrester report, 56 percent of companies said digitization is currently underway, and 38 percent of companies said digital transformation will have the greatest effect on business decisions over the next year.
As companies evolve to stay competitive in an increasingly digital world, most interactions with customers will now occur on a screen rather than in person. This means stronger security measures need to be implemented, and a seamless customer experience maintained, in order to sustain customer loyalty.
Digital identity verification is an unsung hero in an organization’s digital transformation strategy because companies must verify that a person’s digital identity matches their physical identity when conducting business online. As a key driver of digital transformation, the identity-verification-as-a-service market is expected to reach up to $20 billion by 2022, according to McKinsey.
Here are three key reasons why identity verification needs to be part of your company’s digital transformation strategy.
Previous verification methods are now outdated
Consumers now demand a seamless digital experience and your business will suffer if you don’t have one in place. With the continued emergence of digital-first, companies must anticipate the growing consumer desire to have everything they need at their fingertips while also providing a good digital experience.
The process for providing a secure way to verify a consumer’s identity online is also changing. Why? Traditional authentication methods such as two-factor authentication and knowledge-based authentication are no longer recommended by the National Institute of Standards and Technology. Knowledge-based authentication questions are easy for users but are also based on information easily found on social media, through other sources of publicly available information, or through the dark web (courtesy of recent large-scale data breaches), making it easy for fraudsters to answer security questions. Two-factor authentication can be problematic because fraudsters are also able to play man-in-the-middle and can intercept SMS messages meant to be sent to the user.
Aside from the security concerns linked to both of these authentication methods, businesses also run the risk of a frustrating customer experience—users might find knowledge-based authentication questioning intrusive, and a missing authentication factor (smartphone, key fob) can easily derail the two-factor authentication process.
Companies need to earn and maintain customer trust
For companies looking to digitally evolve, it’s imperative to keep customers’ trust through secure business processes. A recent PwC survey found only 25 percent of consumers believe companies handle their personal information responsibly and 87 percent will take their business to a competitor if they don’t trust a company to handle their data responsibly. Following the Cambridge Analytica debacle, consumers’ trust is now harder to earn than ever before.
Digitally evolving companies have two objectives: to keep customer data secure, and to create a simple process that lets real customers in while keeping fraudsters out, effectively increasing customer conversions while providing a seamless customer experience and reducing fraud. With the continued rollout of digital platforms, organizations need to verify they are onboarding real customers. Modern online identity verification methods provide the flexibility of designing a simple and streamlined customer journey that can help optimize conversions while at the same time effectively deterring would-be fraudsters.
Digital identity verification can help companies scale
Emerging identity verification services leverage innovative technologies, such as biometrics, AI, machine learning, computer vision and verification experts to quickly verify that a person’s real-world identity matches their digital identity.
This hybrid approach to the identity verification process includes two steps: first, we ensure that the government-issued ID (such as a driver’s license or passport) is authentic and second, we ask the user to take a real-time selfie on either a mobile or web platform to ensure the person holding the ID document is the same as the person in the ID photo.
As the latest biometric innovation in the digital identity verification process, companies are introducing a liveness check feature to make sure a person attempting to create an account is physically present during the transaction. Liveness detection demonstrates that a company takes fraud very seriously and wants to ensure that the person creating the account is, in fact, who they claim to be. It also empowers businesses to scale by easily onboarding new customers without compromising security. This process can be done in less than two minutes and streamlines the customer experience.
This method of online identity verification (requiring the capture of a government-issued ID and a real-time selfie) is becoming increasingly more familiar thanks to sites like Airbnb, Coinbase, HSBC, Instacart and others. A decade ago the idea that you would submit a selfie as part of verification to create a new account would have been scare for many, but this type of verification is now commonplace…and that familiarity helps with adoption.
Wherever companies are in their digital transformation journey, the delicate blend of security and customer experience will continue to be a determining factor in success. By enabling companies to conduct secure transactions online by preserving a seamless customer experience, identity verification proves itself a key foundational tactic in any digital transformation strategy.