70% of financial services organizations are taking a strategic approach to identity verification to combat financial crime and stay one step ahead of fraudsters according to Trulioo.
The research was conducted in the UK and the U.S. to explore how organizations are approaching identity verification during the COVID-19 crisis. It found that the key drivers for financial services firms in taking such a proactive approach were a combination of: a desire to be best-in-class, build trust, enhance customer experience and drive competitive advantage.
It comes at a time when the financial services industry is at risk from heightened levels of fraud as criminals have looked to exploit the COVID-19 pandemic. Indeed, according to this Statista study, there was a 47% increase in significant cyber fraud fraud reported in August 2020.
“The increase in fraudulent activity as a result of the pandemic isn’t the sole driver for the change in how financial services companies approach identity verification, but it’s a situation that has endorsed a ‘front-foot’ approach”, said Zac Cohen, COO, Trulioo. “While reducing the impact of fraud is key, so too is increasing trust and privacy, improving the customer experience and maximizing business revenues and profitability – all of which are connected when it comes to a high-quality identity verification experience.”
According to the research, over the last three years, there has been a shift in the way that businesses approach identity verification. It found that there has been a move away from “reactive identity verification” – where identity verification is approached as a tactical and commoditized necessity to ensure compliance – to “positive identity verification”. This is where it is treated as a critical component of the customer journey and a strategic driver of business value.
The research found one of the major drivers of change has been speed – 72% of financial services organizations now include speed within their measurement of identity verification performance. By tracking the average speed it takes to verify a customer at the initial account creation stage and further, along the customer journey, businesses are able to correlate this data with rates of abandonment, improving service, trust, consumer experience and profitability all while maintaining this highest standards of security.
Cohen concluded, ‘Consumers care deeply about protecting their digital identity and security, and they want to know that the brands they engage with are taking this seriously. But people don’t accept that robust processes are an excuse for slow or cumbersome digital experiences. This is why speed has become such a key factor within identity verification and is becoming a key metric for businesses to gauge the performance of their identity verification programs.”