Mobile devices and smart tablets are an essential part of our everyday life, and customers demand nothing less than a friction-free experience. Keeping this under consideration, numerous organizations are concentrating on digital transformation to live up to customer expectations. Some statistics that reveal the intensity of digital transformation in the upcoming years are listed below:
- Spending on products and services that facilitate digital transformation will reach a value of USD 2.3 trillion by 2023
- The global market for digital transformation is forecasted to increase at a CAGR of7% by 2025
- Approximately90% of new business apps will be employing artificial intelligence technology by 2025
As businesses evolve to remain competitive in a digital-first world, most communications between companies and customers now take place through online platforms. This indicates that to sustain customer loyalty, robust security procedures need to be implemented without compromising customer experiences.
To enhance the process of digital transformation, online identity verification is being increasingly utilized by businesses today, with the global identity verification market forecasted to reach a value of USD 17.8 billion by 2026.
Listed below are three reasons why identity verification is an integral part of a company’s cybersecurity strategy:
1. Traditional Methods are Vulnerable
In today’s technologically advanced world, customers expect a seamless digital experience, and businesses that fail to keep up could risk being at the receiving end of reputational and financial losses.
Along with ever-evolving customer demands, the customer identity verification process is also going through a phase of transformation. This is because conventional methods such as the KBA (Knowledge-based Authentication) approach and two-factor authentication (2FA) are no longer sufficient for filtering out fraudsters.
Questions asked in the KBA approach are based on data that can be easily found on social media sites or through other public forums, making it easy for fraudsters to manipulate the security questions. Additionally, 2FA is also a vulnerable approach for identity verification as fraudsters are capable of intercepting the codes sent to customer’s email addresses or mobile devices.
Apart from security concerns, both of these methods are also known to frustrate customers, as users might have forgotten the questions asked in the KBA method or might receive the authentication code in the 2FA approach with much delay.
2. Businesses Need To Earn And Sustain Customer Trust
For businesses aiming to evolve digitally, it is crucial to build and sustain customer trust through well-protected business processes. Such companies aim to achieve three main objectives:
- Secure the customer’s data
- Reduce fraudulent activities, such as identity theft, account takeovers, and CNP (Card-Not-Present) fraud
- Provide a seamless customer experience
With a vast number of available digital platforms, businesses need to verify the identity of customers to ensure that they are onboarding legitimate users and not bots or cybercriminals.
Advanced, fully automated online identity verification solutions provide companies with the opportunity to deliver a streamlined customer journey. This way, cybercriminals can be effectively deterred and the customer conversion rate can be substantially reduced.
3. Digital Identity Verification Encourages Growth
Emerging identity verification solutions utilize innovative technologies, such as artificial learning, machine learning, and biometrics to rapidly authenticate that an individual’s real-world identity matches their identity in the digital world.
This approach involves three basic steps:
- Companies can onboard new customers through facial verification and document authentication
- Once the personal details are provided, customers can be authenticated through a selfie that is cross-matched against the customer’s picture present on the official ID document
- Once the customers are verified, results are displayed on the screen and updated in the company’s back-office
– Real-world Advantages of Online Identity Verification
These technologies provide the following benefits to numerous industries, all of which ultimately enhance the long-term growth of the business:
- Compliance with KYC and AML regulations
- Fraud prevention through biometric verification
- Financial institutions, such as banks, insurance firms, fintech, brokerage companies, etc. can provide a secure and transparent online experience
- Transactions can be validated in real-time through biometric technology
- Security at mall entrances can be enhanced
- Passengers can be verified within seconds at airport security checkpoints
- Social media sites can be secured through an extra layer of protection in the form of biometrics
- Hotel check-ins can be automated
- E-learning platforms and educational institutions can be better secured