Increasing scrutiny from customers and regulators combined with increasingly scrupulous fraudsters means your online identity verification program must get real. Verifying the real life identity of your online customers is a growing concern and necessity of businesses across industries.
Many of solutions exist to help companies identify the true identity of their online customers. If you’re in the market, you’ll soon discover that not all solutions are created equal in terms of fraud detection and deterrence, compliance, and user experience.
Consider knowledge-based authentication (KBA), as one example. A formerly widely accepted verification method, the KBA system is straightforward and offers a fairly positive user experience due to its simplicity: it verifies online identity by asking users specific security questions. However, it can be vulnerable to data breaches when fraudsters purchase personal data for impersonation. The 2017 Equifax data breach was one example of KBA gone wrong, impacting at least 148 million people.
As you look for the right online identity verification solution for your customer ID proofing, it’s critical to perform rigorous tests to ensure the solution you choose is accurate, meets compliance requirements, and offers a positive user experience. The last point is key, as online identity verification is found to be a critical deciding factor as to whether customers complete a sign-up process.
In the online gaming industry, for example, a study found 1 in 4 online gaming customers were discouraged from opening an account due to a negative registration experience. This trend is also witnessed in other industries, such as banking. In fact, an overly long account opening process was found to be a key source of friction and was cited as the top reason for abandonment among online banking customers.
How can companies evaluate vendor solutions to ensure they meet their needs and those of their customers? Our infographic offers 14 ways to perform a competitive bake-off and rigorously evaluate the effectiveness of different vendors.
Originally published May 15, 2018; updated June 17, 2022