In today’s competitive landscape, businesses have the capacity to save over 1 million USD for every 100,000 users being verified - with processes that mitigate fraud and reduce friction. Here’s how.
With digital platforms facilitating everything from ridesharing to renting out your home, companies from Uber to Google and Airbnb are redefining user experience. While the digital experience is tailored to be simple, quick and intuitive, users demand a more secure and streamlined process that could include a speedy digital identity verification process.
Nearly 4 out of every 5 customers trust organizations with their personal data - and believe that the businesses make the protection of their information a top priority. But it doesn’t just end with speed and a smooth user interface.
There are several risks to transactions in the digital space. Personal data of customers may fall prey to data manipulation and identity theft - with fraudsters gaining access to knowledge-based authentication (KBA) responses, enabling them to work their way around traditional forms of identity verification. Moreover, SMS-based two-factor authentication (2FA) is pitched as vulnerable and the National Institute of Standards & Technology no longer endorses 2FA as a secure identity verification channel.
However, organizations are concerned over the increasing number of fraudulent activities over recent years, with reports stating that global cost of fraud peaked to $3.7 trillion. This highlights the need for businesses to employ a highly secure identity verification process that authenticates users without friction.
But oftentimes, organizations find it difficult to tackle this - they are forced to add additional steps to digital identity verification processes to sift out legitimate customers and keep the fraudulent ones out. This creates more friction and the costs arising from this can be significant. Nearly 45% of potential customers abandon the process when friction comes into play.
So how do organizations find that sweet spot to balance friction and fraud?
It may prove to be a challenge - on one side, managing and curtailing risks can demand additional steps (think: friction) to ensure there is a secure identity verification channel and automatically builds trust and security into the system.
On the other hand, this could also impact customer acquisition, retention and revenue generation for the business since conversion rates may decline drastically and users may abandon the overall digital identity verification process.
Many current fraud prevention layers do very little to juggle fraud mitigation and increase customer success rates. This can force enterprises to redesign their overall customer onboarding process around fraud and risk management instead of prioritizing fast, simple digital identity verification process for the customer.
Most often, this can result in the companies succumbing to a “trust gap.”
Business aren’t confident about their ability to secure their platforms, including digital identity management solutions, from fraudulent activities or threat actors.
One of the bigger barriers is relying heavily on legacy technologies. The best way to tackle this today would be to tap into a highly secure digital identity platform like Passbase, that comes with privacy baked in and complies with the latest regulatory requirements.
Through a robust digital identity management system, users are assured that they will be able to exercise ownership and control over their data. A secure identity verification promises higher security, greater accuracy and convenience to the user. With a large-scale shift towards cloud storage and IoT, biometrics are critical to businesses developing their fraud prevention frontier, while significantly improving their customer-facing processes.
Instead of a business unit running manual checks for every verification, facial recognition and liveness detection technology can seamlessly perform the same transactions in less than a few seconds. This will essentially replace the human element that goes into digital identity management.
The cost savings? They're definitely hard to miss. Here's the data.
If your company sees authentication numbers climb to over 100,000 and spend nearly eighteen minutes to complete the process, Passbase’s digital identity verification will help enterprises eliminate the need to run this as an internal process and save over $1.24 million every month.
Moreover, when it comes to the regulation and compliance, an automated KYC process can wipe out onboarding costs by over 70% and turnaround time for clients reduced by over 90%.
Development organizations such as the World Bank’s IFC estimates that reducing friction and amplifying the benefits of a robust, secure identity verification platform can deliver three significant gains in addition to cost savings for the business:
1. Improvement in the accuracy and quality of risk evaluation - this mitigates fraud and money laundering activities, prevents corruption and tax evasion, and enhances the business’ operations.
2. Information processing at a much lower cost, making products and services more accessible to customers and profitable for businesses.
3. Improve data privacy and information management between businesses and client - bridging the “trust gap” and developing a stronger security firewall.
However, leveraging biometrics for authentication does not guarantee that it’s beyond the reach of hackers – interestingly, no single authentication method promises this.
True identity and access controls must rely on a combination of factors that combine biometrics, government-issued IDs and risk analysis.
Passbase enables a secure identity verification channel through facial recognition and liveness detection. This is made possible through a video selfie format, supported by government IDs. The digital identity can be re-used in the future across other platforms to prove the user’s identity - while giving the user more control over their identity, empowering them to choose what data to share and who to share it with. Learn more here.
In today’s hyper-connected world, leveraging a robust digital identity management system can solve several business challenges - be it rising costs due to friction or fraud.
“As security protocols transition to more data-driven, artificial-intelligence powered systems operating behind the scenes, businesses will need to gain and maintain the customer's trust without the familiar perception of security. Solutions that combine device information with other data points such as biometrics could help businesses in the future better recognize their customers rather than challenging them,” an Experian report highlighted.
Identity verification: Cost synergies without compromising user experience, security and privacy
Digital identity verification is a definite win-win for enterprises - particularly because it takes a multi-pronged approach, negating the flaws of the traditional authentication process and removing friction for the user and the business. With privacy baked in, digital identity providers like Passbase help enterprises reduce time invested into the process and redefines how identity verification and access management (IAM) works today.