The online environment of identity management has become more dynamic than ever before. It is an interactive and flexible system that has made it possible to establish and manage digital identities. These components are crucial in serving as authentic proof of identity to access contemporary sharing systems like digital banking, e-commerce platforms, travel services, and much more.
As AI-centric solutions keep expanding to reach out to larger audiences, serving more customers, and securing businesses, challenges in the process of digital identity verification have become quite serious. Maintenance of higher security standards in combination with meeting strict regulations is one of the most common challenges that businesses tend to face in the modern era.
Businesses Facing Customers’ Identity Verification Problems
It is estimated that around 49 percent of businesses face challenges with respect to the verification of the identities of new customers. Around 16 percent of businesses reveal that verification of the identities of new customers is one of the most pressing hurdles to the overall operations. Another 33 percent of businesses reveal that while the challenge is important, it is still not the most significant.
To help with the verification of identities of new customers, businesses all around are making use of a new range of tools as well as methodologies. These tools and processes are both manual as well as automatic.
Around 73 percent of businesses make use of a common procedure for ensuring identity verification. It is known as payment card verification. It is a leading anti-fraud mechanism while executing businesses online. Some of the other common methods that are used by businesses all around are automated web monitoring, transaction anomalies, automated underwriting systems, address verification solutions, and document identity verification.
Organizations that make use of automated and proactive anti-fraud mechanisms are most likely to take into consideration all existing anti-fraud mechanisms as equally significant to overall security. The manner in which organizations feel about the respective approaches to prevent fraud reveals how they are evaluating the success of the ongoing method. It also helps in determining the overall urgency of the needs of businesses to address common security-related fraud.
In current times with higher levels of uncertainty, sustainable growth is crucial for modern businesses. Fraud has been successful in extracting a major toll on the viability of multiple businesses..
Common Challenges of Identity Verification That Businesses Face
Some of the common hurdles in online identity verification as faced by organizations to perform efficiently and secure online transactions are:
Presence of Expensive and Inefficient Identity Mechanisms
Available as a digital service, the process of online identity verification is gaining traction all around. There are multiple variants of digital identification processes and the manner in which identification is carried out. The basic concept behind the screening process of identities is quite simple. However, as the number of online transactions has increased significantly in the overall volume and complexity, the aspect of online identity verification has developed into a major one.
For different channels and sources, users mostly remain uncomfortable in offering details for screening reasons. In most cases, basic identity credentials, including name, address, and official ID number, are not sufficient for recognizing an individual and developing relevant profiles. Therefore, for gathering relevant data, service providers are expected to act in a responsible manner while making the process of identity verification highly transparent.
Redundant Digital Identity Verifications
Performing efficient, accurate, and user-friendly identity verifications is crucial towards maintaining a stronger customer base. It also helps in establishing a brand as a reliable service provider. This highlights the integration of a dynamic identity verification process for performing repeated verifications and engaging larger target audiences.
Fraud preventions with the help of KYC processes are highly relevant in the context. Checks related to ongoing monitoring also involve checking customers on an ongoing basis for reliability and authenticity.
Keeping up with the ever-increasing demands of online identity verification and serving to higher volumes is an important part of any existing business model. Customers keep looking for specialized services delivering the least friction and the highest level of serviceability and trust before presenting personal information.
Collection of PII or Personally Identifiable information
Tracking individual identity is an important part of the entire verification process. It will require dedicated data points to be cross-checked and matched for improved accuracy. It includes the collection of PII or Personally Identifiable Information. It is crucial for organizations to collect, while also making customers uncomfortable. Delivering data and basic credentials on the overall credit history helps in opening up a wide range of security-related risks. It leads to the exposure of personal data to potential threats of digital hacks.
Delivering the assurance of maximum security levels and ensuring risk management will require professional identity experts to look into different methods of data collection used for digital ID verification. Users should impose effective control over respective data collection processes and the use of important personal details for digital validations.
Unavailability of Data
For ensuring improved service standards and higher security are achieved effectively, organizations will be required to look into relevant solutions for digital database development. Personal documents and credentials are expected to be cross-checked with official databases developed by state authorities. When such data sources are absent, checks related to identity verification cannot be carried out for authentication purposes, or might be refused access.
As such, analyzing that some individual is actually who he or she claims to be, will require scoring data points. All these data points should be verified against some reliable source before the same can be applied to delivering digital services.
Opportunities related to online identity management depend on coming across the right solution for the right users. It includes extending help towards effective dispute management. On a long-term basis, digital identity verification tools should be capable of delivering ample usability.