Are You Who You Say You Are?
When it comes to identity verification, it used to be good eye contact and a firm handshake was all you needed. Today, things are different as many contracts are no longer signed in person, but rather electronically from the comfort of one’s own home.
While there are benefits to this, the anonymous nature of the online world can present all sorts of security risks for companies. Knowing there’s a real person behind an action being taken, and that they are who they say they are, is critical.
The key in protecting both the business and the customer is automated identity verification. While the marketing world typically reserves the concept of automation for things such as social media posts, email workflows and sales pipeline management, knowing who is on the other side of those sales is often just as important as making them in the first place.
What is Automated Identity Verification?
Automated identity verification is a process of electronically verifying a person's identity using a combination of technology and data sources. It involves the use of software and algorithms to compare an individual's identifying information (e.g. name, address) with data from trusted sources, such as government databases, and other publicly available records.
It’s used by a wide array of businesses to prevent fraud and ensure that only authorized individuals have access to certain services or information. Think of that information as the inside of a bar, and the processes involved in automated identity verification as a bouncer (if the bouncer was a robot).
At Which Points in the Customer Journey is Automated Identity Verification Used?
It’s crucial for businesses to be able to validate who their customers are, and there are several key points, depending on the industry and the specific use case, at which these checks typically occur.
Automated identity verification is most commonly used during the onboarding process when a customer creates a new account or applies for a new service. With automated ID verification for onboarding, businesses can quickly and efficiently verify a customer's identity without requiring them to provide additional documentation or undergo manual review. This can improve the overall customer experience by reducing friction and streamlining the onboarding process.
In addition, automated identity verification may also be employed when a customer updates their account information or makes a high-risk transaction.
Are There Different Types of Automated Identity Verification?
Automated identity verification comes in a lot of different forms, which helps to ensure both businesses and customers are protected from fraud.
Biometric Authentication
If you’re a fan of spy movies, then you’ve seen most of these in action. Biometric authentication is a method which uses an individual's unique physical characteristics, such as facial recognition, iris or retina scans, fingerprint, or voice recognition, to verify their identity.
Knowledge-Based Authentication
This method asks the user to provide specific personal information, such as date of birth, social security number, or mother's maiden name, to verify their identity.
If you’ve ever been asked to recount your childhood best friend’s name to log in to a certain account, and can’t quite remember which of your random friends you picked when you hurriedly signed up for an account 9 months ago, then you’ve experienced this type of authentication first hand.
Behavioral Biometrics
If your business wants to feel like it's on an episode of Forensic Files, then look into this method. Behavioral biometrics uses an individual's unique behavior patterns, such as typing rhythm, mouse movements, or touchscreen gestures, to authenticate their identity.
Document Verification
This method involves verifying the authenticity of a government-issued identification document, such as a passport or driver's license, through automated document analysis and comparison to known authentic samples.
What are the Benefits of Automated Identity Verification?
Automated Identity verification is helpful for reasons beyond, “it protects against identity theft and fraud”. It’s also important to note that the protections are for customers as well, not just the business itself.
For Customers
Improved Customer Experience/Increased Trust
Automated identity verification can provide a seamless and intuitive experience for customers, reducing the frustration and complexity that often accompanies manual identity verification processes. For example, it can reduce the time and effort required for customer onboarding as customers can complete the identity verification process quickly and easily from their own devices without having to visit a physical location or submit physical documents
Customers are also more likely to trust businesses that use advanced security measures, such as automated identity verification, to protect their personal information.
Peace of Mind
Through the use of advanced algorithms and technologies, automated identity verification can help to reduce the risk of identity theft by verifying the customer's identity in real-time and ensuring that only authorized individuals have access to sensitive information.
When customers see that a business values extra layers of security, it gives them an additional reason to remain loyal to them.
Cost
Automated identity verification can be more cost-effective for businesses, which can pass on the cost savings to customers in the form of lower fees or prices.
For Companies
Cost-effective
By automating identity verification, companies can reduce the cost associated with manual verification processes. This includes the cost of hiring and training staff, as well as the cost of maintaining manual verification systems. It can also reduce the risk of fraud and associated costs.
Increased Efficiency
Automating identity verification processes saves time and reduces errors associated with manual verification. This improves the efficiency of the customer onboarding process and reduces the need for manual intervention.
Better Data Accuracy
Clean data FTW! Automated identity verification can ensure that the data collected from customers is accurate and up-to-date, reducing the risk of errors caused by manual data entry and increasing the quality of data used for decision-making.
What are the Potential Drawbacks of Automated Identity Verification?
Although identity verification, and more specifically automated identity verification, provides a multitude of great benefits for both business and customer, there are some downsides.
Inaccuracies
It’s ironic that a system put into use to avoid misinformation can sometimes be the one generating it, but since automated identity verification systems rely on data sources such as government databases, which may contain errors or outdated information, it can lead to false positives or false negatives, which can create problems for both the company and the individual being verified.
In addition, when it comes to biometric authentication, a system may not recognize a person's face or voice due to poor lighting, background noise, or other factors.
Cost
While automated identity verification can be cost-effective in the long run, the initial investment in setting up the system and training staff to use it can be significant, especially for small businesses.
Bias/Discrimination
Automated identity verification systems may inadvertently perpetuate biases that exist in the data sources they use. This can lead to unfair outcomes and exclusion of certain individuals or groups. For example, facial recognition technology has been found to be less accurate for people with darker skin tones.
Technical Issues
I know this one is surprising since computers never have problems, but…
Like all automated systems, identity verification technology can experience technical issues such as software glitches, hardware failures, or connectivity problems. These issues can lead to delays in the verification process or errors in the results.
The Need For Protection
Businesses want to develop relationships with their customers and sell their product to them; customers want to purchase a quality product or service. Unfortunately though, the process is not quite that simple. Because fraud exists, businesses must take advantage of every available opportunity to protect their customers and themselves.
While the days of establishing trust with just a handshake may be over, automated identity verification tools allow both customers and businesses to feel confident in the security of their purchases and interactions.
