Why is Identity Verification Important for Your Business’s Digital Strategy?
As the digital world evolves and the consumer market increasingly preferring to use mobile channels for shopping, payments and social interactions. As the digital presence of an average person grows, businesses feel the need to expand their online presence to increase their customer outreach. Banks too are improving their tech to allow better access to their services to customers. However, with the increasing digitization of business processes, the risk of online fraud increases just as much. As technology advances, cyber criminals have come up with more sophisticated techniques to trick consumers. Credit card fraud alone causes businesses over 5.5 billion dollars every year. This makes fraud protection services like identity verification an extremely important part of a business’s digital strategy.
As mobile devices become an important aspect of e-commerce sales, businesses also have to consider mobile e-commerce sales. Over a third i.e. 34 percent of online sales are represented by mobile e-commerce. Mobile banking is increasingly being preferred by customers as a number of banks are now providing remote bank opening services. But the question of frauds like identity theft and other cyber crimes still remains. Both enterprises and consumers are sufficiently concerned about the rapidly escalating fraudulent behavior. Of all the online fraud present in the market, nearly 21 percent is associated with mobile transactions.
The Role of Fraud Prevention in Your Digital Strategy
While building your digital strategy to attract and engage more customers is well and good, it is not of any real value unless you and your customers are protected against fraud. To capture a wider market to sell your product or service it is equally important to build trust among them. That trust cannot be established if your online channels are at risk of attracting fraudsters and cybercriminals. Digital marketers themselves should themselves promote the importance of implementing fraud protection in a business’s digital framework. Online identity verification services are one of the most effective
Where ID verification procedures are an important part of banks’ protocols to check for identity theft, to prevent credit card fraud e-commerce websites also need to authenticate their customers before approving their transactions. Not only online methods of user verifications safer and more accurate, but they are also faster and more convenient for customers.
Key Features for an Ideal Authentication System
Online and mobile e-commerce channels need to be fast, simple and user-friendly. An identity verification system that does not involve all such features could defeat the whole point of a customer using it. Some of the key features to keep in mind while implementing an identity authentication system include;
- Making the process of online purchase simple and efficient enough for the customer to keep them on the channel.
- Performing the process within seconds, if not in real-time, to make sure customers don’t abandon the process.
- Should have multiple layers to protect against spoof attacks.
- Should not require the customers to enter data on their own, as much as possible.
- Take place in the background so as not to annoy/ frustrate customers.
A digital mode for customer authentications needs to be designed for user convenience. Such a system can enable to even speed up to the whole customer onboarding process and guide customers through the buying process as quickly as possible. Moreover, not only are online identity verification systems faster, they are effective against fraudulent activity that may be directed at your online channel. More recently, certain governments around the world have imposed KYC (Know Your Customer) requirements and AML (Anti-Money Laundering) regulations on businesses that they need to fulfil in order to maintain safe business practices.
On channel customer authentication techniques allow customers to verify themselves without leaving the website or app they are using to purchase a product or service. Not only does this makes the whole process quicker for the user but increases customer satisfaction levels consequently. One major factor that digital marketers look for is user experience; if an online customer engagement channel does not have a good user experience, they would fail to retain customers. This would render the whole point of digitizing moot. Thus mobile ID verification procedures can increase customer satisfaction through a user-friendly experience that they can get through efficiently.
How Does an Identity Verification System Work?
More than anything, both a business as well as the user needs to understand how an online identity authentication system works. For instance, if a customer comes to your e-commerce website to purchase a product or service, you have no way of telling if they are who they claim to be or are using fake credentials for financial gain. An online identity verification system allows you to verify that person by asking them to verify their details through ID document scans and facial recognition.
The document scan will verify the details of an individual – name, DOB, age etc. – against the ones, they have entered. Online facial recognition will further verify if the customer is the same one as in the ID documents. Additionally, once the customer scans their document(s) the software uses OCR (Optical Character Recognition) technology to enter their details automatically into the system for verification.
A business can use multiple layers of authentication for customers that allow them to protect themselves from spoof attacks and authenticate an individual accurately and without any errors. While banks and financial institutes are gradually moving towards more tech-oriented solutions to ease their client onboarding and reduce fraud, the retail sector should also consider the benefits of an online verification system for customers. Businesses, and particularly e-commerce sites, are some of the adverse victims of crimes like identity theft and credit card fraud. An effective verification system can help them to identify legitimate customers from fraudsters. To prevent credit card fraud e-commerce merchants need to consider the lasting benefits of such fraud prevention solutions in their digital strategy. Not only can it decrease fraud but help them attract more customers, consequently increasing sales.