It’s hard to believe we’ve hit the halfway mark of 2022. Earlier this year, our CEO, Chris Luttrell joined Holly Hughes, CMO of BAI, for a fireside chat about critical trends and their potential impact, and how financial institutions can master the digital environment. The following trends uncovered in their conversation are just as, if not more, important today as we gear up for the second half of 2022.
Earlier in the year, we reported on best practices for deterring trending Synthetic Identity Fraud (SIF). While the threats are very real, financial services providers can work to deter SIF while also providing seamless digital experiences. By using additional attributes in the analysis of a consumer’s identity, our ExpectIDⓇ solution provides more information on potential risks associated with an identity without adding friction.
With the industry experiencing an estimated $50-$250 million in financial losses each year due to SIF, institutions need a way to deter trending threats. A robust IDV allows for a holistic view of consumer identity in high resolution, which is especially important in today’s threat-heavy environment.
Globally, nearly 1 billion people lack proof of identity. Of consumers without access to financial services, 20 percent cited a lack of identification as the reason. Without identity proof, these consumers can’t satisfy the KYC requirements for opening a financial services account. According to the Federal Reserve, 63 million Americans are either unbanked or underbanked. This lack of financial inclusion impacts minorities, immigrants, low-income, elderly consumers and young people with limited financial history.
Digital identity verification plays a critical role in unlocking financial inclusion and ensuring that every individual has access to affordable, high-quality financial services. With the right technology and oversight in place, financial services providers can verify individuals and give unbanked consumers access to the digital economy while also driving revenue.
With each year, the competitive landscape becomes more challenging for financial institutions. To win, financial institutions must meet consumer demand for personalized experiences that rival those offered by digital disruptors. In parallel to competitive pressure, consumer demand for more personalized experiences has also intensified. With nearly endless choices, ninety-one percent of consumers said they would be more likely to shop with a brand that recognizes them and provides relevant offers.
However, not all consumers are comfortable sharing personal information. IDology research shows that 70% of American consumers believe companies collect personal information without customer knowledge while 82% believe it’s important to trust a company to verify their identities effectively during account opening. While personalization offers the potential to forge a stronger connection, financial institutions can’t overlook consumer concerns about how organizations handle personal data. Balancing the need for data to support personalization with digital privacy concerns is a growing challenge.
Thirty-seven million Americans are considering switching financial service providers in the next 12 months. As we look to the remainder of 2022, the competition is high, but the opportunities are clear. However, competing with digital challengers, extending financial inclusion and earning customer trust begins with a solution that securely and quickly verifies customer identities, while also maintaining compliance.
At the same time, 49% of financial institutions cite verifying identities as their biggest challenge. It’s easy to see why. Without the right technology partner, adapting to shifting fraud trends, market dynamics and consumer preferences becomes an immense headache.
A multi-layered, robust identity verification solution will balance risk with modern digital consumer needs and expectations, orchestrating multiple dynamic data sets to not only detect and deter fraud but also deliver a seamless experience. Many of the world’s largest financial institutions rely on IDology’s multi-layered identity verification platform, ExpectID to build customer trust, streamline onboarding, minimize fraud risk and maintain compliance.
If you missed Chris Luttrell’s fireside chat with BAI, view the recording to dive deeper into top trends impacting financial institutions.