The new year is well underway and tax season is in full swing. For those in the identity industry, 2018 is not just a new year, it’s also a “new era” in fraud. We’ve seen a convergence of trends that has changed how fraudsters operate, and how we stop them. We looked at many of these trends in our recent Fraud Report, including the impact of massive data breaches, the adoption of EMV, and the growing prevalence of smartphones. The key takeaway is that in this new era, old-school identity matching (of credentials like SSN, date of birth, and address) is no longer enough to safely validate an identity.
While this is a new era in fraud, it’s also a new era in customer experience. Competitive pressure to lower friction has put companies in a tricky spot: they must make account opening and transactions easier, while still deterring fraud. With a smart, multi-layered approach to identity verification, however, companies can avoid the tightrope act.
Businesses need solutions that can leverage a multitude of data sources and powerful algorithms to create layers of identity attributes based on location, email, device, activity, and more. These layers help improve locate rates (the likelihood that an identity can be found and confirmed), even for “thin file” consumers with new credit histories. Because layers look at numerous attributes, they also help approve legitimate customers faster and behind the scenes, which reduces friction during onboarding and transactions. Lastly, a layered solution can deter sophisticated fraud schemes, such as synthetic fraud.
With all of these layers in-hand, businesses can also take a more nuanced approach when stepping-up to another level of authentication – which streamlines the process for legitimate customers. Instead of escalating each customer to the same authentication method (such as dynamic KBA), escalation can be done dynamically to send each customer to the optimal authentication method (capturing a photo ID, for example) on a case-by-case basis.
Furthermore, businesses can add yet another layer to their verification process by joining a collaborative network that shares fraud trends and data across companies and industries. Fraudsters often work together to share information, so it makes sense for businesses to do the same.
Check out our infographic for more information. If you’re interested in learning more about the protection that IDology’s smart, multi-layered identity verification and fraud prevention approach can provide for your company, while still offering your customers a quick and easy experience, contact us today.