By Christina Luttrell, CEO IDology
It’s hard to believe that we’re already rounding the corner to a new year. With 2022 upon us, we’re excited about the new challenges and possibilities that lie ahead and reflective of all we achieved alongside our customers in 2021.
In my second year as CEO of IDology, I’m grateful for our team, their tireless innovation and drive to transform new ideas into reality. We hit some tremendous milestones in 2021. It was a year of record-setting organic revenue growth as we were able to deepen our reach in key verticals including healthcare, age restricted, crypto and financial services. As the use of telemedicine surged during the pandemic, we helped provide trust and meet critical needs for pacesetters, including telehealth provider Secure Medical, in this rapidly growing sector.
Among the many enhancements to our ExpectID platform, the launch of Flex API, a leap in identity customization, was one of the most notable. With it, we give businesses the power to verify anyone, anywhere in the customer journey, from pre-verification to post validation using unique, specially curated identity attributes and workflows.
While the most meaningful accolades come from our customers, this year we are grateful to also receive industry recognition for IDology’s product innovation, claiming several awards including CNP’s Best Mobile Anti-Fraud Solution, American Business Awards Gold Winner for Identity & Access Security Solution, Global InfoSec Awards Winner for Next-Gen in Artificial Intelligence and Machine Learning and Most Innovative in Identity Verification, and finally, Finovate’s Best Identity Management Solution.
We continued to invest in industry-leading research that illuminates trends, capturing a unique 360-degree point of view and forward-thinking, in-depth views on fraud and identity verification from both businesses and consumers. The data from our Consumer Digital Identity Study and Annual Fraud Report provided valuable insights on the state of identity and fraud in the U.S. From that research, we know that 58 million consumers had a new account opened without their authorization in the last 12 months, a 21% increase compared to 2020, yet less than half of Americans know how to protect their data and identities. Accordingly, our research also revealed a 53% increase in fraud attempts across nearly every channel.
Our Consortium Intelligence Alerts increased 94%, illuminating a surge in industry crossover fraud as criminals conducted a growing number of serial attacks on companies in numerous verticals. In response, our consortium was expanded with the addition of new blue-chip enterprises from a diverse business base, making the industry’s premier multi-industry anti-fraud network even stronger and more dynamic.
Last month, IDology joined forces with one of our long-time partners as we welcomed Acuant to the GBG family. Together, we deliver the industry’s best end-to-end capabilities and an enhanced technology platform to support our network of partners and customers as they manage billions of global transactions across multiple industry sectors.
And finally, to support our customers in an economy that is increasingly borderless, we added more countries and regions to ExpectID as we continue building out the industry’s most powerful global identity verification platform. Fraud and Identity Verification:
What We Learned in 2021
The new year is a time of reflection and looking back, these trends stand out as predictors of what’s to come.
Across all Industries and Channels, Fraud Continues to Grow
Fraud attempts increased 53% across nearly every channel. Mobile was a top target, hitting new highs with an astounding 89% increase in fraud attempts. At the same time, 24% of consumers reported that their mobile devices have been compromised since the pandemic began.
We also saw Synthetic Identity Fraud (SIF) attempts persist, growing in number with each passing year. SIF continues to garner attention among businesses, nearly half of which are extremely or very concerned about this elusive and hard-to-identify fraud vector, recognizing that detecting and deterring it without adding unnecessary friction to the customer experience is no easy task.
Building Consumer Trust is Critical, Yet Complex
Consumers are aware of the growing potential for fraud. Ninety-six million Americans expect the number of fraud attempts involving their identity or accounts they own to increase over the next 12 months and 61% are concerned their personal information will be used by criminals to open a new financial account. Yet, they aren’t confident in the ability of companies to responsibly use and protect their data. Seventy percent suspect that companies gather data without their permission, and 59% don’t think companies do enough to safeguard the Personal Identifiable Information (PII) they possess.
More and more, consumer trust hinges on the ability of businesses to safeguard identities and keep consumer data private, particularly during online account opening and onboarding.
Regulation is Heating Up, Putting the Need for Transparency Front and Center
We’ve seen the term transparency used more often, especially as it relates to AI bias in financial decisioning. In April, the Federal Government issued an RFI for comment on financial institutions’ use of artificial intelligence (AI) and machine learning and several government agencies are reportedly working together to move toward the goal of uniformity and transparency. As this plays out, identity verification systems that deliver clear, explainable and defendable decisioning reasons will be critically important.
Looking Ahead: What Will 2022 Bring?
While there is no crystal ball, we expect to fraud to grow in the coming year and in response, regulations to tighten. As consumers face more options for the companies they engage with, they’ll become more empowered than ever, putting competitive pressure on businesses to deliver on streamlined experiences, particularly during onboarding. We expect the fusion of physical identity attributes with digital attributes to accelerate, perhaps helping to close the gap between mutual exclusivity of friction and fraud.
The need for orchestration of layers of identity attributes and verification methods to remove friction and deter fraud will grow. Data intelligence and diversity will remain critical inputs to an effective defense and customization of identity verification to meet the needs of the individual customer will intensify. This includes the need to tweak and tune identity verification in real time. Businesses will need the tools to anticipate discrete attacks, adapt to systemic changes in human behavior and respond to the emergence of new customer segments, profiles and needs.
As fraudsters continue to collaborate and share intelligence, notably on the dark web in sophisticated forums and marketplaces, networks of organizations across industries and around the world will gravitate towards the sharing of fraud intelligence. This will help to mitigate the impact of well-funded partnerships of criminals and nations who intend to inflict financial harm or pursue political agendas.
There’s no doubt that effective identity verification will play a critical role in detecting and deterring fraud, maintaining compliance and facilitating trust in the new year. We are proud to be part of the GBG family, which this year grew to 1,250 people working from 17 countries, with more than 21,000 customers, as we continue innovating to deliver the best in digital identity, location and fraud prevention. As Nick Brown, group managing director at GBG, sums up in his end of year post, we’re stronger together and looking forward to building on our collective momentum as we enter the new year.
Happy holidays from our family to yours.