Identity theft is on the rise. With a number of recent high-profile data breaches affecting millions of consumers, security has become a topic of utmost interest for all businesses with access to sensitive consumer data. Accurate ID verification is increasingly becoming an essential component of Know Your Customer (KYC) regulations. By having the proper KYC technology and processes in place, organizations can benefit from not only remaining compliant, but also from increased confidence from consumers and clients that they are taking the steps to protect their personal information.
In a case of fighting fire with fire, the solution to the problem of ID theft lies in the very technology that facilitates it. Organizations are arming themselves with technology built solely for the purpose of protecting themselves and their customers from viruses, malware, and even traditional mechanisms for ID theft.
As identity thieves have grown more sophisticated, ID-verification technology has evolved helping to put stronger security measures in place to mitigate fraud. New tools have emerged to help companies unequivocally answer the question “Is this customer who they say they are?” before moving forward with authorizing a transaction.
Here are the top three trends taking ID-verification technology to new heights of sophistication, and what their implementation means for those in the ID-verification sphere:
2. Comprehensive integration
Fintech software development companies are becoming increasingly aware of the essential need for systems and tools to fully integrate with banks’ existing core technologies. Most organizations are not considering major changes to their core processors any time soon – it is often too expensive of an initiative to justify, and the potential ramifications of the decision, should the new iteration not work, make it a high-stakes move as well.
Therefore, the latest ID-verification technologies have been created with the requirement of integrating with current processors. As a result, potential issues with compatibility are discovered during extensive testing and dealt with during the prototype phase of product development. This ensures that ID-verification technology works as it should immediately upon implementation, rather than after months of resolving bugs created due to incompatibility issues.
3. Razor-sharp biometrics
Biometrics are a hot topic in the world of ID verification and are becoming increasingly powerful with every new iteration. Depending on the application, biometric technology allows users to verify their identities via geolocation, social media accounts, fingerprint, iris scan, and/or even facial recognition.
While the technology is becoming more and more prevalent across industries, its adoption on the consumer side has been arguably spearheaded by the innovative tech giant Apple® Inc. Fingerprint tech was the company’s most recent innovative rollout of biotech. The iPhone® 5s employed fingerprint technology to confirm ID and unlock the phone. While the new tech enjoyed a moment in the sun, it is slated to be overtaken by the facial recognition capabilities of the iPhone X, which advertisements claim can recognize a person’s face out of a million others.
Often, the most difficult part of successfully launching consumer-facing ID theft tech is convincing users to adopt the tech if it requires a change in their usual behavior patterns. It is worth noting that – as with fingerprint ID functionality – consumers will likely first be made comfortable with facial recognition through repeated exposure and use of it on their smartphones. Only after the feature is vetted and becomes mainstream will organizations likely roll it out as part of their own ID-verification processes.
Consumer concern drives demand for change
Forty-four percent of American consumers ranked ID theft and banking fraud as their top concern on FICO’s latest consumer finance trend. With ID theft costing banks upwards of one billion dollars per year,2 not to mention inestimable amounts of customer goodwill, preventing it is certainly a top concern for organizations as well.
As both consumers and organizations become more security conscious, more effective identity-verification tools are being created to meet the market’s needs. The culmination of the aforementioned trends is evidence that while ID security threats may be on the rise now, new technology is on its heels. The widespread implementation of these trends will ultimately equate to more secure in-person and online interactions – which will result in positive benefits for businesses and consumers alike.
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