Nov 2021 | Identity and Fraud |

We can no longer talk about the rising digital age because it’s already here and moving forward at a rapid pace. In the years leading up to Covid-19, many organisations had been investing in digital transformation programmes, but the pandemic has pushed every organisation into this space, even ones that had previously resisted the lure of digital channels. With physical branches closed and call centres overwhelmed during the course of 2020, anything that could be moved online, moved online, fuelling high demand for digital onboarding.


According to Juniper’s Online Payment Fraud report, it is expected that by 2025 close to 330 million new bank accounts will be opened through digital onboarding. This is compared to 184 million in 2020. For organisations to not just survive, but thrive, they require long term strategies that support it.


Why data is no longer enough


As many activities shift to online channels, one of the major challenges facing businesses is knowing with confidence who they are doing business with. It can be difficult to know for sure who is on the other side, whether they are real and if what they’re saying is true. With accelerated digitisation comes accelerated levels of threat. More and more data is readily accessible on the dark web to be purchased by criminals for fraudulent purposes.


Today, onboarding is more often than not, a faceless process and online channels can provide a perfect hiding place for criminals to commit fraud. Addressing these challenges can put strain on internal processes, which are still playing catch up for many businesses. Organisations are in a race to update their technology infrastructure while continuing to rely on manual processes that are data based. This can leave them exposed to fraud as the data being used to identify customers may have already been compromised.


It also happens to be an uncertain place for consumers, who have moved online in droves and now do almost everything digitally. Trust is key. Our 2021 Global Identity and Fraud Report revealed 55% of consumers globally say security is the most important aspect of their online experience.


Consumers expect organisations to keep their details safe online. They also expect an easy, friction free user experience and demand instant results. For them when it comes to their relationship with a brand, there is little room for mistakes.  


Additionally, regulation has become more stringent. To address customer expectations and demands, as well as meet regulatory requirements, data-based identity checks alone are no longer enough. 


The power of digital identity


As digital adoption increases, identities have become more complex. The traditional view of an identity – a name, address, date of birth and maybe a driver licence or passport – is no longer as simple. It now encompasses a person’s presence, interactions, behaviour, online profile and much more. While it may be more complex, it’s completely unique to an individual, making it the only way organisations can truly onboard new customers seamlessly, while keeping fraudsters trying to impersonate genuine individuals at bay.


It means there are now many more ways an individual can prove their identity to an organisation, giving them the confidence that they are dealing with a genuine, trusted customer. Digital identities have also opened opportunities for businesses to cast their nets far wider than before, with a more diverse offering, and at a faster pace.


Developments in artificial intelligence (AI) in areas like identity document verification and biometric face matching means that organisations can move from data based manual processes to a fully digital model of “know your customer” (KYC). For instance, customers can prove who they are wherever they are by just scanning an identity document and taking a selfie. Checks are automated with machine learning, allowing teams to focus on fewer, more complex cases.


To instil further confidence, an individual’s email address can also undergo fraud checks – looking at attributes such as age of email address, domain risk, associated IPs – to determine the potential level of fraud associated with that email and ensure the email is associated to the individual in question. Businesses also have the opportunity to use advanced behavioural insights to distinguish between genuine users and identity thieves. These are passive checks that do not interrupt the customer journey but do reduce fraud losses and enable organisations to stay ahead of more sophisticated criminal activity.


Businesses that are embracing digital data have been able to accept more customers with confidence, reduce dropout rates, mitigate against the risk of fraud, and give customers a faster, easier journey.


More significantly, it is demonstrating that digital data has an empowering nature. People who previously had difficulty proving their identity with data only methods, are now accessing products and services that were not available to them. These are the people that have traditionally been data poor, so struggled to prove who they are and have, therefore, been ‘invisible’ to organisations. As such, a digital identity is proving to be a force for good.


In the wake of the pandemic, digital onboarding has emerged as a critical capability


With regulators expecting organisations to put in place measures that ensure fair access for all and to truly know who they’re doing business with; businesses have a responsibility to make use of digital identities. This approach doesn’t just help them to be more efficient with their onboarding strategy, it supports and promotes inclusive identity, allowing the right level of checks to be performed against each candidate without adding unnecessary friction into the customer journey. Gone are the days of having to physically sign up in person for a new product. Brands that adopt and embrace a digital mindset will not only develop a more forward looking, sustainable and successful business, they will also cultivate two-way trust and a greater sense of loyalty with their customers.


Download our 2021 Global Identity and Fraud Report for more insights and trends, and take a look at our identity and fraud services to see how we can help protect your business from fraudsters at each stage of the customer lifecycle. If we can assist you in any way, please get in touch with us using the form below.


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