With the digital age in full swing, it's more important than ever for marketplaces and digital platforms to ensure that their customers are who they claim to be. Achieving this requires the use of identity verification solutions, which have become increasingly sophisticated in recent years. By leveraging the latest identity verification solutions, platforms can benefit from improved security and customer experience, as well as the potential for increased growth. When implemented correctly, identity verification can be a powerful tool for driving success in the marketplace ecosystem.
What are the latest identity verification trends?
Identity verification has become an essential component of trust & safety, as the need for secure and reliable customer authentication has grown. Some of the latest identity verification trends involve using a combination of linked and layered signals, including government-issued identity documents, identity graphs, device fingerprinting, and biometrics. The combination of these methods allow marketplaces to verify a customer's identity holistically with a higher degree of accuracy and security than ever before.
In the past, some identity verification services relied on manual processes but advances in artificial intelligence (AI) and machine learning (ML) technologies have improved automation while increasing the accuracy and security of identity verification. AI and ML is used to analyze customer data, detect fraud or suspicious activity, and take proactive steps to prevent identity theft.
In addition, blockchain technology is emerging as an option to securely store and manage customer identity data. Verifiable credentials and blockchain technology allows for tamper-proof storage and sharing of data, making it ideal for identity verification. By using blockchain technology, digital platforms can ensure that customer data is safe and only accessible to those with the necessary authorization.
Benefits to leveraging identity verification?
While there are a variety of benefits to leveraging identity verification, here are three to consider:
Improve Security: Identity verification can be used to improve the security of customer data and accounts. By verifying customer identities, platforms can ensure that only authorized users are accessing their accounts, reducing the risk of fraud and identity theft.
Better Customer Experience: Identity verification can be used to improve the customer experience. By verifying customer identities, marketplaces can ensure that customers are who they say they are, helping to build trust and foster customer loyalty. Additionally, identity verification can help to streamline the customer onboarding process, making it easier and faster for customers to get started using the platform.
Cut Costs: Identity verification can also be used to reduce operational costs. Automated customer verification reduces the need for manual customer onboarding processes, which can save time and resources. Additionally, platforms can reduce fraud loss and other liabilities, which will save them money in the long run.
Tips to implementing identity verification
Implementing identity verification can seem like a daunting task, but with the right approach, it can be relatively straightforward.
First, marketplaces should define their ideal customer onboarding journey and the data they need to collect when verifying customer identities. This could include personally identifiable data (PII) needed for compliance purposes or other data like government-issued documents, device or location data, or biometrics.
The next step is to develop a progressive identity verification strategy that maps the customer journey against compliance and fraud risks to determine the mitigating actions they will take to verify customer identities. Balancing risk and user experience is important as too much friction prevents good customers from good through.
Finally, marketplaces then implement a secure identity verification process. This includes measures to ensure that customer data is secure and only accessible to those with the necessary authorization. Plus, online marketplaces should also ensure that their identity verification process is compliant with any relevant regulatory requirements including data protection, privacy, and biometric information laws.
The importance of customer experience
When implementing identity verification, it's important for platforms to keep the customer experience in mind. The goal of identity verification should be to ensure that customers are who they say they are, without creating an overly burdensome process or too much friction. To achieve this, digital marketplaces should ensure that the identity verification process is fast, secure, and easy to use.
Finally, platforms should use qualitative and quantitative customer feedback to continually improve their identity verification process, ensuring that it meets customer needs and expectations.
Regulatory considerations with identity verification
When implementing identity verification, it's important for marketplaces to be aware of any relevant regulatory requirements for the geographic markets they serve. Depending on the jurisdiction, there may be specific customer authentication, data protection, and data storage requirements that must be followed. In addition, there may be other regulations such as Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations that must be adhered to country-by-country. As an example, the new United States INFORM Act requires online marketplaces to perform a KYC–like check on high-volume third-party sellers.
How to develop an identity verification strategy
Developing an effective identity verification strategy is an essential step for marketplace and digital platform trust & safety. The goal of the strategy should be to ensure that customers are who they say they are,detect and prevent fraud, while also keeping the customer experience in mind.
To develop an effective strategy, organizations should consider the following steps:
Identify the data needed to verify customer identities.
Develop a process for verifying customer identities against this data.
Implement AI and ML to detect fraud or suspicious activity.
Implement a secure identity verification process.
Ensure compliance with any relevant regulatory requirements.
Use customer feedback to continually improve the identity verification process.
By following these steps, platforms can develop an effective identity verification strategy that meets customer needs and expectations, while also ensuring compliance with any relevant regulatory requirements.
Don’t Go it Alone
Marketplaces and digital platforms have revolutionized the way we interact, shop and do business. However, with increased convenience and accessibility comes the risk of fraudulent activities and identity theft. This is where 3rd party experts and technology solutions come into play. Such solutions use advanced algorithms and machine learning to detect and prevent fraudulent activities, ensuring a safe and secure marketplace experience for users. Additionally, human experts can provide additional layers of verification, such as document review and biometric analysis, to help prevent fraudsters from slipping through the cracks. By partnering with 3rd party experts and leveraging cutting-edge technology solutions, marketplaces and digital platforms can effectively manage the risks associated with identity verification and provide the best possible experience to their users.
Identity verification is a cornerstone of online security. When implemented properly, it can help to protect against fraud and identity theft, as well as streamline customer onboarding. Identity verification can also be used to drive customer loyalty and improve customer experience.
When implementing identity verification for the first time, it can be tempting for businesses to go it alone. The truth is that identity verification should be implemented with as little friction as possible for both customers and staff, and getting experts involved is usually the best path forward.
By leveraging the latest identity verification expertise and platforms, marketplaces can benefit from improved security and customer experience, as well as the potential for increased growth. With the right approach, identity verification can be a powerful tool for driving success in the digital marketplace. Want to connect with today’s top professionals in identity verification? Download the Marketplace Risk Community App to access the latest content and connect with industry leading experts.