At its core, the concept of identity proofing seems simple. Identity proofing is the means of verifying and authenticating the identities of legitimate consumers, while preventing fraudsters from creating account credentials, transacting or gaining access to unauthorized accounts. But this is where the simplicity ends, and where the balancing act of delivering the modern, friction-right experience that consumers demand against the risk of fraud, begins.
As data breaches have grown in size and scope, the vectors of attack have evolved as fraudsters obtain large amounts of information. Exposed consumer PII records are up 33%, with 7.9 billion records through Q3 2019 over the same period in 2018.
At the same time, the adoption of transacting within digital channels by consumers has been steadily increasing. The COVID-19 outbreak has placed unprecedented demands within this channel, and exposed unprepared organizations that find themselves scrambling to respond.
It’s true that many companies are not prepared to confront the issues created by these new realities. As new threats have emerged, organizations have deployed a patchwork of often disconnected solutions that rely solely on traditional data sources, forcing a trade-off between customer experience and fraud prevention.
Nearly every company has taken measures to assure some level of certainty of who they are doing business with, driven in part by regulations and rules such as Know Your Customer (KYC) guidelines. But many others have been hesitant to go beyond the minimum compliance requirements, since acquiring a customer is challenging enough without inserting additional friction into the fraud prevention process. Some organizations are even willing to accept some level of fraud, simply writing it off as the cost of doing business.
Combating today’s evolving threats while being ready for the unexpected is no longer a choice – it is a necessity. This is a complex challenge that can be solved, but it requires a holistic solution to effectively do so. To understand the scope of what’s required to be successful industry analyst, Gartner has recommended that organizations take a multi-prong approach which includes:
- Continuous risk assessment from acquisition through the ongoing customer relationship
- Multiple identity proofing solutions and data sources working together via an orchestration platform, including knowledge-based authentication (KBA), device attributes and reputation, document-centric authentication, behavior analysis and link analysis
- Compliance with local and industry regulations
Fortunately, it is possible to deliver a great experience for consumers without having to compromise. Watch our recent webinar, The Business Imperative for Identity, Trust and Data Stewardship, to hear data and identity expert Bianca Lopes discuss the evolution of identity proofing, and reveal how businesses are approaching identity verification as social distancing creates an absence of face-to-face interactions.
Risk Based Security Q3 2019 Data Breach QuickView Report