Food delivery to your doorstep, ride sharing to work, having someone come home to water your plants while you’re away- all it takes is a few swipes on the mobile phone to get any of this done. However, that’s not all these acts have in common. When you opt for services online, you do not know the person you will be dealing with and are forced to trust a stranger. Trust goes both ways. The driver you’re sharing a ride with and a person coming to your home to deliver something also trust you.
Since you cannot go about verifying the identity of each person you interact with, the onus falls on online marketplaces to build trust and ensure the safety of their clients through online identity verification.
Reputation Building For Marketplaces
It takes one customer to have a bad experience with a service provider on a marketplace to give the entire platform a bad name. According to a recent study, 89% of consumers believe that a sharing economy can flourish only if there is trust between the providers and users. By 2021, the sharing economy is forecasted to have 86.5 million users.
For an online marketplace to build a reputation as a trustworthy platform, it must verify the identity of all its employees and service providers. The marketplace must take responsibility that the person they are sending to your home is reliable. Simultaneously, they must also vet the customer’s identity to ensure the safety of their employees who interact with these customers.
Today, consumers don’t just hire one-time services online, they also execute substantial financial transactions online. Criminals could steal information and create synthetic identities to bypass security measures. Thus, businesses and financial platforms must be able to ensure that their customers are who they claim to be, even though they cannot directly interact with them. At the same time, they must secure a customer’s onboarding process without inconveniencing him or her.
According to a report, account takeover fraud, a result of identity theft was a significant percentage of total online fraud in 2017. As many as 16.7 million people had their identities stolen and used fraudulently. This contributed to a 120% year-over-year increase in losses.
Countering The Inadequacy Of Traditional Identity Verification Methods
The most common methods used to traditionally verify identity online is knowledge-based authentication (KBA) and two-factor authentication (2FA). However, both are inadequate. KBA relies on the customer’s answer to a question that is considered private. However, with social media blurring the lines between public and private aspects of our lives, this knowledge can often be easy to acquire.
For example, a customer may publish his mother’s maiden name on a social media post congratulating his mother on her birthday. Similarly, 2FA relies on information that can be easily accessed by criminals through mobile network data interception or phishing attacks.
This system also works only if the customer has a smartphone through which the 2FA process can be completed. Hence, it is not universally available to everyone. Further, I such situations, if a customer loses his or her phone, the service provider would need to re-authenticate the user’s identity thus adding to the consumer’s frustration.
The Only Solution: Digital Identity Verification
Digital identity verification solutions help businesses and online marketplaces streamline the customer onboarding process. An efficient verification system simplifies the process of customer identity verification while accommodating their busy lives. For businesses, it optimizes customer conversions, protects data and deters potential criminals without any added friction. 5 ways in which it can mitigate risk and achieve a greater level of assurance are:
- Document Verification: Documents such as utility bills contain information that can be used to cross-check a person’s identity. Identity verification systems can extract this data and put them in the appropriate columns to reduce form, fill errors and add another level of identity verification.
- Artificial Intelligence
Machine learning and artificial intelligence can play an important role in determining the authenticity of a customer’s online identity and providing continuous security.
There are a number of official databases where information about a customer may be recorded. An API can confirm a customer’s identity on an online marketplace by cross-checking the data entered with the information stored in these official databases.
- Biometric Comparison
Given that even government-issued IDs can be forged, customers can be asked to submit a selfie or a video of themselves with the ID. In such instances, liveness detection can help ensure that the selfie is legitimate and that the user is physically present.
- Offline ID Comparison
Government issued Ids such as passports, driver’s licenses, and voter Id cards are still the most trustworthy form of identity verification. Information on these forms of ID can be easily used to verify a customer’s online identity.
Whether you talk Online or the offline, trust is the key or you can say foundation of a business. Let us take the right measures to verify identities and build trust among users.