Good news if you’re thinking about using knowledge-based authentication

September 12, 2013 by Lloyd Laudorn

If you're looking to implement and deploy a knowledge-based authentication (KBA) solution in your application process for your online and mobile customer acquisition channels – then, I have good news for you!

Here’s some of the upside you’ll see right away:

  • Revenues (remember, the primary activities of your business?) will accelerate up
  • Your B2C acceptance or approval rates will go up thru automation
  • Manual review of customer applications will go down and that translates to a reduction in your business operation costs
  • Products will be sold and shipped faster if you’re in the retail business, so you can recognize the sales revenue or net sales quicker
  • Your customers will appreciate the fact that they can do business in minutes vs. going thru a lengthy application approval process with turnaround times of days to weeks
  • And last but not least, your losses due to fraud will go down

To keep you informed about what’s relevant when choosing a KBA vendor, here’s what separates the good KBA providers from the bad:

  • The underlying data used to create questions should be from multiple data sources and should vary in the type of data, for example credit and non-credit
  • Relying on public record data sources is becoming a risky proposition given recent adoption of various social media websites and various public record websites
  • Have technology that will allow you to create a custom KBA setup that is unique to your business and business customers, and the proven support structure to help you grow your business safely
  • Provide consulting (performance monitoring)and analytical support that will keep you ahead of the fraudsters trying to game your online environment by assuring your KBA tool is performing at optimal levels
  • Solutions that can easily interface with multiple systems, and assist from a customer experience perspective.

How are your peers in the following 3 industries doing at adopting a KBA strategy to help grow and protect their businesses?


  • 21% use KBA today and are satisfied with the results*
  • 13% have KBA on roadmap and the list is growing fast*


  • 20% use dynamic KBA*

Financial Institutions

  • 30% combination of dynamic & static KBA*
  • 20% dynamic KBA*

What are the typical uses of KBA?*

  • Call center
  • Web / mobile verification
  • Enrollment
  • ID verification
  • Provider authentication
  • Eligibility

*According to a 2012 report on knowledge-based authentication by Aite Group LLC

Knowledge-based authentication, commonly referred to as KBA, is a method of authentication which seeks to prove the identity of someone accessing a service, such as a website. As the name suggests, KBA requires the knowledge of personal information of the individual to grant access to the protected material. There are two types of KBA: "static KBA", which is based on a pre-agreed set of "shared secrets"; and "dynamic KBA", which is based on questions generated from a wider base of personal information.