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This article was updated on August 24, 2023.
While the principle of “trust but verify” might work for personal relationships, “verifying before trusting” is a more appropriate approach for businesses. With consumers and companies leading more of their lives online, the use of online identity verification methods is becoming increasingly important.
According to Experian’s 2023 U.S. Identity and Fraud Report, 92 percent of businesses have a strategy in place for online identify verification. But more than half of consumers are either “somewhat confident” or “not very confident” in businesses’ ability to accurately identify them online.1 A streamlined initial verification process and continual authentication can help you build consumer trust and loyalty, as well as protect your business.
What is online identity verification?
Online identity verification is the process of digitally confirming the identity of a user. Whether you’re reviewing an account application or approving an online transaction, you need to know that the person you’re dealing with is who they claim to be.
Technology can help bring traditional identification verification methods online, such as checking a photo ID. Additionally, people and organizations have more digital “fingerprints” than ever before, which digital identity solutions can use to authenticate users with increased accuracy and less friction.
What problems do digital identity verification help solve?
A well-designed and implemented online identity verification process can help address fraud, compliance and customer demands all at once.
Verifying someone’s identity when they first create an account could be an important part of the know your customer (KYC) and customer identification program (CIP) requirements. From that moment on, continuous authentication can help detect and prevent fraud.
A proactive approach can also appeal to your customers, who may have an increasing awareness of and desire for security. Experian’s 2023 U.S. Identity and Fraud Report found that identity theft, stolen credit card information and privacy are top concerns when conducting activities online.1
Balancing the need for identity verification with a smooth online experience can be challenging. Customers may abandon a cart if identification requirements aren’t easy and fast, and may look for new services altogether if they’re repeatedly asked to authenticate themselves. But the challenge also presents an opportunity for companies that can leverage online identity verification services and methods to verify users’ identities accurately and discreetly.
Online identity verification methods
There are multiple ways to verify someone’s identity, but some of the most popular online identity verification methods include:
To keep up with increasing consumer and business demand, online identity verification processes may use artificial intelligence and machine learning techniques to complement the digital and manual processes.
Some methods, such as consistency checks on a device and behavioral biometric assessments, can also help offer an “invisible” approach to verification. Even small behavioral traits, such as a user’s scrolling style or finger pressure, could be important data points.
These invisible methods may be welcomed as a low-friction approach by consumers, who are increasingly aware of the lack of security that comes from only using passwords as an identity verification method. In Experian’s 2023 U.S. Identity and Fraud Report, 85 percent of consumers said they felt most secure using physical biometrics, followed by behavioral biometrics (81 percent) and payment or identity data from mobile wallets (80 percent), respectively.1
How Experian can help
Experian is a global leader in identity verification and fraud detection services. We offer a layered approach that draws on different verification methods, including credit, device, non-traditional and user-provided data. Step-up authentication can add additional verification requirements based on how risky a user appears or the action they’re trying to take.
The approach gives your trusted users a lower-friction experience while helping you detect multiple types of fraud and address CIP discrepancies.
At the same time, your customers are assigned a unique and persistent identity, which can give you a single, consolidated view of your customers based on data from different platforms. Using these insights from identity resolution, you can deliver a personalized experience that surprises and delights.
Given that 70% percent of consumers say it’s extremely or very important for businesses to accurately identify them online, doubling down on the use of online identity verification methods is a smart business practice.1
Learn more about Experian’s identity verification solutions and Experian VerifyTM.
1 (Experian). 2023 U.S. Identity and Fraud Report.