What Is Identity Verification?

While the principle of “trust but verify” might work for personal relationships, “verifying before trusting” is a more appropriate approach for businesses. According to Experian’s 2024 U.S. Identity and Fraud Report, consumers ranked identity theft as their top online security concern. As consumers conduct more activities online, the use of digital identity verification methods is becoming increasingly important. In this article, we explore how a streamlined initial verification process and continual authentication can help you build consumer trust and loyalty, as well as protect your business. 

What is 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 do online identity verification methods 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. 

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. 

Examples of online identity verification methods 

There are multiple ways to verify someone’s identity, but some of the most popular online identity verification methods include: 

• Personally identifiable information. Including their name, address, email address and phone number that can be checked against existing databases. 
• Mobile network operator data. A service that verifies a person’s mobile phone identity. For instance, this can help verify the name, address, device details and other information associated with a phone number. 
• Document verification. There are services that ask consumers to snap and upload a picture of the required document, like a driver’s license, passport, visa or national ID card. These may be verified with 2D or 3D facial recognition with liveness detection (e.g., verifying the user is human) or validating whether the document is real by verifying things like magnetic ink, the machine-readable zone and the barcode are genuine.
• One-time passwords. A one-time password is sent to a user’s phone or email during an application process to verify that they can access the account or device.
• Multifactor authentication. A service for existing users who can verify their identity with a combination of different factors, such as a password or biometrics (a method that measures unique physiological characteristics using fingerprints and face recognition).
• Knowledge-based association questions. These are questions that users answer to verify their identity. The questions may be based on their previous answers to “secret questions” or information from a credit bureau.
• Behavioral analysis. A service that verifies identity by comparing how a user interacts with a website or app to their previous behavior or an average user’s behavior. Environmental attributes, such as time and location, may also be considered. This technique requires no effort from the consumer.

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 2024 U.S. Identity and Fraud Report, 71 percent of consumers said physical biometrics are most important for a better online experience, followed by PIN codes sent to a mobile device (70 percent) and behavioral biometrics (66 percent).

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.

Learn more about Experian’s identity verification solutions and Experian Verify^TM.