Identity Proofing: What a Business Needs to Know

In today’s mobile and digital world, it is becoming harder and harder for an organization to know your customer is who they say they are. Significant data breaches, phishing scams and scandals are in the headlines every day. Identity proofing is the first step in establishing the authenticated identity of legitimate customers. Thwarting identity fraud and weeding out fraudulent users should be a top of mind priority for all organizations to make sure that your systems, your customers’ data and their trust remains secure.

How Does Identity Proofing Work

Until recently, identity proofing has often relied on paper-based documentation and in-person identity checks. This process can be expensive, tedious and does not allow an organization to respond quickly to today’s demands for immediate customer onboarding. More advanced identity proofing processes that can work anywhere are a must reaction to the growth in online business services and rapid increase in online fraud and scams. An abundance of new industry and government compliance regulations are also demanding that organizations do more to combat these attacks and protect the privacy of their customers.

Identity proofing methods should be enacted prior to an organization issuing customer credentials or an account to ensure that the customer is legitimate from the very beginning of the relationship. In addition to securing data and information from fraud, this initial Know Your Customer (KYC) vetting of a customer is the foundation for establishing trust within the client/customer relationship.

There are a variety of KYC methods available for organizations to use to verify the identity of the customer on the other end of a call, online chat, or even in-person. The best verification methods use multiple levels of identity proofing to ensure security while also making the experience as seamless and user-friendly as possible for the customer. The KYC methods must be flexible and adjustable so that organizations can define their security levels as regulations change and fraud schemes evolve.

Methods of Identity Proofing

Some Identity Proofing methods include:

  • Two-Factor Authentication (2FA): Uses two methods of identity verification, an extra layer of security, to authenticate the customer’s identity. For example, a password or username AND a code sent to an email or phone, etc.
  • Knowledge-Based Authentication (KBA): Uses a security question or password to authenticate – something only the customer should know.
  • Biometrics and ID Checks (Passport, Driver’s License, etc.): Uses a selfie to match a government-issued identity document (ID) to the customer. Can be used remotely and ensures that the person holding the ID is the person pictured and/or defined by the ID. Biometrics is the one thing that cannot be stolen.

While these methods support online or digital identity verification, they can also be used as a part of an in-person employee or customer onboarding process. Identity proofing solutions can be applied across industries including financial services, card issuing, healthcare, education, technology providers, gig-economy companies, membership and fitness clubs. Identity proofing should support a variety of use-cases including verification of online retail or banking customers, onboarding of new employees and students, and age confirmation for sale of age-restricted products.

Benefits of Identity Proofing

The verification of a customer’s identity on first engagement has repercussions across the entire lifecycle of the client/customer relationship. New digital identity verification methods enhance your first engagement with your customer. Mobile and remote onboarding has become widespread as customers want immediate gratification and do not necessarily want to trek all the way to an office to email, show ID, or make photocopies that can be easily lost or stolen. Today’s remote identity proofing experience is more user-friendly and decreases the friction of old-school onboarding and account set-up processes.

In addition, as you service your customers with each subsequent transaction, the initial identity proofing will ensure that an already onboarded customer is the one that is ‘accessing’ a system, requesting an account change, or making a valued purchase. By ensuring that the customer is who they say they are from the first interaction, organizations can combat fraud, streamline customer service processes, delight new customers, and increase revenue.

Upgrade your Identity Proofing Solution

Looking to add an identity proofing solution to your business operations portfolio or upgrade your current system? Proof by Ipsidy is a mobile biometric identity proofing solution that allows you to check an official ID in seconds, from anywhere in the world. Verify the identity of anyone, using government-issued credentials and biometrics from a convenient mobile app. Streamline business operation and reduce processing time on applications, enrollments, and account openings with Proof by Ipsidy.