Due to the influx of online activities, business transactions no longer work like it used to. Sellers and consumers no longer have to face each other. Direct contact between the two parties is no longer required. Because of this, incidences of internet fraud increased during the last decade. Businesses lost billions of dollars in revenues annually.
This problem called for a more reliable identity verification process. But some companies remain uncertain about verifying the identity of their customers for fear of irritating their clients with invasive questions. Fortunately, there are new practices in digital identity verification that can help businesses avoid fraudulent deals.
Here are some of the latest trends in the ID verification process that businesses can avail today.
More Rigorous Regulations
The identity verification regulatory authorities now follow stricter rules to comply with the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act in Australia and its equivalent agencies worldwide. They also recommended boosting the Know Your Customers (KYC) procedures. These authorities always make it a point to implement more stringent measures to curb down the increasing rate of financial crime.
Just recently, the Financial Action Task Force (FATF) widened the scope of reporting entities and asked its member countries to compel art dealers, legal professionals, and online asset dealers to do the AML screening on their patrons. The suggested AML screening procedure is comparable to the one implemented by established financial institutions.
Technological Advancements
Since the world is gearing to move towards reinforcement learning, companies get the encouragement to put their money on technical substitutes for substantial compliance policy. This practice also prompted more businesses to look for more advanced identity verification solutions with artificial-intelligence assistance and backed with biometric technology. Based on a recent study, about 90% of all businesses will take advantage of this biometric technology in 2020.
Smarter Customers
In a previous survey commissioned by Visa, 86% of customers also aim to use biometrics so they can verify their identity instead of using conventional passwords. Because of this, digital identity verification solutions offered by electronic identity verification service providers invest in technologies to incorporate more reliable visible security measures. It will reduce the number of standard security measures that usually annoy the customers and increase the cart abandonment rate of the business.
More Pressure To Implement Customer Rights
In the US, the state government of California launched the California Consumer Privacy Act (CCPA) for the benefit of customers when dealing with personal data. It allows them to gain access to their data and have it deleted when needed. The industry also calls it the General Data Protection Regulation (GDPR) lite because of its strict data protection policies. Both the CCPA and the GDPR work on international businesses with an address in their area of jurisdiction. As a result, the two agencies have a global impact on all transactions. They also share the responsibility of reporting questionable entities.
Digital Identity Verification Beats Manual Verification
The primary reason behind the emergence of the identity verification industry is the advanced solutions needed by AML and KYC when screening the customers. The results are highly accurate and delivered in actual time. The ID verification service providers also provide proof of verification together with the results. Because of this, more businesses that availed this service can get more accurate data about the identity of their customers.
Since businesses need to recognize who they have to deal with all the time, a reliable identity verification system will work for their advantage. If they want to avoid more losses in the future and protect all their business interests for as long as possible, getting the services from ID verification providers could be a good investment on their part. It will help them become more vigilant in protecting their business from shady transactions.