As more services move to online platforms, customers and businesses risk having their personal information and finances compromised by more sophisticated fraud. Both customers and businesses should be concerned about these risks, but businesses are responsible for ensuring that customers aren’t in danger and avoiding subjecting them to pointless identity checks that can very much inconvenience customers. Both identity verification and authentication are necessary to lower the risk and likelihood of any situation, but it’s vital to realize that they are not the same thing. Businesses who don’t comprehend both and use them effectively put themselves at risk for increasing fraud losses and disgruntled customers.
Identity Verification vs. Authentication
Also known as identity proofing, identity verification makes customer accounts more secure than they were at the time they were created. Businesses have enough data to confirm a customer’s identity using their name, phone number, address, and email, establishing a foundation of trust. This data can then be compared to other forms of evidence, like bills from utilities or phone companies, to confirm that the information matches, helping to strengthen that trust. This procedure does not, nevertheless, guarantee that the data entered corresponds to the person who entered it. This is where authentication comes into play and explains why it is crucial: Criminals use stolen data to open accounts or apply for benefits in the victim’s name.
When compared to identity verification, authentication procedures are frequently more complicated and call for the person to go through a number of stages to confirm their identity. In order to verify an individual’s identity, some identity proofing systems may ask new users to provide a selfie and a government-issued photo ID. Authentication is a continuous identity-proofing procedure that verifies users’ identities as well as the accuracy of the devices they use. When requested to undertake two-factor authentication, such as inputting a one-time passcode to access their account, users frequently go through authentication procedures.
How Businesses Can Ensure Their Businesses Are Safe
Businesses and customers could be at risk because of the confusion between verification and authentication. Instead of giving two separate services, some solution suppliers combine the two, which furthers the misconception. Identity-verification tools can’t always guarantee that the person providing the identifying information is the true owner of it. A business becomes exposed to account takeover fraud and fake identities if it treats a verified identity (“the identity exists”) as authenticated or proofed (“the user is who they say they are”).
It is crucial for businesses to understand the distinctions and find solutions that address both processes in order to prevent expensive fraud losses. However, a good user experience shouldn’t be hampered by these extra safeguards. Customers will experience negative effects as a result of overly intrusive verification procedures, which could eventually result in customer churn (the loss of customers).
Keeping Customers from Having Poor Experiences
Authentication procedures must also be smooth in order to allow businesses to compete without suffering the negative effects of a bad customer authentication experience. A large body of business research backs up this assertion. According to a CMO Council study, 61% of customers indicate that their frustration with authentication has led them to abandon transactions that they otherwise would have finished. To add to that, two-thirds of customers said they would switch businesses for a better digital experience, according to TransUnion’s 2022 Global Digital Fraud Trends Report.
The Significance of ID Verification and Authentication in Trust Building
Identity verification and authentication are essential for businesses to maintain regulatory compliance, but they also contribute to trust building, which in turn creates the foundation for long-term customer relationships. Customers are more inclined to trust your business with their personal, financial, legal, or medical information if they have confidence in your verification and authentication procedures. People are more inclined to continue the onboarding process and collaborate with you in the future if you use technologies that can quickly and accurately validate user data.
It is the obligation of the business to make sure that customers interact safely and in a way that promotes trust without compromising the customer experience. For the best protection of customers, to prevent large fraud losses, and to guarantee a frictionless customer experience, businesses must implement both identity verification and authentication processes.
The Fate of Identity Verification
Digital identity verification is what the future holds. Customers are now eager to exchange digital identification documents with businesses that can protect their data efficiently, and many governments are experimenting with IDs like digital licenses and ID cards. As a result, online verification and authentication solutions are becoming more widespread. However, it doesn’t come to a halt there. The next generation of digital ID verification and authentication technologies will also make use of extra information like the user’s location and normal behaviors in order to confirm ID more successfully and combine cutting-edge algorithms in order to give real-time verification results.
Conclusion
A unified login authentication and authorization system, identity management, and seamless age verification are all provided by FTx Identity. Our user-friendly platform is suitable for businesses of different shapes and sizes and industries of all kinds—everything from grocery stores and gyms to tattoo parlors and nightclubs. At FTx Identity, we understand that the safety and security of your business and customers are paramount. That’s why you can count on us to provide reliable support throughout every stage! Ready to learn more about us? Get in touch with one of our specialists today to set up a consultation and demo!