It’s a common refrain that the COVID-19 era has accelerated digital transformation trends. According to a 2021 J.D. Power study, 41% of banking customers are now digital-only, up from 30% prior to the pandemic.
One of the biggest hurdles of digital transformation many businesses face is truly knowing the identities of their end users. Know Your Customer (KYC) is the mandatory process institutions use to verify the identities of their customers and ascertain what fraud risks they may pose. Banks and other financial institutions, including credit card companies, insurance agencies, crypto exchanges and even online gaming sites are required to go through a number of identity proofing steps in order to ensure their customers are not involved with corruption, bribery or money laundering.
But the need for KYC-type identity proofing goes well beyond financial services. Healthcare organisations need to know their patients so they can reliably deliver telemedicine and prevent prescription fraud. Gig economy companies often need to verify their drivers as well as customers as a matter of trust and safety. Online dating sites increasingly have to verify the identities and ages of their users in order to protect them from harm and online fraud. And even financial institutions want to “know your transactions” to ensure they’re taking every precaution to detect trends that may indicate money laundering.
In fact, it’s hard to think of any modern enterprise that isn’t seeking a higher assurance related to the identity of their online customers, considering the following trends:
- Data Breaches: Over the last two years, we’ve been inundated with news stories of large-scale data breaches where hundreds of millions of records, including name, email address, username, password and other personal information have been hacked.
- The Dark Web: Digital identities, including passports, driver’s licenses and ID cards, along with matching selfies, can be purchased on the dark web for just a few dollars. The anonymity of bitcoin and massive data breaches have led the dark web market to flourish.
- Regulatory Hurdles: The fines for non-compliance keep getting higher and higher. Just in 2020, financial organisations were penalised with $10.4 billion in global fines and penalties associated with KYC, anti-money laundering (AML), data privacy and Markets in Financial Instruments Directive (MiFID) regulations.
- Traditional Data-Centric Methods: The rampant theft of PII via large-scale data breaches continues unabated. Thanks to the dark web, criminals can attack static data verification methods and impersonate legitimate consumers to obtain their credit and public records, thus gathering a robust set of information to circumvent most data-centric verification tools.
- Digital Transformation: The COVID-19 pandemic has accelerated digital transformation, leading to a renewed focus on the digital onboarding process as a critical requirement for doing business.
While banks and other enterprises are looking for ways to streamline the onboarding process, they must ensure that they build in the necessary safeguards to protect their ecosystems, reputation and account owners.
Because many organisations rely on more than one identity-proofing method, it’s increasingly imperative for enterprises to intelligently orchestrate across these different capabilities.
By 2023, 75% of organisations will be using a single vendor with strong identity orchestration capabilities and connections to many other third parties for identity proofing and affirmation, which is an increase from fewer than 15% today, according to the 2020 Market Guide for Identity Proofing and Attribution.
The Jumio KYX Platform combines data from a variety of sources to build a complete digital profile and risk assessment of your remote users (whoever the “X” is in your business).
The platform’s new intuitive, no-code orchestration layer unifies an entire set of risk and fraud detection capabilities to address identity proofing, compliance verification and AML use cases. The platform now provides multi-layered, end-to-end risk detection with flexible workflows, increasing visibility by showing a holistic view of the consumer identity and any underlying risk.
Taking a platform approach to identity proofing and ongoing monitoring is quickly becoming a business imperative and one that can be addressed with a single solution.