5 Things to Know about Identity Verification Software Solutions
There comes a point for nearly every business where fighting fraud and deterring bad actors takes up too much time. Whether it’s ongoing education on what constitutes a legitimate government ID or hiring enough headcount to match growth, fighting fraud can often take away from time that should be spent on growing your business. No matter if you’re a digital bank, a cannabis delivery app, or rent cars or scooters, you’ve probably explored different solutions to make ID checks easier and more secure.
An ID verification software solution can be a great way to instantly and automatically verify someone’s identity using their real-time selfie and their unexpired government ID. WIth the ever evolving fraud landscape and so many different ID verification solutions out there, it’s important to keep these considerations in mind when choosing the right solution for your business:
- An ID verification software solution shouldn’t be your only fraud deterrence tool.
When it comes to fraud deterrence, you can’t just focus on the classic hackers and career criminals that will likely target your business– both of which can be deterred with an ID verification software solution– you’ll unfortunately also need to focus on internal threats as well.
According to PWC’s 2022 Economic Crime and Fraud Survey, companies surveyed stated that 31% of their most serious fraud was due to an internal perpetrator. Yes– this means that about ⅓ of the time a company has experienced a significant loss due to fraud it was because of an employee. Whether it’s social engineering or simply someone unhappy with their position, poor internal security practices can leave businesses just as vulnerable to fraud and bad actors as a lack of external safeguards.
This is why leveraging an ID verification software solution often isn’t enough. ID verifications solutions work great at deterring external would-be bad actors because they force potential customers to verify their identities using a real-time selfie and an unexpired government ID– like a passport or license. This one-to-one mapping– the act of tying an account to a real human being on the other side of the screen– is one of the best ways to actively deter fraud. But it doesn’t account for fraud perpetrated internally.
Therefore, when you’re evaluating an ID verification software solution, it’s important that you integrate your ID verification software solution as part of your broader security best practices.
And with that in mind…
- The best ID verification solutions grow with you.
Whether you’ve hired a dedicated individual to manage your ID verification solution or you prefer an automated solution is up to personal preference. Many ID verification solutions offer the ability to automate ID checks and manually verify any IDs that were flagged. Other solutions are fully manual and will require you to sign off on every ID check.
What’s considered scalable can differ from business to business, though most tend to prefer solutions that can be fully automated. To find the solution that works best for your needs, check out our post about the four questions to ask when choosing an ID verification solution.
- Your chosen ID verification software solution should create enough friction to deter fraudsters without creating a poor customer experience.
Market differentiation doesn’t just include what product you’re selling– customer experience is also equally as important. This is especially true in markets like car and scooter rentals– your customers will go with the company that makes verifying their age the easiest. Of course, there has to be some process or you’ll deal with underage riders, stolen vehicles, and other nightmares.
ID verification software solutions are a great way to deter fraudsters, but some solutions can add too much friction– deterring legitimate customers. Some solutions rely on someone hired by their company to manually verify an ID, making your customer wait for hours for their ID check. Other solutions will have the customer go through the entire checkout process before letting them know that their ID was rejected.
When it comes to an ID verification software solution that gives your customers the best experience, the solutions that are instant and automated tend to perform the best. These solutions let your customer know their ID has been accepted or rejected immediately after they input their information– and not when they’ve gone through the entire transaction.
For more information about instant and automated ID verification solutions, check out this blog post.
- ID verification solutions make it easy to share known fraudsters.
Deterring fraud is, of course, the goal– but fraud deterrence doesn’t have to happen only when someone is attempting to access your services. Many ID verification solutions enable you to hold onto rejected ID checks for a set period of time, enabling you to share repeat offenders with other locations or partners in the area.
Silvercar by Audi uses Berbix to share repeat offenders with other car rental companies in their area, helping themselves and other businesses stay safe from would-be bad actors. This has helped them not only prevent their cars from being stolen, but has also given their concierges back their peace of mind.
- Use ID check data to make informed decisions.
Some ID verification software solutions will offer you additional data around your ID checks that can help you make decisions around your business. Data points around conversion rate and median session length can be helpful in determining when customers drop off from the checkout process: are there too many steps in the process? Are you asking for their ID too late or too early? Looking at why IDs were rejected and sorting them based on prevalence can also be helpful– knowing what the majority of the fraud you’re facing can help you create an informed plan on how to combat it. In Berbix, IDs can be flagged for an incomplete barcode, being under 21, having unreadable text, using an expired ID, and more. And some solutions also enable you to see what state or country you’re checking the most IDs, which can be helpful when planning additional locations or adding headcount.
There’s no perfect fraud deterrence solution on the market, but the tools are out there to deter most would-be fraudsters. As you look for the right solution for you, make sure you’re asking the right questions to choose a solution and strategy that’s right for you and your customers.