Companies have started to strengthen their identity verification protections against the increase in security threats from hackers and fraud in 2021, says Bala Kumar, chief product officer at Jumio. This year, look for them to consolidate the information they now get from multiple vendors into a single, comprehensive platform. Read his thoughts in the PYMNTS Ebook, “In a nutshell: 50 thought leaders sum up 2021.”
We’ve seen fraudsters become increasingly sophisticated in 2021, taking advantage of vulnerabilities and the inadequate security perimeter of remote working. Due to these growing threats, companies are now layering countless risk signals from multiple Know Your Customer (KYC) providers to protect their ecosystems from hacking. These factors have made 2021 “the year of consolidation” for the identity verification industry.
Enterprises are now moving towards a single, comprehensive platform that consolidates these capabilities to confirm user identities and maintain compliance effectively and efficiently. It is expected that by 2023, 75% of organizations will leverage a single vendor with strong identity verification capabilities and connections instead of using various other third-party solutions for identity verification and affirmation. identity, an increase from less than 15% in 2020.
In the past, organizations used countless solutions to verify the identity of users, review their identification and supporting documents, authenticate them after each visit, ensure that they are not on any watchlists by performing checks ongoing, managing investigations, monitoring their transactions and reporting suspicious activity. However, this approach is not only costly and complicated, but also fails to properly detect financial crime and properly verify the user’s identity. Data remains fractured across business unit silos and valuable insights are not shared across customer touchpoints.
By using multiple vendors for verification, organizations may face risks of non-compliance with regulations such as KYC, Anti-Money Laundering (AML), Data Privacy and Markets Directive. financial instruments (MiFID). These regulations require companies to identify and report illegal activities such as terrorist financing or money laundering to regulators. Businesses with non-compliant identity verification and transaction monitoring solutions can lose customer trust, fall victim to fraud, and face costly fines.
Using a consolidated provider allows companies to orchestrate the controls and assurances needed to know and trust their end users, and helps them achieve high capture rates and low false positives. More importantly, it also links related transactions, underlying attributes, and risk signals to provide a holistic view of every individual and transaction at every customer touchpoint.
Additionally, it provides a more seamless user experience that verifies consumer or employee data, while providing enhanced authentication using a document such as a government-issued ID. There are also unified platforms that not only assess an individual’s risk, but also the devices associated with them, the credentials they provide, and their facial biometrics, all through a single layer of programming interface. application (API). Given these benefits, we can expect to see even more vendor consolidation in KYC in 2022 and beyond.