Identity fraud is a major concern for both people and companies these days. According to a survey by Javelin, identity fraud’s total cost in 2019 was almost $17 billion in United States dollars. As a result of this, both people and companies are taking action to prevent identity fraud from occurring to them. One way to help prevent identity fraud is to verify user identities reliably.
Doing so can be a significant part of your overall security. Self-registration of users is often the norm for many companies. However, self-registration is not the best method, since it typically provides you with only a user’s phone number or email address.
Neither of those pieces of information provides much insight into a user’s actual identity. That is why identity proofing is popular among many companies these days. Keep reading to learn more about identity proofing and its importance these days.
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What Exactly Is Identity Proofing?
Simply put, identity proofing is using a process to verify a user’s identity. While this may appear similar to typical authentication based on a combination of a username and a password, identity proofing is not the same as ordinary authentication. In fact, identity proofing is something that happens before a user receives their credentials in many cases. Identity proofing can also happen alongside the typical authentication process that is familiar to most people.
Identity proofing means that you ensure that the user’s claimed identity matches their actual identity. The process of identity proofing operates by letting you verify user identities before you allow users to access your system. Using biometrics in the form of a facial scan and life history in the form of a credit report are two common ways to do identity proofing. You can also verify user identities manually, but doing so is often time-consuming and can worsen the user experience.
The three steps of identity proofing are resolution, validation, and verification. Resolution means that the system discerns the identity of the user in the system’s context. Validation refers to the system getting the user to provide them with identifying information such as password, username, and security question answers.
The other part of validation is ensuring that this identifying information is accurate. The last step in the identity proofing process is verification,which means that the system verifies that the user is the person that they claim they are. One thing to know about good identity proofing solutions is that they will complete all of these steps automatically.
Identity Proofing Helps Prevent Identity Fraud
As we have already covered, identity fraud is a significant concern for both companies and people these days. There are a number of ways that you can help prevent identity fraud. Identity proofing is one of these methods. If your system incorporates robust identity proofing, it will help prevent unauthorized access and loss of data.
Additionally, identity proofing is good for companies because it helps protect their users and helps strengthen the company’s security infrastructure. Identity proofing benefits both users and companies alike. Even government entities recognize the importance of identity verification these days.
Identity Proofing Helps Companies Comply With KYC and AML Requirements
Banks have to abide by anti-money laundering or AML requirements. Identity proofing can help them do that by verifying user identities and allowing the bank to easily report any suspicious activity. Financial institutions also have to follow Know Your Customer or KYC requirements.
The two main requirements of KYC in terms of documents are proof of address and proof of identity along with a photograph. Identity proofing can help ensure that users provide these documents to verify their identity. Additionally, companies can avoid legal issues and potentially expensive fines by using identity proofing to follow AML and KYC requirements.
Identity Proofing Improves User Experience
Another reason why identity proofing is important is that it improves the user experience. Users can feel more comfortable using a company’s website if they are sure that they are protected from unauthorized access to their accounts. Users also have an easier time trusting the company in question when they know strong security measures are in place to protect their identity. Also, good identity proofing solutions are easy for the user to use. This means that they can feel secure without going through an inconvenient or difficult identity-proofing process.
Peace of Mind Is Another Benefit of Identity Proofing
Effective identity proofing also provides peace of mind both for companies and users. Users can rest assured that they are protected from unauthorized access. This sort of protection is even more important if users are making online transactions via a website. Companies can rest assured that identity proofing safeguards users’ identities and protects their websites from unauthorized access by potentially malicious individuals. As a result of this, it is a good idea to implement identity proofing to provide top-notch security for your company and your users.
