Introducing The "State of Identity Verification Maturity In North America" Report

The rising number of mass data breaches and the increasing sophistication of fraudster networks keep even the most savvy fraud managers awake at night. With an estimated $71 billion in global card not present fraud expected between 2017-2022, online businesses face mounting pressure to thwart criminal activity without rejecting good transactions.
Balancing fraud prevention and a streamlined customer experience is a delicate balancing act. Erring too far in either direction can have negative consequences. Organizations with overly aggressive fraud policies risk losing the lifetime value of good customers who are mistakenly rejected or who abandon their transactions while companies with policies that are too lenient can result in unacceptably high financial losses and a damaged reputation.
Sophisticated businesses are addressing this challenge by putting more advanced fraud prevention measures in place with mature identity verification strategies that utilize Big Data, machine learning, and global data linkages and insights. These evolved practices help them more readily differentiate between good customers (and speed their transactions) and potentially fraudulent actors.
We find it helpful to discuss mature identity verification as a progressive four-stage scale with our customers. The higher you rise up the scale, the greater the ability to reduce fraud, manual review and rejecting good customers. So how are the stages of identity verification defined?
STAGE 1: Not currently performing identity verification.
These organizations either do not perceive a need (because they have not been the victim of confirmed identity fraud) or do not know how to verify identities.
STAGE 2: Attempting identity verification, but not doing it consistently.
These organizations are utilizing a small percentage of available data and are not examining the linkages between the data they use. They rely heavily on manual review to approve or deny transactions.
STAGE 3: Consistently using identity verification, incorporating a larger proportion of available data, and experimenting with data linkages.
Often these organizations are highly motivated to reduce fraud and to increase the speed and efficiency of the approval process, which drives them to consider increased automation.
STAGE 4: Have embraced holistic identity verification.
These organizations are verifying multiple data elements and linking them. They have embraced automation.
In early 2018, Ekata commissioned a survey of 150 North American online merchants and lenders of varying sizes to evaluate their level of identity verification and produced the new “State of Identity Verification Maturity in North America” report. Respondents were asked about their current practices, motivations for – and perceived obstacles to – adopting more sophisticated identity verification practices, and the measurable business benefits that accrue for organizations as they become increasingly mature in their approach to identity verification.
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