Identity Verification: Protecting Customer Data Across Borders

A single platform for international identity verification can help businesses onboard customers from across the globe, verify them in seconds and ensure compliance

Today’s digital world creates opportunities for businesses to expand to new markets around the globe. We now live in a world where borders matter less when it comes to goods and services and, as a result, knowing customers are who they claim to be becomes even more vital. While you can’t trade with people you don’t know, the internet was, unfortunately, built without identity in mind. As more and more of our activities become dependent on the internet, this challenge of establishing trust becomes vital to society and the new economy.

Deterring fraud while delivering a seamless experience in the country where your business operates is complicated enough, but it’s even more challenging when you have customers around the world. International data is essential to successfully and seamlessly onboard customers and verify their identities. However, the path to international data isn’t always clear. Global identity verification is complicated, to say the least.

The complexities of global identity verification lie in the availability quality and variations of data, and also in compliance regulations, all of which vary from country to country. In France, for example, credit bureau data isn’t available for electronic identity verification. Businesses outside of the country can’t rely on it as a default source of data for identity verification.

And, while those of us in developed, first-world countries are well accustomed to digital IDs, roughly half of the world’s population still relies on paper IDs or lacks formal identity documentation entirely. At the same time, no digital identity is created equal. For example, in the Middle East many people have multiple middle names and many don’t have a date of birth that includes more than the first day of the first month, in the year that they were born. In Italy and Spain you have to consider a mother’s maiden name and in China, you need to match against the address of birth. What is typical of an identity for Know Your Customer (KYC) in the U.S. is very different globally. This means having a global solution that is domestically relevant a critical component of identity verification.

This begs the question: How do you verify identities and create a digital ID that will allow these populations to grow and take advantage of new services, such as banking?

The ultimate goal of the identity verification and fraud deterrence industries is to create more secure digital identification for individuals worldwide—essentially, what the McKinsey Global Institute refers to as a “good digital ID.” Enabling good digital IDs for those who lack documentation opens access to financial services and the global economy at large for a significant number of people. In fact, estimates indicate that the widespread adoption of good digital IDs could open the global economy by 3% to 13% of GDP in 2030.

However, even with this data in place, businesses must still comply with international regulations such as Anti-Money Laundering (AML) and KYC when onboarding and verifying customers, as well as age verification regulations that are emerging across sectors and markets globally. Technology and data need to be flexible and enable companies to manage a risk-based approach to global regulations. However, the challenge doesn’t end with meeting identity regulations. Global identity verification also brings the complexity of varying data protection regulations. It is essential that each market is approached respectfully and transparently, only accessing and processing data that is in accordance with domestic data compliance regulations.

The Benefits of a Single Identity Verification Platform

The best way to properly verify identities and maintain compliance internationally is with a single, central identity verification platform that accesses global data and can be easily adjusted and configured to meet your business’ needs over time. “A single platform that enables access to identity verification across multiple geographies enables companies to use it more easily and efficiently and can save expense if a new implementation project can be avoided,” said Shirley Inscoe, senior analyst at Aite Group.

Often, businesses attempt to manage multiple vendors and systems for each country so they can tap into data streams for each location. Not only is this time consuming, but it also can lead to the temptation to settle for basic matching, which in today’s online fraud landscape simply isn’t good enough. While data is localized, it is also often strengthened from the learnings of global data verification. Matching algorithms are a key consideration, the development of algorithms to match different character sets and aliases across markets and geographies is important. One platform also allows one audit trail, for a compliance officer to have a single place is a huge benefit.

With a single platform for international identity verification, businesses can onboard customers from across the globe, verify them in seconds and ensure compliance. Not only does this help prevent fraud, but it also ensures a seamless and fast customer experience. However, not all platforms are created equal. Balancing fraud prevention and customer experience—particularly in the customer-not-present environment—requires a robust, layered identity proofing system that provides multiple ways to verify a customer by monitoring activity, location and device attributes and dynamically and seamlessly escalates any suspicious case to other methods of verification. “Layering strong location intelligence data with a comprehensive mix of identity attributes is becoming increasingly important for companies across the globe to successfully onboard new customers, identify fraud and reduce costs,” said Inscoe.

The winners in this new international economy are creating competitive advantage through remote, frictionless trust on a global scale. They are thinking beyond the constraints of traditional identity verification as check-box compliance and using innovative tools to reinvent onboarding and the customer experience. With frictionless trust, they’re delivering a simple customer experience while protecting data privacy, deterring fraud and reducing compliance risks.

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