Traditional identity verification methods have long served as the foundation of security processes. However, as technology advances, so do the techniques used by fraudsters, affecting both consumers and merchants. This overview discusses these traditional methods, their limitations, and introduces modern solutions to enhance security.

Manual Document Checks - The Sherlock Holmes Method

Imagine your staff as a team of Sherlock Holmes-like detectives, each equipped with a magnifying glass, meticulously examining identity documents such as driver’s licenses and passports for authenticity. While this visual is engaging, the reality of manual document checks is far less exciting, fraught with expenses and challenges.

Manual document checks are time-consuming and prone to human error. Each document must be thoroughly compared against known standards, which slows down processes like customer onboarding and can lead to a poor user experience. The accuracy of these manual checks depends heavily on the skill and attention to detail of the person performing them, and even well-trained individuals can miss sophisticated forgeries. Research shows that **errors occur in about 27% **of manual document checks, highlighting significant risks of potential security breaches.

The costs associated with training staff to effectively detect fraudulent documents can be considerable. For example, training 150 employees could cost between $7,500 and $45,000 depending on the depth and frequency of the training required.

While the romantic notion of being a detective might be appealing, manual checks are increasingly impractical for businesses operating at scale or those that require quick transaction times. Many companies are now turning to digital identity verification solutions, which offer faster and more reliable checks without the substantial overhead expenses of manual ID document verification. Modern technologies use sophisticated algorithms to detect forgeries, significantly reducing the likelihood errors and enhancing overall security. The shift not only improves efficiency but also helps in maintaining compliance with regulatory standards, crucial for businesses in sectors like banking, healthcare, and retail.

Knowledge-Based Authentication (KBA)

In the world of online security, the Knowledge-Based Authentication (KBA) identity verification method can feel akin to participating in a round of Identity Jeopardy!

In this game, the questions about personal history aren't just trivia—they're the keys to accessing important accounts. The method has traditionally been a go-to for verifying identities quickly—especially in sectors like healthcare and insurance where confidentiality is key. It’s crucial for businesses to recognize that this method’s reliance on the use of personal trivia (like your mother's maiden name or the street you grew up on) can be a double-edged sword.

These details are seemingly intimate but in reality they can be uncovered by anyone with internet access, thanks to social media and public records. Studies show that KBA can fail 10-15% of the time, highlighting significant vulnerabilities. Therefore the KBA method is susceptible to fraud, particularly if there’s been a data breach exposing such personal information.

To combat these weaknesses, many are shifting from static to dynamic KBA, which uses real-time data from a broader array of sources for its questions, making it tougher for unauthorized users to predict the answers. And incorporating KBA into a multi-layered verification strategy—including biometrics i.e. facial recognition technology—has become a common practice. The idea is to lay out multiple hurdles for fraudsters to overcome, substantially strengthening the overall authentication process.

Limitations of Traditional Methods

These traditional verification methods might have their charm, but in the digital age, they're more like using a typewriter to send an email.

  • Labor-Intensive: Manual identity checks require significant time and effort, slowing down business.
  • Vulnerability: Physical documents can be forged; personal information used in KBA is often publicly accessible or hackable.
  • Limited Scope: Credit bureau-based methods exclude individuals with no or limited credit history (e.g., young adults, new immigrants).
  • Privacy Concerns: KBA and credit checks involve extensive collection and handling of personal data.
  • **Delayed Results:**These methods often cannot provide immediate results, impacting user experience.

Traditional identity verification methods, while foundational, often struggle to keep pace with the sophistication of modern fraudsters. Everyware plays a crucial role in addressing these challenges by offering advanced identity verification technologies. These solutions enhance digital billing and payment systems like Pay by Text, making them a valuable asset for merchants across various sectors.

For businesses looking to bolster security and streamline operations, consider integrating Everyware's innovative Identity Verification solutions into your workflow.