Verification Innovations Help Boost Compliance and Fraud Prevention

It’s been a busy few weeks in the realm of identity verification.

Fraudsters are wily, it’s true — leveraging technology, particularly AI, and stolen data, to construct new online personas. And in doing so, they fly under the radar, so to speak, presenting themselves as legitimate customers to banks and to businesses. All too often, they make off with sensitive information and/or funds from their victims.

The losses are significant. Joint research from PYMNTS Intelligence and Hawk AI has found that authorized fraud has been on the rise. Separate reports noted that 4.6% of transactions with banks were classified as synthetic identity fraud. And, per the Fed’s FraudClassifier model, synthetic IDs accounted for a commensurate percentage of dollar losses experienced by financial institutions (FIs). Earlier this year, TransUnion found in its latest State of Omnichannel Fraud report that 13.5% of transactions associated with online account creation — the initial point of contact with FIs or enterprises — were possibly fraudulent.

As for some of the innovations, as reported this week, Fintracking debuted a “pay-as-you-go” platform for ID verification, encompassing know your customer (KYC) and know your business (KYB). The offerings span “KYC Lite” for verifying government-issued photo IDs with advanced AI checks, and “KYC Full” which also verifies addresses, emails and phone numbers. Separately, KYB, verifies corporate documentation and beneficial owners.

Elsewhere, as detailed here, identity verification provider iProov said its Dynamic Liveness Solution, is the first to receive the new global certification on face biometric identity verification from industry association the FIDO Alliance. The FIDO Alliance is tasked with moving firms away from passwords — vulnerable, of course, to hackers — as a form of verification.

And in another announcement, embedded banking software firm Treasury Prime announced a collaboration with identity and security platform Footprint. Through that partnership, banks and their FinTech clients access Footprint’s KYC and KYB technology. Footprint also offers solutions to help client firms manage vendor onboarding,

In the ever-present shift toward digital channels for all manner of transactions, the mobile device is increasingly becoming a means of verification — and defense against fraudsters.

In a recent interview with Karen Webster, Prove Identity CEO Rodger Desai said automated authentication eliminates the time spent trying to make sure interactions are legitimate. Cryptographic signatures are assigned to mobile devices, he said, and Prove’s Identity Manager has real-time registry of phone identity tokens tied to phone numbers to help provide that automation.

As he noted, “if you can enroll all of the phone numbers — and the phones — of the people you trust to interact with, you can authenticate them” automatically every time.

Intellicheck CEO Bryan Lewis told Webster separately this year that his company is actively exploring a consortium approach to fighting digital ID fraud … an interoperable network where financial institutions can share trust and verification outcomes.

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