Enterprise risk management as it relates to the mitigation of cyber threats must include a systemic approach to identifying and preventing identity theft. A 2021 study reveals that identity-related scams and theft cost over $56 billion. When fraud occurs – it’s not just financial losses that rack up; reputational damage is done as well—in fact, two-thirds of consumers would cut ties with merchants over a single online fraud incident. The old ways of securing identity verification through knowledge or factor checks are increasingly unreliable and ineffective. Multi-factor verification is baseline protection, but adds friction and is vulnerable to compromise while data breaches expose personal information making usernames, passwords, and knowing your childhood best friend’s name, useless. Keeping your customers happy and safe requires new digital identity risk management best practices to balance customer experience while protecting your customers and reputation.
Increasing regulations and compliance requirements, such as the recent implementation of PSD2 in the EU, are accelerating digital identity roadmaps to deliver a trust continuum between companies and their customers. The first step of any relationship is to de-risk the interaction by better understanding the user’s digital identity on the other side – whether onboarding new customer accounts, verifying high-value transactions, or authenticating user logins.
Necessary Steps to a More Secured Digital Identity Future
Your digital identity is comprised of several hundred – if not thousands – of inputs; your phone number, email address, and IP are good examples of high-value digital identity inputs. The most common way you “see” digital identity is verifying possession of your phone or email when signing up, resetting a password, or logging into your account using a one-time passcode delivered via SMS or email. Modern digital identity provides instant, up-to-date information about a unique identifier like a phone number or email, where a vendor can assess the risk associated with it – even without a one-time passcode.
Companies can use this information to help prevent fake accounts from being created, thwart an account takeover, verify identity for creditworthiness, or understand the risk involved in a high-value transaction. Attackers constantly invent new ways to breach systems. Still, effective digital identity solutions help halt suspicious activity in its tracks while lowering friction and the number of authentications in your customer experience.
Enterprise-level organizations that work to fortify their ecosystems now while building a solid digital identity blueprint for the future will not only be ahead of future fraud attempts but be leaders in customer experience as well. While there’s no silver bullet when it comes to stopping fraud, digital identity can supercharge your ability to decrease risk for your business and build and maintain trust, loyalty, and engagement with your customers for many years to come.
About Joe Burton and TeleSign
Joe Burton is the CEO of TeleSign, the leading provider of customer identity and engagement solutions. The world’s most trusted brands rely on TeleSign to secure onboarding, maintain account integrity, prevent fraud, and streamline customer engagement.
