Before conducting commerce with someone, you must have absolute assurance that they are who they claim to be. When a new account is created, client information is shared, or a purchase or transaction is authorized, it is essential to verify the user’s identity. Because so much of the modern economy operates online, the IDV process may be more vulnerable to cyberattacks.
Due to rising fraud risks, the landscape of digital identity verification is shifting rapidly. Many businesses can now verify a customer’s identity in real-time and before completing a transaction due to technological advances.
We’ll be looking at some of the developments in identity verification today.
Tokenization using Digital Wallets
Identity confirmation methods while employing a digital wallet are context- and wallet-specific. A digital wallet that can store and transfer biometric data or digital identification documents is a valuable tool for ID verification. Any time a user has to verify their identity, all they have to do is link their wallet to the necessary service or platform and go through the wallet’s authentication procedures.
Suppose your digital wallet is current with the latest Decentralized Identity Foundation (DIF) standards. In that case, you can use their Universal Resolver and Verifiable Credentials (VC) systems. Create and keep a digital identity using your wallet if the service or platform you want to use asks you to authenticate your identity.
Better System Security Is Achieved Through The Use Of Biometric Identification And AI
The usage of biometrics for commonplace purposes like unlocking mobile devices is on the rise. Morphological identifiers like fingerprints, hand, finger, and facial forms, as well as vein, iris, and retina patterns, have been the primary focus of these methods. A wide variety of physical and behavioral data can now be used in biometrics, including the velocity, acceleration, tilt, and pressure generated by a pen during the signature creation process.
When appropriately implemented, biometrics has the potential to make the identity verification process much more straightforward and safer for end users.
Frost & Sullivan, in their analysis of the identity validation market, state that “[solution providers] must also offer increased accuracy and precision to make it easier for valid users to conduct transactions while accurately detecting fraud actors in real-time.”
Qualified Electronic Signatures (QES) Are Gaining Popularity
There may be varying degrees of trust necessitated, depending on the specifics of the agreement or transaction at hand. A simple electronic signature (SES) is all that’s needed in low-stakes situations, like completing an online purchase, signing a typical sales agreement, or drafting a short document that needs to be signed.
The most fundamental electronic signature, SES, needs nothing more than an email address, phone number, or password to verify the signer’s identity. Before generating a magical link for a user, your app must verify that the user’s email address is associated with a record in your database. If the account already exists, the server will create a new token.
Privacy And Data Protection Like Login Verification Using Email Magic Link
The caution is apparent: treat all of your PII as though it were public knowledge. Names, passwords, and email addresses are all examples of static identifiers that can be stolen and used for online impersonation and other forms of synthetic identity theft. Users must provide an email address upon login or registration to obtain a verification link via email.
The term “magic link” is commonly used to describe this type of link-based verification system. It’s similar to providing customers a one-time code, except they won’t need to return to your app to enter it. So-called “magic” begins to occur at this point.
Password-free authentication via magic links is argued to be more secure and user-friendly than conventional passwords. Compared to one-time codes, the user experience is enhanced because fewer steps are required for each authentication attempt.
Users increasingly care about how their data is managed, with over 80% willing to spend time and money on measures that improve privacy. An organization’s liability to acquire, process, and secure PII is diminished when users manage their data, as digital identity wallet solutions provide.
Increase in Fraudulent Activities
Ransomware, geo targeted phishing, attacks on cloud security, and the Internet of Things (IoT) have all seen an uptick in prevalence while the economy has been in a state of flux for an extended period, providing abundant opportunity for fraudsters.
It is predicted that next year will be a breakout year for deepfake as the quality of machine learning and facial databases improves. As a result, unscrupulous actors can use deepfake technology to construct millions of false identities.
Today’s Businesses need multi-channel fraud detection capabilities as fraud becomes more sophisticated and ubiquitous. In recent years, there has been an uptick in cases of synthetic identity fraud, in which fraudsters create new identities by mixing existing ones. In 2023, the United States could lose an estimated $2.42 billion due to this fraud.
When protecting oneself against fraudulent activities and fake identities, businesses must deploy identity verification systems.
Final Thoughts
The field of identity verification is one where developments are constantly being made. What we’ve noticed in patterns thus far is just the beginning. It is anticipated that identity verification systems will continue to evolve and advance due to the rising demand for user privacy.
Product managers, CTOs, and CHROs must keep up with developments in their respective fields. Your company’s identity verification procedures can be trusted if you monitor and analyze the market often.
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