A group of colleagues in a meeting

Identity checks and online security play a vital role, not only to protect the organisation carrying out the check, but also their customers from potentially becoming victims of fraud.  The success of these measures, however, hinge on a host of separate factors.

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There’s no one-size-fits-all and across industry, commerce and government, the risk appetite and threshold for acceptance can vary enormously.

In some instances, the same organisation may even request differing levels of assurance across its range of products or services. Anti-fraud and identity verification providers are constantly obliged to deliver flexible options that meet the demands of any given risk appetite.

With this in mind, there are generally three areas that determine the level of assurance imposed to ensure consumers are safeguarded.

1. The type of products or services being provided

Unsurprisingly, stricter checks are put in place for high-value goods and services. It’s a sentiment that often underpins financial transactions, particularly when money is being paid out including a benefit payments, grants or insurance claims.

2. The risk of fraud and the related appetite for it

Noticed how some organisations are by their nature more risk averse than others? This usually reflects their likely or perceived exposure to fraud. Services offered completely online are more flexible and convenient for customers. But with no face-to-face interaction taking place, higher assurance levels are often imposed to help ensure a customer is genuine. Often at the launch of new services, authentication levels will be set high while risks associated with fraud and identity checking are assessed. In time the degree of authentication may get adjusted accordingly.

3. Striking a balance between fast, effective and seamless services versus preventing fraud

Businesses are constantly engaged in a tricky balancing act. On the one hand they want to ensure consumers get an easy and straightforward experience, while on the other they want to safeguard their customers and protect their cash flow from identity thieves. If ease of access becomes too hard, they risk turning away good customers. But if it’s too low and they are likely to see a jump in attempted fraud.  It’s a critical balancing act and by no means a static process as risk appetites are constantly fine-tuned across multiple customer touch points.

Identity checking simply isn’t clear cut. While some consumers will find that they can readily assert their identity on one online platform, they may not be able to elsewhere. It’s the role of identity solutions supplier to ensure they constantly offer the flexibility and adaptability to work with differing levels of assurance.  The ultimate goal is to provide protection from fraud – a rising issue with detected ID theft continuing its relentless rise across ‘all financial products, reflected by a broad 50-50 split between first-party (consumer frauds) and third-party ID theft.