The world is experiencing quantum leaps in digitalization, as technology is embraced in ways never before prior to the pandemic. At the same time, digital fraud poses a bigger threat as digital transaction volumes increase, with annual losses amounting to $10.5 trillion by 2025 globally. With further developments in technology, we can only expect greater risks to data privacy and security and growing pressure for enterprises and industries to ensure compliance.
As governments are passing legislations to safeguard customers amid this backdrop, digital identity is a promising start to detect and prevent fraud. In the financial sector, financial institutions are pressured to stay vigilant and maintain higher security, and hence trust levels between banks and customers. Financial institutions are some of the first to rely on digital identity verification for secured and compliant onboarding of customers and other processes.
As the backbone to providing connectivity essential for sectors such as the financial and even governments, telecom operators require a robust digital identity verification process to build resilience and allow the vast majority to assess various services. This will have a profound impact on other sectors.
In the banking sector, for instance, many institutions depend on a customer’s mobile phone to provide verification. SIM swapping is a common threat when a user’s personal information can be accessed without the user’s knowledge, and hence misappropriated to authenticate fraudulent transactions.
Automating digital identity verification
Today, there are more than 5 billion individuals with a mobile subscription. This number is projected to reach 6 billion by 2025. As mobile subscribers hike globally, it comes as no surprise that SIM card fraud is escalating. Other threats include call transfer accounts, and vishing calls. As telecom operators turn to online onboarding of new customers, online identity verification is a big stride toward preventing potential fraud and even money laundering.
Across industries, remote or digital onboarding is quickly becoming the norm. Digitalization provides opportunities for innovative and automated onboarding processes that are smarter, more secure, and faster to offer customers a seamless online identity verification experience.
Such onboarding solutions rely on sophisticated AI algorithms backed by large data sets to make informed decisions. As compliance demands increase, authenticity of global IDs can be automatically verified through myriad checks using unique security features such as watermarks or holograms. Biometric technology is also embedded in a strong identity verification system to fortify security. Complex algorithms can also better detect document fraud to ensure that there is no foul play.
For customers who have grown accustomed to seamless and convenient customer digital journeys, automated digital identity verification better bridges the physical and virtual worlds.
Putting your customers first as a diversified growth strategy
Telecom operators that focus on a customer’s journey and caters to their needs and expectations that cover all touchpoints are more likely to find success. Through a seamless, automated, and error-free onboarding process, for instance, the benefits are reduced identity fraud, compliance with security regulations, as well as reduced acquisition time and cost, which according to a report from McKinsey, reduces onboarding costs by up to 90%. Furthermore, digital identity verification raises customer experience levels.
Through digital identity systems, telecom operators can gain a higher degree of trust in customers’ identities. They also obtain a richer profile of customers, which in turn helps them to provide tailored solutions and services around their needs and preferences. Similarly, these advantages apply when customers onboard and manage their third-party OTT subscriptions using mobile devices, allowing telecom operators to tap into various strategies to support growth and move up the digital services value chain.
A sign that digital identities are taking off, governments around the world are developing digital identify ecosystems. One of the latest to launch a digital identity authentication on smartphones, Pakistan has introduced a digital identity verification app to facilitate banking and other services.
Essentially, the benefits of shifting towards digital identity verification are twofold. Apart from being regulation-driven to stamp out fraud, telecom operators can go beyond providing connectivity to seize opportunities as a valued partner in delivering seamless and secure digital services.