By: Austin Talley, CEO of Everyware
Identity verification technology plays a key role for businesses across all industries to maintain regulatory compliance and prevent fraud. This is particularly important in sectors like retail, e-commerce, automotive and healthcare as each handle large amounts of sensitive consumer information. With 96% of US companies having faced at least one fraud attempt in 2023, the urgency for fraud prevention becomes even more apparent.
There are many tactics that fraudsters use to acquire highly personal information or gain unauthorized access to financial information, social security numbers and login credentials. While these fraudulent tactics can vary by industry, they are evolving quickly across sectors. Generative AI is accelerating these risks even faster. This speed can make it challenging to adopt the appropriate technology to combat industry-specific risks. An important first consideration is how to embed identity verification into the payments checkout flow. The identity verification process helps confirm and authenticate a person is who they say they are to prevent fraud and mitigate non-payment risk. Let’s dive deeper into the fraud tactics commonly seen in different sectors and how identity verification works to protect against them.
Read More: Hurdles for Cross-Border and Digital Payments Across the Eurozone
Retail and E-commerce: Building Trust in Every Transaction
E-commerce cart abandonment can lead to a big loss in revenue. According to Baymard Institute, 22% of US online shoppers have abandoned a cart if there is a long or complicated checkout flow, and another 25% reported they didn’t trust the site with their credit card information. Fortunately, fraud prevention does not have to signal a longer or inconvenient checkout flow. As secure and seamless online transactions are an important step towards building customer trust and long-term loyalty, retailers must make appropriate updates to their payments tech stack.
Identity verification technologies prevent fraudsters from making purchases with stolen information and hindering them from opening false accounts by safeguarding customer data and maintaining the integrity of transactions. With 85% of all fraud being impersonation fraud  – when an unauthorized individual utilizes another person’s personal information – embedding the identity verification process into the checkout flow not only protects the business’ bottom line, but also enhances signals to a customer they can trust that retailer. This fosters loyalty, reduces cart abandonment and encourages repeat purchases.
Automotive: Shifting Gears to Secure Sales
Automotive dealerships are under increasing pressure to integrate robust identity verification systems to comply with Anti-Money Laundering (AML) regulations, particularly due to the rising risk of fraud in auto loan applications. In this sector, identity verification technologies often act as the primary defense against financial crimes, streamlining credit checks and enhancing customer satisfaction. The adoption of e-signatures also helps authenticate transactions and provides a layer of non-repudiation, ensuring the legality and integrity of signed documents.
Detecting synthetic identities – a common fraud tactic involving a mix of real and fake information – and protecting against straw purchases – when a vehicle is bought on behalf of someone who may not qualify for financing – also calls for advanced fraud protection needs. By cross-referencing application details with multiple data sources and employing techniques like document verification, biometric analysis and behavior analytics, these technologies ensure the buyer is the legitimate end-user before a purchase is made.
Healthcare: Prescribing Data Security
The healthcare industry, historically slow in technological advancements, is another prime target for exploiting security weaknesses. The industry faces significant vulnerabilities with traditional security methods, especially with social engineering schemes targeting IT help desks. Patient identity verification is crucial with healthcare regulations like HIPAA and relies on advanced technologies for accurate record matching, data protection and medication purchases. When embedded in the payments process, identity verification technologies enhance transaction security with ease, providing both healthcare providers and patients with a more secure payment experience.
The use of identity matching technology or ID document verification offered by providers such as Everyware can also be implemented as part of digital invoice payment processing, either by holding transactions where the identity is not verified or monitoring them only. This improves patient safety, prevents medical identity theft and streamlines operations. Notable industry uses involving biometric technologies also include palm scanning to authenticate a patient when checking in for an appointment or releasing medical records, and fingerprint recognition so only authorized staff can access medical records and medication dispensing systems.
Ultimately, fraud attempts can happen to any business in any sector. Versatile and adaptable identity verification solutions enable companies to meet industry-specific regulatory compliance and combat fraud tactics common in those fields, such as straw purchases for automotive dealerships. As businesses navigate the complexities of compliance and customer (or patient) trust, partnering with a reliable identity verification provider is crucial. By working with fraud prevention experts, retailers, auto dealerships and healthcare professionals can focus on other areas of their business that cement loyalty while trusting their business – and their customers – are protected.
Read More : GlobalFintechSeries Interview with John Sun, CEO at Spring Labs
[To share your insights with us, please write to psen@itechseries.com ]
