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With nearly 111 million consumers using services like Airbnb, Uber and Freelancer.com daily, the sharing economy is booming more than ever before. And if you consider the sensitivity of the information, goods, services, and funds being exchanged, it should go without saying that the secure identity authentication and verification of users accessing these platforms is critical. But as a new report from PYMNTS shows, many sharing economy platforms are still using surprisingly weak identity verification and authentication methods that put consumers’ digital identities and data at risk.

Identity Authentication Challenges for Sharing Economy Platforms

Based on their survey of 3,585 consumers in early 2019, PYMNTS made the following conclusions about the digital identity authentication and verification techniques being used by sharing economy platforms today:

  • Many sharing economy platforms seem to be sacrificing onboarding and login security for more seamless user experiences, putting users and their data at risk.
  • Many platforms also seem to be using outdated and vulnerable forms of identity authentication and verification (such as passwords) despite the fact that users prefer newer methods:
    • PYMNTS found that fingerprint scanning was the most popular method of authentication amongst users logging into sharing economy platforms. 76.4 percent of consumers who are asked to verify their identities by scanning their fingerprints when logging into existing sharing economy accounts report being “very” or “extremely” satisfied with their login process.
    • Only 9.2 percent of surveyed consumers say their sharing economy platforms authenticate them using fingerprint scanning.
  • The most common way sharing economy users say they are asked to authenticate their identities when logging into their accounts is through simple passwords (49.5 percent) and email addresses (35 percent).
  • This is problematic because not only are customer satisfaction rates lower when using password and email address authentication, but these methods also have known vulnerabilities considering that consumers’ personally identifiable information is easily accessible to fraudsters on social media and the dark web.

Based on PYMNTS’ data, it can be concluded that sharing economy platforms could solve these issues by employing the identity verification methods most preferred by their users (fingerprint scanning and personal questions) – but that would only be addressing one side of the experience vs. security coin. As numerous news articles show, fingerprint biometrics can be shockingly easy to hack and personal security questions have the same issues as passwords and email addresses – they’re notoriously simple to crack using information found or purchased on the dark web.

So what can sharing economy platforms do to both raise their users’ satisfaction levels and ensure that their data and identities are protected against fraud?

Identity Authentication Opportunities for Sharing Economy Platforms

Passive identity authentication, an emerging technology that is already in use at many of the world’s largest banks, healthcare companies, and technology enterprises, would allow sharing economy platforms to authenticate users frictionlessly through their mobile phones without any action necessary on the part of the user. When compared to fingerprint scanning or personal questions, passive authentication is even more seamless, and is substantially more secure as the only way a fraudster could crack this technology is if they were actually in possession of the target’s mobile device (which is not scalable).

Passive identity authentication, such as Payfone’s mobile authentication tools, would enable sharing economies to leverage the same level of security used by large banks while also extending the best possible experience to their userbase.

For more information on Payfone’s suite of passive authentication solutions, contact us here.

The rise of mobile technology and automated platforms has led to more advanced self-servicing and convenience for consumers. Ironically, many of those same technologies also lead to more call center interactions and human intervention when customers are unable to complete transactions on their own, which causes frustration (long call wait times, annoying security questions to verify identity, and then having to re-verify your identity each time you are transferred to another part of the call center), as well as higher expenses and a decline in customer satisfaction.

Payfone CEO Rodger Desai recently joined a panel of industry experts from Infobip, Citi, and Amazon Web Services at Medici’s inaugural Inner Circle event to share insights about what companies can do to differentiate themselves with safer, faster and easier customer experiences and stay relevant in the digital age.

See highlights from the discussion >

Growing instances of fraud in digital channels (“year-over-year online fraud losses are up 10% or more for 60% of FI risk executives surveyed” – Aite Group research, 2019) are forcing enterprises to design their customer experiences around preventing fraud rather than creating great customer experiences with fast and easy interactions. The fear of fraud overtaking the desire to deliver great user experiences creates a “Trust Gap” whereby most companies can only “pass” ~40% of customers during digital interactions (such as logging in to online or mobile accounts or calling into a call center) without subjecting them to cumbersome identity authentication processes such as security questions and SMS passcodes. The Trust Gap describes the discrepancy between the ~60% of interactions that brands typically treat with suspicion despite the fact that only 2-3% of transactions actually deserve further inspection.

Research indicates that many enterprises are actively working to overcome the Trust Gap to be able to extend the best possible user experiences to customers without sacrificing security. According to Aite Group, 86% of merchants surveyed and 88% of FI respondents indicated that improving the CX is the #1 key factor driving their investments in anti-fraud technology.

How can companies use the Trust Gap to their benefit to get a leg-up on the competition? Head to Forbes to read what our CEO, Rodger Desai, says about how trust will be the KPI that reshuffles the Fortune 500, and what enterprises can do to start capitalizing on this trend.

Read the full article on Forbes >

Our clients are able to extend great digital experiences to their customers who have high Trust Scores – but what about those consumers who have Trust Scores below 300, which may be an indicator of unusual behavior, synthetic identity fraud, or SIM swap and other attacks?

Adaptive Orchestration is a real-time measure of identity confidence for those consumers who cannot be immediately passed because their Trust Score is too low, or whose use case requires multi-factor authentication, thus requiring further investigation. With Adaptive Orchestration, additional methods such as ‘take a selfie’ can be used to inform the Trust Score in real time. This process may be used to further verify consumers with Trust Scores between 300-630 who may be legitimate but are showing unusual behavior.

The image above shows one example of how adaptive orchestration allows a consumer to take a selfie in real time and have it instantly matched with their US passport on file.

After a successful step-up authentication that passes the customer via Adaptive Orchestration, the Trust Score immediately adjusts to a level of 630 or above, and will persist to avoid the need to step-up the same customer in the future if no new indicators of unusual behavior are evident. All of this is seamlessly orchestrated across all channels via the Payfone Trust Platform.

To learn more about Adaptive Orchestration, contact us.

No industry is safe from the Amazon Effect or the Uber phenomenon or the WhatsApp moment, especially Financial Services. With consumer expectations higher than ever, brands are having to revolutionize the way they communicate with their customers. We are in the new age of omni-channel, omni-present communication that must respect the intelligence of customers and address their preferences. With technology like AI-powered chatbots leveling the playing field, companies must “meet” customers wherever and whenever they choose, without compromising on richness of context or trust and security. As FinTechs increasingly move away from disruption and focus on mutually beneficial collaboration with financial institutions, there’s a need for a platform-based approach to ensure that the end-customer’s experience is curated rather than confusing.

Make sure you have a platform that will grow with your company and orchestrate content in a plug-and-play fashion across all customer touchpoints and channels. Contact us to learn more.

Consumers are increasingly digital in everything they do. In fact, more than 60% of consumers of all ages log into their financial accounts at least once per week, with younger consumers showing particularly strong use and engagement with the mobile channel (Figure 1). As a result, banking and commerce transactions are rapidly migrating into the online and mobile channels.

aite group, anti fraud solutions, customer experience, payfone, julie conroy

Considering this overwhelming trend towards digital, it’s not surprising that improving the customer experience is the #1 consideration for the majority of merchants and FIs as they are contemplating new investments in fraud mitigation and authentication. According to a report from global research firm Aite Group, 86% of merchants surveyed and 88% of FI respondents indicated that improving the CX is a key factor driving their investments in anti-fraud technology (Figure 2 and Figure 3).

aite group, anti fraud solutions, customer experience, payfone, julie conroy

aite group, anti fraud solutions, customer experience, payfone, julie conroy

The same report highlights Payfone’s unique ability to enhance customer experiences by verifying identity securely and little or no friction on the customer’s end. The paper also shows how Payfone’s diversified signals deliver 73% higher identity verification rates.

Is improving your CX and giving your customers a fast, frictionless and fraud-free experience at the top of your priority list? Contact us today to learn how Payfone can mitigate fraud while also delivering the best possible CX.

It is now possible. Payfone assigns a real time personalized Trust Score to every consumer.

Listen to (or read about) a just released podcast with Tearsheet and Rodger Desai, CEO of Payfone to hear how using telecom and other signals, Payfone yields up to 73% higher verification rates, which turn into high consumer pass rates and enrollments.

Tearsheet’s Zack Miller breaks it down for you in a new podcast. Rodger discusses some of the top challenges businesses are facing today and how they are solving them with advanced digital identity authentication. He also shares insights on how to measure digital identity ROI, and a new report published by Aite Group about why diversified signals are key to higher identity verification rates.

Listen to the new Tearsheet podcast here.

Mobile Network Operator (MNO) data has long been thought of by many in the identity authentication industry as a vital source of signals for enterprises to prevent fraud and create better customer experiences. New research published by global research and advisory firm Aite Group indicates that stronger identity verification requires diversified signals.

The analysis was based on a data study completed in Q1 2019 for a leading U.S. financial institution to understand Payfone’s ability to detect fraud and improve the customer experience both with and without access to MNO data. From most businesses’ perspective, the ability to provide high verification rates is often of greater value than fraud detection, given the benefits of reduced customer friction and lower operational expense (with fewer customers having to engage with the contact center or manual review teams), which drive customer satisfaction and higher Net Promoter Scores.

The results of Aite’s report are a compelling validation of Payfone’s value proposition. The verify rate, which consists of the proportion of records in which the name and address are successfully matched with the phone number, was 64.2% using MNO data alone. When Payfone’s full network of authoritative verification partners was used, excluding MNO data, this produced a verify rate of 83.2%. The verify rate for Payfone’s collective sources, including MNO information, was 85.1%, which indicates there is only a slight improvement (1.9%) in account verification rates when direct carrier information is added to the equation.

payfone, identity verification, aite group, identity authentication, digital trust

Even more compelling, when the verify rates are extrapolated to reflect the total line type distribution in the U.S., the verify rate improvement across all line types increases by 73%. This improvement makes intuitive sense, given the broader population of verification partners that Payfone has access to, versus the sample data, which was heavily skewed to mobile.

“The goal of the study was to understand the solution’s ability to provide accurate identity verification while increasing fraud detection,” said Julie Conroy, Research Director for Aite Group’s Fraud & AML practice. “From most businesses’ perspective, the ability to provide high verification rates is often of greater value than fraud detection, given the benefits of reduced customer friction and lower operational expense (with fewer customers having to engage with the contact center or manual review teams), which drive customer satisfaction and higher Net Promoter Scores. The results of this analysis are a compelling validation of Payfone’s value proposition to assess the risk of the phone and its owner, providing FIs, merchants, and other firms with reliance on digital and/or contact center channels with a unique view into the risk associated with their customers, and an ability to remove unnecessary points of friction.”

To download the full report, click here.

Educate yourself with more Did You Know? insights here.

85% of consumers have the necessary depth and consistency for businesses to determine the authenticity of their identities, according to McKinsey.

So why is there still so much fraud and so many annoying customer experiences that slow us down and prevent us from transacting?

The main culprit is that most companies only have the ability to identify up to 40% of the good guys. Payfone’s identity authentication provides enterprises with the ability to “greenlight” or “pass” close to 85% of customers without friction or step-up authentication processes, while stopping the <5% of fraudsters. We do this through our Trust Score™ and persistent, tokenized ID, which pull together and synthesize identity signals from a diverse network of authoritative identity verifiers in a private and secure manner. This gives our clients a more complete snapshot of customer identities and improved pass rates.

The research also highlights the importance of deep and consistent identity information when it comes to detecting synthetic identities:

“Rather than using a stolen credit card or identity (ID), many fraudsters now use fictitious, synthetic IDs to draw credit. Indeed, by our estimates, synthetic ID fraud is the fastest-growing type of financial crime in the United States, accounting for 10 to 15 percent of charge-offs in a typical unsecured lending portfolio. Instances of synthetic ID fraud have also recently been reported in other geographies. More worrying still, much bigger losses are building up behind these IDs like hidden time bombs.”

The report goes on to describe the other benefits of determining identity authenticity:

“If armed with similar scoring systems, banks could ascertain whether an applicant’s profile looked real. They could then instantly extend credit, perhaps limited, to those applicants with high depth and consistency scores. They could even offer higher initial credit limits than would normally be the case for first loans, since low-risk applicants could be distinguished from high-risk ones.”

Click here to contact us about how our Trust Score can help your company achieve higher pass rates and greenlight more customers today.

Webinar highlights new research study that shows Payfone signals are superior

It’s a question that’s top-of-mind for many enterprises — what is the impact of not having access to MNO information to authenticate interactions? What type of signals are most impactful to get the highest coverage and most inclusive identity authentication?

Join Julie Conroy, Research Director for Aite Group’s Fraud & AML practice, for a webinar that delves into the results of a data study performed for a leading U.S. financial services company. Learn about the differences between MNO data and other signals, and which deliver the highest verification rates. This analysis also breaks down the impact of AT&T removing its data from the eco-system.

WEBINAR: Payfone Signals Prove Superior to MNO Data Alone
Date: June 19, 2019
Time: 1-2PM ET
Presenter: Julie Conroy, research director for Aite Group’s Fraud & AML practice

Register for the webinar here.