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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  • Many platforms also seem to be using outdated and vulnerable forms of identity authentication and verification (such as passwords) despite the fact that users prefer newer methods: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 >

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.

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.

Highlights:

 

  • 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, but new research published by the Aite Group indicates that stronger identity verification requires more diversified signals.
  • Aite Group’s Fraud & AML practice analyzed the results of a data study performed for a leading financial institution in Q1 2019. The study showed a 73% increase in verification rates when diversified signals from Payfone’s network of authoritative identity verifiers was queried vs. using MNO data alone.
  • The study also found that adding MNO data to Payfone’s mix of identity verifiers resulted in a slight improvement (1.9%) in identity verification rates.

 

NEW YORK (June 20, 2019)Payfone, a leading digital identity authentication network, today announced the results of a research report with Aite Group, a global research and advisory firm delivering comprehensive, actionable advice on business, technology and regulatory issues within the financial services industry. The paper analyzed the results of a data study performed for a leading U.S. financial institution in Q1 2019 in order to compare the efficacy of using MNO data for identity verification vs. Payfone’s diversified identity signals. The study also looked at the impact of removing MNO data from the identity verification ecosystem.

 

Aite Group’s analysis examined 29,000 consumer records to conclude that the identity verification rate (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 verification rate of 83.2%. The verification rate for Payfone’s sources, including MNO data, was 85.1%, indicating a 1.9% improvement in account verification rates when direct carrier information is added to the equation.

 

“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.

 

About Payfone

Payfone’s award-winning Trust Platform™ and Trust Score™ bring trust to the digital economy by enabling businesses to instantly verify customers while thwarting fraud and cyberattacks in real-time; all within a privacy-first, zero-knowledge framework. Payfone serves 6 of the top 10 US financial institutions, and leading healthcare, insurance, technology and retail companies. Learn more at payfone.com and linkedin.com/company/payfone.

 

About Aite Group

Aite Group is a global research and advisory firm delivering comprehensive, actionable advice on business, technology, and regulatory issues and their impact on the financial services industry. With expertise in banking, payments, insurance, wealth management, and the capital markets, we guide financial institutions, technology providers, and consulting firms worldwide. We partner with our clients, revealing their blind spots and delivering insights to make their businesses smarter and stronger. Visit us on the web and connect with us on Twitter and LinkedIn.

 

Press Contact:
Yuka Yoneda
yyoneda@payfone.com
212.614.6927

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.

Did you KNOW…

In addition to battling fraud and delivering better user experiences, there is one area that is becoming mission-critical to every organization: privacy.

  • Results of an online survey conducted by IBM revealed that for 78% of US respondents, a company’s ability to keep their data private is extremely important: only 20% percent completely trust organizations they interact with to maintain the privacy of their data. Furthermore, 60% are more concerned about cybersecurity than a potential war.
  • Improper use or inadequate protection of consumers’ personally identifiable information (PII) is not only extremely damaging to the reputation of any business but can result in significant financial losses. The 2018 Cost of Data Breach Study published by IBM found that the average total cost of a data breach rose by 6.4% since 2017 to $3.86 million. The latest reported average cost is $148 per lost or stolen record. 
  • One of the most effective ways to eliminate the risk of re-identifying personal data in the event of a breach is to employ modern identity authentication solutions that use anonymous tokens and zero-knowledge architecture (a privacy protocol where only yes or no responses are passed as opposed to personal information.) 
  • The consumer benefit of zero-knowledge is that it minimizes the need to pass personal information in order to verify identity for security purposes. That means a more secure and convenient digital customer experience which is also more private, and meets the requirements of privacy based on consumer choice and controls in addition to thwarting fraud, ease-of-use, and compliance regulations. For Payfone, ‘Privacy above all else’ and is a core value and differentiator that is included in our Bill of Trust.

Are your customer identities adequately protected using tokenization and zero-knowledge protocols? To learn more, contact us to speak with an identity tokenization expert today.

Also on the topic of privacy, we recently hosted a Cybersecurity After Hours event at the IAPP Global Privacy Summit in Washington, DC. See a recap of the event here.

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But what does that even mean?

 

  • If you have a high degree of initial identity vetting during the enrollment phase, it changes the entire customer journey.
  • When a thorough (but quick) identity verification is completed at the sign-up or enrollment stage, enterprises are able to deliver a frictionless customer experience for every subsequent interaction.
  • Which means that annoying customer authentication questions, like ‘how many stop signs?’ or ‘what is the name of your first pet?’, will not be a deterrent to customer engagement when consumers come back to purchase something, inquire about your product, or need information.
  • How does this ‘magic’ happen? It all starts with giving every customer a tokenized Payfone ID that is private, secure and persistent. We will then check against authoritative verifiers of identity and real-time signals.
  • This allows enterprises to disrupt the bad guys’ fraudster journey, and eliminate the painful login processes that prevent sticky relationships.
  • Enterprises can also create a Payfone ID for their existing customers, so they too can enjoy frictionless customer experiences.
  • Getting it right from the beginning during the enrollment phase validates that customers are who they claim to be, and allows you to turn interactions into a delightful and engaging customer journey.

 

To learn how you can get the enrollment phase right for your business, click here.

 
Next week’s Did You Know? topic:
How to reverse the trend of lack of trust in the customer experience.
 

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