By Zac Cohen, COO at TruliooIf it wasn't already apparent before COVID, the future of identity is digital. The pandemic imparted an almost overnight shift to a digital-only world, which has accelerated this vision and driving even greater demand and investment in identity verification.According to Fuel by McKinsey, the Identity Verification as a Service industry will grow to $20 billion by next year (2022), with a Total Addressable Market (TAM) growth of 9-15 percent annually. With vast numbers of people forced online to access healthcare and financial services, purchase groceries and consume entertainment, the ability to verify and protect digital identity has become central to everyone's ability to survive and function during the pandemic. And while businesses and consumers have coped amazingly well considering the fluctuation in regulations, restrictions and circumstances – it has not been without challenge.Social distancing and imposed lockdowns have created the perfect storm for cyber criminals. Hackers prey on sites and services with weak – or worse, negligible – authentication protocols. At the other end of the spectrum, over one billion people globally lack a legal form of identification, preventing them from accessing even basic financial services and partaking in a myriad of other important activities while being confined indoors. This is set against a societal trend of the consumerisation of services. Thanks largely to Amazon Prime, consumers expect rapid, seamless service at the click of a button. It has posed a tricky dilemma to businesses: In the race to create more personalised and meaningful brand interactions for customers, they must collect-and secure-more data than ever but this must not impact on the experience. It has thrust identity verification (IDV) to the fore, driven largely by five main factors:Simplicity of onboardingDigital transformation is at the heart of almost every organisation but many have had to pivot plans and roadmaps on account of the pandemic meaning programmes that would usually take months or even years in a matter of weeks. It's been the only way for them to survive but, of course, this brings risk. Think about the millions of people that are now using digital services for the first time, whether that's shopping for groceries, banking and paying bills or accessing online healthcare services. Many of them are the most vulnerable in society, from previously marginalised groups who weren't online for many different reasons. It means that businesses across all sectors have had to improve the speed and simplicity of the onboarding process to adapt accordingly.A customer-centric strategy starts with user experience It's no secret that today's consumer expects the best user experience. Not only have organisations realised the tie between customer experience and revenue, but data shows that customers are willing to pay more for a better experience, and often experience trumps both price and product. Then consider the more than 70 million digitally-savvy millennials who have grown up with internet access and who expect near-immediate response times. For businesses, providing the customer experience that clients demand while ensuring security is all about balancing an acceptable level of risk with the right amount of friction; also known as risk-based approach.Rise of remote More and more businesses are embracing the concept of remote work. Studies show that the number of people working from home has risen by approximately 91% over the last 10 years. Remote working means that employees will use different servers to access and share data from the organisation. In such an environment, IDV is critical. In order to support this sudden shift to remote working, massively accelerated by the COVID-19 pandemic, organisations, like HMRC for example, are increasingly using identity verification and authentication for tax returns, and government services needing to verify lawyers and notaries. Because remote working forces employees to store their business information on their devices, anyone can (in theory) get the gadget and log into the organisation's network. IDV is a massive barrier and deterrent here and, as remote working becomes more commonplace, even after the pandemic, the need for robust IDV and authentication will remain.Increasing cyber threats Security remains a macro challenge that is relevant to all sectors. But, of course, it is more pertinent to industries such as banking and financial services – anything where high-value data is being exchanged. As banks have shut their branches, investors have flocked online to digital platforms and consumers have been reliant on the fluid movement of digital funds, it has exacerbated the need for best-in-breed security when it comes to IDV in an effort to cut down fraud. In recent years, fraudulent digital financial transactions amounted to EUR 1.8 billion annually in Europe. In the UK, digital payments and remote banking fraud totalled GBP 152.9 million in 2018. It has resulted in banks and other financial service providers using biometric technologies like selfies for the remote identification of their customers. Though, as organisations adopt digital transformation and biometric technology, it reinforces the need for stringent IDV to keep pace with innovation.Expect the unexpected It goes without saying that the impact of the COVID-19 pandemic will be long-lasting in our habits, if not absolute in how the world reacts to such disruption. Many experts believe that while the current pandemic may be extreme, it may also not be the last, so a contingency plan for a repeat of 2020/21 is prudent in the long-term. Next time, businesses can be ready in a way they were not this year, especially if they continue to make improvements to digital services at the rate that we have seen in the last 12-18 months. This is particularly the case with for organisations that are required to verify the identity of their customers and perform due diligence are reporting that this is impacting on their business. A root of trust In today's digital economy, every outcome depends on privacy and identity as a point of trust, a perimeter of security, an enabler of relationship management, and a means of service personalisation. That applies equality to consumers and businesses that transact online. Organisations need to be looking to reap the benefits of security and long-term customer value without incurring many of the technology, operational, regulatory, and security risks that can come with trying to use a solution that is not fit for purpose. Digital transformation has accelerated dramatically as a result of the COVID-19 pandemic. Across all sectors, businesses that already had security measures that included identification, authentication and verification in place have been able to thrive while others are playing catch-up. The shift towards identity verification as a key strategic driver for organisations is not simply a temporary trend but an important, ongoing factor for ensuring long-term success.
Guest Post: The major trends fuelling IDV investment
