Nov 12, 2010 Brian Bradley
Because consumer interactions are evolving it is very important not only for simple banks' clients but also for every business owner to understand what the difference between ID Verification and ID Authentication is. We'll try to explain what each of them means and how both are critical to your business's overall success.
ID Verification: Identity verification is simply asking a consumer to present a form of identification out of his or her wallet to prove who they are. Identity verification alone is required by some businesses and is simply an extra layer of security for others. From fake IDs to intricately designed scams, those who would exploit businesses are quick to work around identity verification. And those workarounds mean that businesses, consumers and confidential information could be at serious risk. That's where authentication comes in.
ID Authentication: Identity authentication takes verification to the next level and is especially important when dealing with online transactions. When verifying a consumer's identity in person, there can be nonverbal cues or simple inconsistencies that alert a business owner to possible identity fraud. However, those cues are invisible for online transactions. In the world of complete order automation, if the consumer can fool the security protocol, the consumer can put your business at risk. Identity authentication not only requires consumers to provide qualifying identity information, it also requires the individual to provide information that is not easily stolen or guessed. These are sometimes called "out-of-wallet" questions and can ask anything from the names of family members, to the amount and frequency of a past loan payment. Out-of-wallet questions pertain to information only the genuine person could know.
These two strategies are very important and implementing both identity verification and authentication into your business will protect it from identity fraud and keeps it compliant with government security regulations. However, there is much to consider in how these plans are implemented into your transaction process. Simply put, if verification and identification procedures take too long, are too tedious or too scrutinizing, the customer may feel uncomfortable and take his or her business elsewhere. Therefore, it's important to implement verification and authentication procedures that are thorough and accurate while still respecting the privacy of the consumer and preserving transaction convenience.