The 4 types of digital identity verification — and how to know which is right for your business
Like every organization, you need to keep your online users’ identities safe. But you need the right digital identity verification solutions to do it.
A poorly designed digital identity verification process is ineffective against potential fraudsters and frustrating for trusted users. Without strong and seamless identity verification, you’ll introduce unnecessary friction to your trusted users, who will grow annoyed at being treated like a threat. At the same time, you’ll allow actual threats to sneak by undetected.
There are a plethora of identity verification solutions available, but they each have benefits and drawbacks. For example, a solution might be ideal for catching certain types of identity fraud, but be ill-equipped to deal with others.
So to protect trusted users, you have to understand the nuances of common digital identity verification solutions and know which solution to apply to which situation.
Four digital identity verification solutions to consider
A multi-layered security strategy is ideal for verifying users’ identities. This strategy forces fraudsters to leap through multiple hoops to gain access to your systems — making unauthorized access much less likely.
Here are four of the most common digital identity verification solutions your business can layer into its defenses:
Passwords are by far the most common identity verification tool. However, passwords can be more vulnerable to compromise than other identity verification measures. Users often reuse passwords or create weak ones. So it’s relatively easy for fraudsters to steal them through social engineering and other scams.
However, as long as they’re not the only line of defense you have in place, passwords can still prove effective in low-risk situations, e.g., a trusted user signing into an account they regularly use. Rather than completely discarding password protections, you can continue to use them while using more advanced security measures as backup.
Two-factor authentication requires users to provide two separate forms of identification to verify their identity. The first step in this process typically involves a password, while the second layer is often a code sent to a user’s phone or a facial or fingerprint scan.
Two-factor authentication is effective in high-risk situations, where additional security is appropriate, e.g., when opening a new account or updating contact information on an existing account. But because it adds friction to the user experience, two-factor authentication isn’t ideal in lower-risk scenarios. To avoid frustrating trusted users, only use two-factor authentication when the situation is risky enough to warrant it.
Behavioral analytics tools analyze large datasets to identify deviations in typical user behaviors. These behaviors might include the time of day a user typically logs in and the IP address and location they log in from.
These tools give businesses greater visibility into potential fraud risks. If a user who typically logs in from their office during business hours logs in at 3 a.m. from another state, it’s a warning sign that the account could be compromised. Your business can then introduce appropriate amounts of friction, such as notifying the user of the login attempt, to ensure that it's valid.
While behavioral analytics are typically used for fraud detection and risk assessment, passive behavioral biometrics are used primarily for authentication. Passive biometrics analyze user behavior without prompting the user to take specific actions, like providing their fingerprint. Instead, these tools analyze how users interact with the platform using factors like their typing cadence, mouse movements, and time spent on each webpage.
Passive biometrics are ideal for catching sophisticated attacks, e.g., automated attacks that attempt to imitate human behavior. While malicious bots can mimic human behavior with some degree of accuracy, they can’t fully replicate a user’s idiosyncrasies. There is always a slight but noticeable difference between the trusted user’s behaviors and the imitation of them. Passive biometrics spotlights these differences and gives your business greater confidence in knowing when to step in and when to step back.
A multi-layer approach to identity verification
There are a wide variety of identity verification options available to your business. Each of them can be effective in the right situation. To keep your user’s identities safe and prevent fraud, you must understand how to strike the right balance between them.
Regardless of which solutions you choose, you should work with trusted providers who can assist you with the implementation and continued maintenance of your solutions. The combination of quality identity verification solutions with communicative solution providers sets your business up for identity verification success.