This might sound strange coming from someone who markets fraud prevention solutions for a living but if a vendor tries to sell you a one-size-fits-all silver bullet solution that will prevent all forms of fraud… RUN.

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The truth is, fraud is an extremely complicated and high-stakes game of whack-a-mole. As soon as industries develop a powerful way to prevent one fraud vector, fraudsters pivot to another. This is why fraud executives develop security flows that contain multiple checks to make targeting their company as time-consuming and difficult as possible. Remember, fraudsters will always pick on the easiest targets first. 

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Today, many banks and companies rely on document scanning as part of their security flow. While document scanning has a role to play in today’s fraud landscape, banks and companies that rely on them too much risk driving away customers and hurting their bottom line. 

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In this blog, I’ll provide an overview of what document scanning technology achieves and why you should use it primarily as a step-up procedure after a user has failed to pass a more frictionless, economical, and efficient verification method. If you’re already familiar with the core tenets of identity verification, feel free to skip the next paragraph!

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There are three pillars of digital identity verification. As a user, you can verify your identity with something you know (i.e. a password, a PIN), something you have (a driver’s license or cell phone, for example), or something you are (think of this as an inherent and immutable trait unique to an individual—your fingerprint, for instance). Document scanning is an example of a possession check because they fall under the second pillar: “something you have.” Unfortunately, they have some serious limitations worth considering. 

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Here are 3 reasons why you should limit the use of ID scanning in your onboarding flow:

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• Document scanning increases onboarding abandonment: In today’s fraud landscape, it’s easy to forget that the vast majority of users visiting your website or app are 100% legitimate. In fact, despite the astronomical cost fraud has on our economy, only a tiny fraction of users are fraudsters. Unfortunately, some security flows (looking at you, document scanning) add so much friction to the user experience that they drive away legitimate customers in droves (causing a low pass rate). We’ve all had the experience of tentatively lifting our IDs to the camera on our computer or phone to wait for the ID scanning to take place. On the first try, our hands are too shaky. On the second attempt: it’s too dark. We turn on a light and try again. Now it’s too bright and there’s not enough contrast between the table surface and the ID. Frustrating, right? While scanning IDs is easy in theory, it can be finicky and unreliable in practice. No wonder so many legitimate customers drop out midway through.
• Document scanning is expensive: Because document scanning tends to be priced by volume and pass rates vary widely across industries, the cost of ID scanning can become incredibly expensive very fast. A more strategic and financially prudent method is to invest in technology that actually increases pass rates and accelerates onboarding for legitimate customers. After that, you can ID scan the tiny minority of folks who fail the initial verification methods, driving down costs dramatically. Even in cases when ID scanning should be used like the lending of large sums of money, best practices dictate that you should also leverage phone signals for even more security.
• Document scanning is high-maintenance: The guided user flows necessary to teach users how to scan their IDs correctly are difficult to design. Also, because states frequently update the designs of their IDs and privacy laws are always evolving, the systems need to be updated constantly. Remember, the more IDs your systems scan, the bigger problem you will have if there is a data breach. 

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Think of ID scanning as your hot sauce of digital identity verification: a little goes a long way. Your bread and butter solution—the one that is used to verify the vast majority of your users should be more frictionless, less expensive, and easier to maintain. Prove’s phone-centric solutions check all three boxes.

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Phone-centric identity should be used as the primary verification method in all use cases while ID scanning and other methods should be used as step-up checks in some cases. By leveraging something that the user always has on their person to conduct a possession check—the mobile phone—Prove provides a more convenient and smarter way to verify a user’s identity. Rather than having to retrieve their ID and try to scan it, users can simply click on Prove’s Instant Link. Prove enables companies to then check for the reputation and ownership status of the phone and even Pre-Fill forms subsequently with verified data. By leveraging a dynamic authenticator like the phone number rather than a static form like a driver’s license, companies can accelerate onboarding, reduce customer abandonment, and prevent fraud.

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To learn more about Prove’s identity solutions and how to accelerate revenue while mitigating fraud, schedule a demo today.