If you’re a marketplace executive, you already know that digital identity is a buzzy topic right now. Marketplaces and sharing economy players are realizing that, when done right, digital identity can unlock amazingly smooth and delightful customer experiences that can really differentiate companies from the competition. At the same time, advanced identity verification and authentication technology can mitigate some of the biggest risks that marketplaces are dealing with, such as fake accounts and account takeover.
Marketplace Risk recently invited Prove’s VP of Marketplaces, John Greene, and Head of Product, Tim Brown, to educate their audience about 5 major identity trends every leading marketplace should know for 2022. Read on for a summary of the conversation, or watch the full video here.
(Answers edited for brevity and clarity)
Why is digital identity such a buzzy topic right now with marketplaces? What are marketplace customers looking for in this space?
Tim: Marketplace customers are actually using digital identity as an enabler and a differentiator. Usually, you think about digital identity or identity verification as a fraud and risk reduction measure, and it is. However, given the offline interaction of many marketplace transactions, trust & safety are HUGE drivers. Whether it’s verifying the identities of buyers and sellers who are about to meet or ensuring the safety of a driver and passenger in a rideshare: having a trusted and safe platform is paramount. And of course, revenue is always a big driver for any vertical—so ease of onboarding with as little friction as possible is important.
What are the specific identity proofing & fraud challenges marketplaces are running into today?
John: With any vertical, accurately identifying your customer has multiple challenges. If I could narrow them down in the marketplace vertical, I’d say there are two that jump out:
Challenge 1: Accessibility. Ease of onboarding isn’t just a nice to have—it’s a necessity. Many identity proofing techniques introduce a lot of consumer friction—I’m thinking of capturing driver’s licenses, selfie captures asking you to perform some kind of activity to prove you are alive, things like that. In some instances, that level of friction is warranted. But for most consumers, they want to easily onboard onto your platform through a low-friction experience. Obviously, you want to onboard with the lowest fraud rate but do so with the highest success rate and the lowest friction possible. Typically, the onboarding process is THE first thing a customer sees when engaging in your platform. That first experience will create a lasting impression and has a direct correlation to abandonment rates. And, of course, abandonment directly correlates to revenue. We’ve had customers report 5% or more abandonment rates with their current identity verification vendor. We were able to drive down these rates substantially and enable our customers to drive more revenue at the top of the funnel.
Challenge 2: Put simply, risk. How do you identify REAL buyers and sellers? Do you need a trade-off between risk and onboarding friction? Are there other types of risk present, like account takeover, payment fraud, etc.?
What are the consequences that marketplaces face when fraudsters succeed?
John: Imagine getting into a rideshare not knowing that your driver had used a fake identity to gain access to the marketplace. Or not having a strong identity tied to someone you are about to meet face-to-face to buy something? Marketplaces risk the safety of their customers and workforce as well as their reputation if they don’t have strong identity proofing procedures in place. Account takeover and payment fraud are especially important. Payment fraud (chargebacks, abusing peer-to-peer payments) can all be reduced by using a strong identity verification system.
What are the top 5 trends leading marketplaces should know?
- Consumer fraud is rising, impacting trust and safety.
- Frictionless, secure onboarding.
- Identity techniques are evolving (for a deeper dive into “how,” watch the full webinar here.
- Use of ML/AI and Hardware Root of Trust to identify fraudsters.
- Marketplace adoption of Reusable Identity.
What is Reusable Identity?
Tim: Reusable identity is becoming something of a buzzword in the identity space. It simply means that the consumer has control over an identity that is portable and can be used in various ways with a variety of different channels. Let’s say I have a Prove Identity—I could use that to assert my identity to my rideshare app, and the rideshare app would comfortably know that I’m in possession of that device and my identity is tied to it with an extremely high confidence level. That same identity could then be used to assert my identity to my bank, my grocery delivery service, etc. That’s the reusable aspect of it.
Putting the trends into action: What does modern marketplace onboarding look like?
Tim: What you’re seeing here on the screen is a faster, more simplified onboarding experience that enables new customers to sign up in a more frictionless way while also mitigating fraud.
On the first screen, the consumer consents to continue with a more convenient experience. They can then enter their birth date to continue.
Behind the scenes, the authenticated data is obtained from authoritative data partners and instantly populates the form. The consumer can then simply approve to continue, or they have the option to edit.
And just like that, the customer has successfully been onboarded on mobile.
With this modern flow, new customers can be onboarded 79% faster (typically in just 10 seconds).
Conclusion
Onboarding is a critical first impression for customers, and any step-up procedure that slows down the process with unnecessary friction will drive away customers and hurt the bottom line. Prove Pre-Fill allows you to prevent fraud that could damage your marketplace’s reputation while supercharging onboarding and reducing onboarding abandonment. To learn more about why the leading marketplaces are leveraging Prove Pre-Fill, watch the webinar or contact us for more information through the form below.
To learn more about Prove’s identity solutions and how to accelerate revenue while mitigating fraud, schedule a demo today.
Keep reading
Learn how customer due diligence (CDD) verifies onboarded customers to keep your product secure.
Learn about the new Developer Portal and how it can help developers implement identity verification.
Learn how to streamline identity verification with KYC software while maintaining a seamless user experience.
