How to Build a Frictionless, Fast, and Secure Customer Onboarding Process

February 5, 2024

The digital world is “always-on” and “real-time,” and users expect effortless access to services whenever and wherever they desire it. Those businesses that can fulfill this expectation will gain brand value and economic expansion – they’ll quickly become the go-to destination for consumers for their financial services, online entertainment, and retail needs and for all other types of digital services that are part of today’s online marketplace. By cultivating a community of delighted customers, these businesses will gain a growing audience of happy customers who spread the word that this organization excels where others fall short.

Yet, the quest for customer expansion through digital channels is not a straightforward process. For businesses to connect with, and acquire new customers, they have to do more than just provide goods and services.

These enterprises have to strive to strike a balance between making customers happy and protecting their own organization and its other users and data. Essentially, companies must deliver an outstanding customer experience that results in satisfied users but it must simultaneously mitigate their exposure to risk by minimizing the potential for fraud.

A superior customer experience entails swift and seamless interactions, with users being able to rapidly onboard so they can quickly utilize new services within minutes or even seconds after joining. The speed required to enable that, however, might cause some organizations to relax security measures by being less discerning in their customer identity verification and validation.

But is it a trade-off? Do companies have to choose between delivering seamless experiences or mitigating fraud? Legacy identity verification providers would rather you not think in those terms. They want you to focus on reducing fraud because their solutions will likely support that goal. But they typically create more friction in order to do that. Prove doesn’t think you need to make a choice. You can do both– and your customers deserve both.

A Seamless & Secure Customer Onboarding Experience

Digital identity verification and fraud prevention employ diverse approaches, but they are most definitely not mutually exclusive.

Some providers specialize in a single method or technology to identify and validate users, while others amalgamate multiple solutions and approaches, acquired or partnered, each varying in accuracy. Certain providers rely on specific identity elements of Personally Identifiable Information (PII) for identity verification. Document-centric providers, on the other hand, verify identities by examining government-issued ID documents and often require a selfie or video to ensure liveness and match the ID document photo, irrespective of risk levels. Another category of providers concentrates on fraud and cybersecurity signals to identify bot activity or other fraudulent behavior.

The majority of traditional identity verification solutions were not designed with a focus on the customer experience. Consequently, their procedures are structured around the inherent conflict between meeting consumer expectations and implementing the necessary safeguards mandated by the company.

The array of options is seemingly never-ending, but most are designed to address a narrow scope of the actual goal – accurately verify users, but do it without unnecessary friction. Many solutions on the market think of it as a binary choice—either a seamless customer experience or reduced risk. It’s not a good choice because the needs of consumers and companies are not dissimilar. They want both and they want it packaged into a single solution.

Addressing Two Critical Goals With a Single Solution

The catch lies in the fact that solutions prioritizing a swift experience often rely on limited data sources for identity and fraud decisions. Surprisingly, a considerable number of solutions adopt this approach, making them incapable of offering a comprehensive and accurate understanding of the identities they verify. The outcomes they provide are either incomplete or necessitate additional step-up methods and manual reviews, incurring costs, introducing inaccuracies, and potentially leading to customers abandoning transactions, resulting in lost revenue.

The drawback of not going deeply or expansively into data sources for applicant identity verification is that enterprises end up rejecting many qualified applicants. These organizations may unknowingly dismiss potentially good candidates because they are not thorough in their identification efforts. This often stems from the use of solutions that only aim to identify individuals with readily available information, such as credit bureau data. The approach is to quickly accept or reject applicants based solely on this limited dataset.

However, there exists a substantial segment of consumers who cannot be easily identified through standard data sources. This group includes individuals without digital footprints or those who remain invisible to the financial industry. Consequently, legacy solutions, relying on traditional methods, categorize them as ineligible for credit, goods, or services, leading to their rejection.

Consider demographics like Gen Z and Millennial generations, as well as newcomers to the country—they may have thin or non-existent credit histories. This doesn't necessarily imply they are risky customers; it simply means they are challenging to identify through digital channels. Legacy solutions might flag them as high risk, resulting in a significant number of false positives, many of whom are genuine customers. Ultimately, this represents missed revenue opportunities.

How Identity Verification Drives Better Customer Onboarding… and More Revenue

How can a technology buyer navigate the identity verification market with its vast multitude of messages from companies promoting customization, configurable workflows, KYC, student data, and other solutions to stand out in a crowded field? While providers strive for solution distinctiveness, the key lies not in specificity but in identity accuracy.

Organizations relying on these solutions may be inadvertently turning away valuable customers by rejecting them based on limited and outdated data. The inability to correlate known good and bad identities further compounds the issue. A more precise strategy involves leveraging redundant data sources, account performance data, and connections among these sources to paint a more comprehensive picture of individuals. This approach increases the acceptance of genuine customers unless they exhibit genuine signs of potential risk.

In digital business, instant access is essential. In fact, it may be one of the most important, foundational pieces of effective customer acquisition. Economic growth and the delivery of essential services depend on granting access to verified customers, and this process is hindered when flawed identity decisions lead to fraud, bias, and adverse economic outcomes. A superior approach involves implementing identity verification that paves the way for the verification of legitimate identities on the internet while concurrently eradicating fraud. This ensures the scalability of the digital economy to meet the evolving needs of the world.

Consider the potential for swift customer acquisition. Top global banks and financial institutions can generate over $5 billion in quarterly net interest income, emphasizing the importance of swiftly channeling customers' funds into accounts to commence earning profits. For banks, expediting the customer onboarding process and making their accounts operational is crucial to accelerating revenue. Offering customers rapid access translates to an accelerated journey toward increased revenue.

Prove Pre-Fill® Re-Invents Onboarding and Fraud Prevention

Prove makes it a point not just to develop products, but to provide our customers with solutions that will fundamentally improve their business. Prove Pre-Fill®, Prove’s accelerated onboarding solution, has redefined the dynamics of the entire customer journey by auto-filling forms with information from trusted data sources (with the consumer’s consent), requiring only the consumer’s validation. This innovative, patented process harnesses billions of real-time signals sourced from authoritative, phone-based references.

The foundation of this approach revolves around the information derived from a consumer's phone. Leveraging the fact that 99% of consumers own a personal phone number, the Phone-Centric Identity approach by Prove authenticates and verifies individuals based on their possession of the phone (using 128-bit encryption bound to a mobile phone) and a behavioral-based reputation profile, allowing Prove to assess user risk. The result is a rapid, frictionless user experience, ensuring accuracy in identity checks.

Powering this process for the Prove Pre-Fill® solution is the use of cryptographic authentication, to ensure proper possession of a particular device before the user’s data is auto-filled.

The Prove Pre-Fill® solution accomplishes the following crucial aspects of the identity verification process:

  • Automatically fills online forms with consumer data from reliable and trustworthy sources.
  • Verifies consumer identities to effectively counter account opening fraud, including synthetic identity fraud.
  • Offers users a faster, more secure sign-up process, enhancing their overall experience.

This innovative solution introduces a novel onboarding experience, where consumers' onboarding forms are pre-filled (also known as auto-populated). The information used for auto-populating is retrieved from authoritative sources, requiring the consumer only to confirm or edit the answers.

Fraudsters attempting to auto-fill forms with stolen or fake information encounter two formidable challenges. First, their lack of knowledge about the user's actual information makes it difficult to validate auto-populated answers accurately. Second, the process establishes a barrier too complex for fraudsters to overcome, leading many to opt out of the process. In fact, companies using the Prove Pre-Fill® solution experience a mere 0.03% fraud rate.

More Customers, Less Fraud – Faster

A perfect example of this in action is Bilt Rewards, a Prove customer. The Bilt Mastercard enables cardholders to earn points by paying their rent at any apartment in the US with no transaction fees. Bilt has gained popularity since launching in June 2021 and was featured in CNN’s list of best cards with no annual fee, among other major media placements, but was eager to further elevate and differentiate its customer experience with best-in-class identity verification technology while also mitigating credit card application fraud (synthetic identity fraud at the time of account opening).

Prove has enabled Bilt Rewards to validate phone ownership and possession for 90%+ of their users. By using the Prove Pre-Fill® solution, Bilt has provided its customers with a faster onboarding experience, with fewer steps the customers need to go through to sign up.

For digital organizations, providing prompt access to services is an essential aspect of how they meet ambitious revenue targets and establish themselves as industry leaders. The foundation of economic growth and the delivery of essential services hinges on swiftly and efficiently granting access to validated customers while thwarting access to “bad customers”—namely, fraudsters. The Prove Pre-Fill® solution streamlines the consumer experience, minimizing their efforts and virtually eliminating friction. Enterprises leverage the Prove Pre-Fill® solution to propel their customer growth ambitions while relying on sophisticated decision-making to mitigate fraud.

Interested in expediting onboarding, rapidly acquiring new users, reducing abandonment rates, and enhancing fraud prevention? Connect with a digital identity solutions expert today.

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