Until the turn of the century, identity documents or national identifiers such as social security numbers were the only means of verifying personal identity. Since then, the increase in mobile phone penetration, the evolution of the digital ecosystem, and an emphasis on privacy have driven innovations in digital identity that solve many of the issues faced by those more traditional identity verification methods. Today, our phone numbers are connected to most parts of our lives, whether they be personal, social, or financial. And because of the diversity and volume of digital data associated directly and indirectly with phone numbers, more and more companies are adopting them as superior identifiers to traditional identity verification sources.
Traditional identifier sources such as SSN and other national identifier registries centrally store static personally identifiable information (PII) such as name, address, and identity numbers. This information is often stale and can easily be found or purchased on the black market. Although other sources such as credit bureaus store dynamic transactional consumer data, they exclude several parts of the population that do not have a credit history. Increasing sophistication in data breaches and identity takeover fraud in recent times makes it challenging to establish the identity of someone who is transacting digitally. In short, it is ineffective to rely solely on traditional data sources to identify and authenticate consumers.
Considering these shortcomings of traditional identifiers, the digital identity world has had to turn to other identity verification options. The successor to SSN and other static identifiers needs to be:
Enter the mobile phone and the phone number. Today, nearly every adult in the world has a phone number. The GSMA reports that there are more than 5 billion mobile subscribers worldwide. In the US alone, there are over 700 million registered phone numbers. These phone numbers and the real-time signals they provide are rapidly gaining momentum and adoption as a more secure and privacy-enhancing alternative to SSNs. Juniper Research estimates an 800% growth in mobile identifier services by 2024.
Over the last decade, several countries have launched programs using the phone number to identify consumers and deliver public and private services effectively and securely. In emerging markets, the ubiquity of mobile devices has made them the primary medium to increase inclusion. For example, in India, most of the 1.2 billion+ records in the centralized citizen identity database are linked to a mobile number. The association of phone numbers with identifier data lends the foundational infrastructure upon which many public and private services are built and securely rendered to consumers.
However, the association of phone numbers to static national identifiers alone does not ensure foolproof consumer identification.
Phone numbers provide a rich source of information about a consumer’s identity. The tenure of a phone line, event history, frequency of usage, location, and usage behavior provides comprehensive insights into the consumer’s digital footprint. Since these signals are generated over a long period, they lend credibility to a consumer’s identity. Attributes associated with the phone number can then be paired with device information and data from other authoritative sources to enhance the efficacy and accuracy of identity verification and authentication.
Insights and intelligence from Phone-Centric Identity data help progressive organizations implement the “PRO” model of identity authentication and verification based on the following three checks to align with NIST SP 800-63 identity guidelines:
Unlike legacy identity verification methods using traditional data sources, Phone-Centric Identity provides real-time identity authentication based on dynamic and current data. Real-time validation of these signals helps eliminate sophisticated fraud such as synthetic identities. Mobile devices, by design, also provide passive authentication with encryption. Phone-Centric Identity provides organizations with an opportunity to eliminate friction in their onboarding and servicing process flows, thereby improving customer experience.
Apart from enhancing customer experience, Phone-Centric Identity helps improve verification rates. Identity approvals can happen with a higher degree of confidence, and manual reviews can be significantly reduced. Phone-Centric Identity, therefore, provides organizations with an opportunity to rationalize their fraud management operations, thereby reducing OPEX.
Interested in learning how Phone-Centric Identity can improve your identity verification strategies to make your customer experiences safer, faster, and easier?
Prove is the modern platform for Phone-Centric Identity and is used by over 1,000 enterprises and 500 financial institutions, including 8 of the top 10 US banks. Get in touch with us to learn how we can help you accelerate revenue, mitigate fraud, and reduce OPEX with our proven approach to identity verification and authentication that is tied to the phone and the phone number.
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