Identity Verification Action Plan with Insights from The Forrester Wave™ Identity Verification Solutions Q4 2022

The entire TransUnion TruValidate team is thrilled to have been named as a Leader in The Forrester Wave™: Identity Verification Solutions, Q4 2022. We believe we were recognized for delivering value to our clients with real solutions to real problems, which is incredibly gratifying. Beyond the value of an independent vendor evaluation, it’s helpful to point out what we learned about Identity Verification (IDV) from the rest of the Forrester report.

Identity verification is a complex problem

The reality is that our identity is not private — chances are that some or all our personal identity has already been stolen. The unrelenting pace of data breaches resulted in 165 million individuals impacted by data compromises from January to the end of September 2022, according to Sontiq, a TransUnion Company. 

“With the rise of identity theft across all industries, digital IDV is becoming more central to the customer digital journey. Firms should only issue login credentials to legitimate users after the successful completion of an IDV process,” according to the Forrester report.  

As a fraud professional, one’s default perspective should assume all identity data is compromised: living somewhere on the dark web where criminals can access it and will attempt to use it. Taking steps towards ensuring that consumer information is not being used to open fraudulent accounts, nor that parts of consumer identities are used to create synthetic identities to bypass fraud controls, is all of our responsibility.

The critical issue is determining how to keep our fraud controls from becoming overly intrusive or burdensome on the customers we’re trying to serve. This is especially true for organizations whose prospective customers require an application to access services. Online applications are the gateway fraudsters use to leverage stolen identities to open new accounts and perpetrate fraud: 

• Bank accounts

• Credit cards or other loans 

• Store cards

• Mobile phone accounts 

• Government benefits (e.g., unemployment benefits)

Comprehensive IDV helps protect online applications  

The great challenge with online applications is that the applicant is basically anonymous at the start of the process. Identity proofing, the process of verifying the identity of a person, involves collecting and verifying information about a person's identity to establish they are who they claim to be. But because the interaction is happening digitally, the device and the user session becomes the proxy to the applicant. The device should be assessed for fraud risk without causing unnecessary friction to the applicant, such as delaying their auto-approval, or waiting for more information to complete a data append, both of which can feel burdensome for the user.

According to the Forrester report, customers looking for IDV methods should search for these key IDV capabilities: 

• “Provide phone-number-based verification for low-friction, implicit IDV.”

• “Allow for email-address-based verification that is inexpensive and unobtrusive.” 

• “Detect known fraudsters and nonhuman activity with behavioral biometrics.”

Digital insights adds the necessary assurance without impacting the customer experience

Digital insights assess the risk of the device by evaluating information about a device in order to establish that it is has not been used to commit fraud in the past, that it is in the hands of the authorized user, and that it is being used in a way commiserate with typical consumer behavior (as opposed to fraudster behavior). Digital insights leverages a multi-prong approach to risk assessment:

• Device fingerprinting 

• Device-to-account and device-to-device linkages

Device fingerprinting (or device reputation tracking) plays a prominent role in assessing risk online, applying historical activity and consortium data to determine whether a device has been linked to fraud in the past. The reputation of known devices helps organizations assess risk. But there’s a danger in relying exclusively on device reputation: fraudsters often cycle through real or emulated devices to thwart the tracking of previously seen devices. Unknown devices may present a question mark to a device fingerprinting solution, leading to an increase in fraud risk, false positives and unnecessary friction. Without additional risk signals, there’s no way to determine whether the users behind new devices deserve a warm welcome or additional scrutiny.  

Device-to-account linkages tracks relationships between devices and accounts by leveraging device history and confirmed fraud reports in real time from our extensive global network of fraud analysts. Advanced analytics combined with machine learning models and granular reporting capabilities can spot suspicious transactions and device patterns including advanced evasion techniques, bots, virtual environments and suspected fraud rings.

Identity verification powered by more data and better data linkage 

Identity verification is the amalgamation of these complementary identity proofing techniques, layering insights about device reputation, device-to-account linkages and device behavior into a decisioning rubric that helps identify good consumers while reducing false positives, undue escalation friction and manual reviews. Low-risk devices and behavior receive expedited customer experience, while higher-risk devices and identities encounter additional verification steps. By leveraging a wide range of identity signals in the background and assessing the connections between these signals, organizations can more confidently secure trust across channels, while delivering improved customer experiences.

Gain more insight to The Forrester Wave™ for Identity Verification Solution Providers, Q4 2022

To receive even more insights on the IDV landscape and Forrester’s criteria and methodology in their latest Identity Verification Wave, attend our upcoming webinar featuring Andras Cser, Forrester vice president and principal analyst and the lead author of the Wave. You can also click here to receive a complimentary copy of the Forrester Wave™.