Identity Verification to prevent Identity Theft is not a new concept. It has been around since the early days of banking and became more nuanced as the financial services industry embraced technology. Though the general concepts of identity verification have remained the same, the execution of those concepts has changed significantly. Not only is the goal to keep your data and your customer's data safe & secure, but it is also crucial that the process is quick, seamless, and a good experience for existing insureds and future customers.
Identity verification can come in many forms: email verification, phone verification, address verification, biometrics, and more. The one thing these have in common is that they are to ensure a person is who they say they are. The goal is to Know Your Customer (KYC). The primary reason customer verification is needed is to prevent fraud, which is higher in industries like banking, finance, retail, and insurance.
Verification of a person involves making sure the information they provide, in one form or another, is valid. This information comes in three forms: what the person knows (e.g. password); what they have (e.g. smart card); or something they are (e.g. fingerprint). Authentication, the close relative of verification, is about making sure that a person, once verified, is authorized to have access to a particular system or subset of a system. Verification and authentication can be implemented in a variety of ways. Here are four examples:
1. Knowledge-Based Authentication: This is used to verify a user by asking a series of questions that can indeed verify who they are. The questions need to be easy enough to remember for the user, but not ones that anyone can guess.
2. Two-factor or Multi-Factor Authentication (MFA): MFA requires your customer or user to identify they are who they say they are through extra layers of protection during the sign-in process. This is usually a code or link that is being sent to their email or phone.
3. Online Document Verification: This verifies document authenticity including passports, driver's licenses, or any other government-issued forms of ID.
4. Federated Identity Management (FIM): FIM allows users already identified in one system or domain to utilize that digital identity to access other systems or domains. An example might be accessing an application on the internet using your already-established Google identity.
The insurance industry has had to come a long way in a very short time. Not too many years ago, insurance systems were among the most outdated of any industry. However, 2020 and the pandemic seemed to begin accelerating change. According to Accenture, 88% of insurance customers demand more personalization from their insurance providers. Expectations for the customer experience have never been higher and insurance providers need to meet these higher standards in order to obtain new customers (Source: Accenture, The human paradox: From customer centricity to life centricity, July 26, 2022).
Though the ultimate goal is to know your customer (KYC) and to keep their data safe, it is also important that they aren’t frustrated in the process of doing so. Sometimes, the identity verification process can seem very cumbersome and clunky. This is not ideal. So what is the solution? How do you make the process better? Let's explore some ways...
1. Automate, Automate, Automate: The number one way to increase sales and retention is to reduce or eliminate the manual processes and automate them. Something as simple as account creation and filling out forms could considerably increase sales when friction is reduced.
2. Make Waiting Easier: What does that even mean? Simply put, give your customers something to do while they wait. Just like giving kids at a restaurant crayons and paper, you can give your customers something to do or read. Give them more info or stats on the product or service they are trying to access, promote helpful resources or add-on products, or give them a task such as gathering or saving documents they will need later on.
3. Get on Board with Add-On Software: Software specifically created for identity verification can be a game changer for you and your customers. Proven workflows and regulation compliance are already addressed in these third-party solutions.
As the insurance industry goes more and more digital, the number of add-on services & software may seem overwhelming to manage; claims, underwriting, billing, etc. That is where a team like Noodle Group comes into play. Noodle Group can assist your team wherever you need help—configuration, integration, or management. Noodle Group's experience can take the guesswork out of digital transformation and make sure you leverage innovations such as identity verification, across the whole insurance value chain. Reach out for a no-cost consultation today!
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