Are you in charge of a product or service facing internationalization or increasing regulatory demands and consider different solutions for identity verification? There are a number of different options when it comes to online identity verification, all with respective pros and cons.
The choice between different identity verification tools can have long-term consequences for customer acquisition, customer onboarding, and customer interaction. There are a number of criteria we think should be taken into consideration before that choice. In this article, we have lined up the criteria that we think should guide the choice of type of identify verification solution.
Does your solution support identity documents from all over the world?
International Coverage
To begin with, consider how international your user base is, as identity verification solutions differ in how many different nationalities you can reach. If you only need an identity verification solution for your home market and plan to stay there, you may be able to rely on a national ID verification solution. However, with international mobility of users there will always be smaller or larger corner cases in each geographical market that are not covered by national EIDs, such as ex-pats, exchange students and immigrants.
In case you need to solve ID verification for these as well, you need either complementary identity verification solutions or solutions with international coverage. The same holds if you are already international. As soon as you move beyond a number of markets, the challenge of integrating local ID verification solutions will be too large, and you need either ID solutions born global, such as ID wallets, or at least an orchestrator to help you with integration.
Ease of Integration
All software-based identity verification solutions come with needs of systems integration. At least two things drive the ease of integration, and the accompanying costs: To what extent software can rely on open authentication protocols, such as OpenID Connect, and the number of integrations associated with a solution.
From this perspective, the one that is easiest to integrate are ID wallets based on open protocols. The most cumbersome is to go market by market with national EIDs. Here you will probably have to integrate towards different types of protocols, as well as implement and maintain a large number of integrations in your architecture.
Verification and Authentication Speed
ID Verification Speed
If you value customer experience and want to minimize customer friction, you will be interested in the time it takes for customers, especially new customers, to perform an ID verification. Here our recommendation is to distinguish between the speed of identity verification, and the speed of authentication.
The speed of identity verification is similar in most software solutions, as they are required to go through the same process steps, and rely on the same identity document databases to produce a certain level of identity assurance. A manual verification process, of course, come with significantly lower speed of verification (minimum 10X), since document verification becomes so cumbersome.
Authentication Speed
As stated, the other speed criteria to take into consideration is the time it takes for customers to authenticate, once they have verified their customer identities. It may be sequential logins, purchases, signings or other transactions. If your service requires repeated customer interactions over time, this is something that will affect the customer experience over the long term.
Here, app-based software identify verification solutions like ID wallets and national EIDs will deliver much faster authentication solutions, since they create a digital identity that can be re-used for further authentication, whereas other solutions require to perform the same process for authentication as for verification, since the users' digital identities are not stored.
Identity Verification Costs
Software Cost
Identity verification software solutions of course differ in payment models and costs, and your business model may be more or less sensitive to the cost of identity verification.
What will typically drive the price level of identity verification solutions is to what extent they are orchestrating other ID verification solutions, and incorporate their costs, and whether their technical solution requires a re-verification of identity for each transaction, i.e. for verification as well as for following authentication, for example at login, purchase, signing or any other transaction that your customers may perform.
These repeated transaction costs will be forwarded to you as the end user, and result in a higher overall cost for your solution.
If you have a use case with a high volume of transactions, and lower revenue per customer or transaction, the cost is something to take into consideration. This points in the direction towards ID Wallets or national EIDs, and away from manual processing, ID Selfie and Orchestrators.
Labour Cost
All solutions based on identify verification software comes with lower labour costs, and will be more scalable. However, there is still an option to have employees perform manual identity verification, for example by controlling scanned identity documents via email or web meetings. You'd be amazed to see how many large ecommerce firms still use manual identity verification in their onboarding.
This of course comes with a considerable cost of labour that must be taken into consideration, as well as the hit to user experience. If you are sensitive to the labour cost, this points away from manual identity verification.
Re-Usability
The customer experience you deliver is driven by the usability of your own product or service. Today there is a lack of standards for online identify verification and digital identities. Most users meet a fragmented landscape of ID solutions, and experience that they need a number of different apps and solutions to access their services.
If you can offer users to use a digital identity that they can re-used in many situations and for other services as well, that convenience will improve the impression of your service as well. Today, EIDs offer re-usability within a geographical market, but if you want to offer customers on an international market re-usability, ID Wallets is the only solution.
Regulatory Compliance and User Integrity
The development of the Internet points to an increased protection of customers' private integrity. The concept of self-sovereign identity embraces the idea that individual customers should have control over the information they use to prove who they are to website, services, and applications across the web.
If you want to be future-safe, one criteria for choosing among solutions for identity verification should therefore be to which extent user integrity is protected. Another condition in play is your regulatory requirements, and whether you need to secure compliance to regulatory frameworks such as GDPR.
Identity Data Richness - Different Identity Documents
In common sense the concept of identity is often perceived as equivalent to the information that is on your physical passport or ID card. However, both customers and service providers can benefit from building a richer identity than that. Users may for convenience want to use additional or different ID documents, such as ID card and driver's licence. Service providers, fore example financial institutions, want to verify not only the identity as such, but also that it is spotless, for example for anti money laundering (AML) purposes.
Depending on your use case, the ability for an identity verification service to add identity data and thereby contribute with enhanced know-your-customer (KYC) functionality, might be worth taking into consideration. Here, ID Wallets have advantages, but also ID Selfie providers have sometimes integrated into KYC to provide the ability to embrace more data alongside with the identity verification process.
Identity Fraud Prevention
In times of increased threats from cyber crime, it is increasingly in the interest of users and service providers that identity verification services prevents identity fraud, and identity theft. Users are increasingly worried that someone steals their identity and uses it to falsely identify themselves against a service provider.
Identity verification solutions differ with respect to identity fraud prevention and how they prevent fraud. Issues to take into consideration might be to what extent it is possible with a manual solution to check the validity of ID documents in real-time and whether it is possible to "spoof" a self-service solution with a still image of a person.
Seamless Integration in Customer Process Flow
Finally, many SaaS and app-based service providers strive to deliver a zero-friction service to their customers and are afraid that the process of identity verification might challenge that. They are sensitive to integrations and solutions that divert customers from their thoroughly designed customer journeys. If you value seamless integration more than other criteria, such as user integrity, cost and compliance, this points to ID Selfie solutions as an option, where you can build a solution into your existing customer flow in an app or web page.
Download our Comparison Table for Identity Verification Solutions!
Interested in how different solutions compare to each other with respect to the above-mentioned criteria? Download our comparison table here!