When is the best time to implement digital identity verification?

As the number of digital banking users increases, the need to offer them fluid and smooth experiences, as well as a greater range of online and mobile banking service provisions, also rises. Expectations are increasingly greater.

In this sense, the question is no longer whether to implement a digital identity verification solution, but rather at what point of the process is it most suitable to implement it in order to prevent it from having an adverse effect on the user experience.

Friction as a trust-building element

Online banking users are increasingly aware of the need to protect their digital identity, thus, they feel more comfortable with solutions to verify their identity. In that way, a certain amount of friction in the process is not perceived as a drawback, but rather it transmits security and trust, as the user is aware that their identity and data are being protected.

For this reason, other considerations regarding friction in the onboarding process or the process of accessing banking services have emerged:

Tolerance to friction: What are the probabilities of the user signing up (completing the verification step) instead of abandoning the process?

Verification guarantee: What is the fraud risk tolerance for the transaction in question?

Speed required: Will a response taking more than a few seconds cause a low conversion rate on your platform, or affect its risk assessment?

Thus, the added level of friction is just one further aspect in all the decisions regarding the implementation of digital identity verification.

Counteracting the customer experience with the corporate objectives

Another factor to take into account is when to introduce digital verification into the customer journey, since this moment can vary according to the user scenario and corporate objectives of each stage.

For instance, if the objective is to maximize new user conversions, many banks choose to use biometric verification only when the person fails to pass the initial passive low-friction signals (static, behavioral, device data, etc.), to enable the majority of valid applicants to complete the process in fewer steps and quicker.

If the objective is to minimize fraud, for example, in operations with higher risk or higher economic value, digital identity verification is introduced at the start of the process, in order to more effectively detect harmful actions and, furthermore, to build the user’s trust with “positive friction”.

Relevant metrics to assess digital identity verification solutions

Many financial institutions assess digital identity verification solutions based on two parameters: The approval rate and the forgery detection rate. However, although they are two highly important parameters, they do not fully represent the impact of digital identity verification on the customer journey, and they can give us a biased view of their effectiveness.

For a full assessment, it is important to consider other indicators, such as, for example:
Adherence rate: The percentage of customers who continue the process and take the snapshot of their identification document and a selfie.

Completion rate: The percentage of customers who complete the process and take the snapshot of their identification document and a selfie, to be processed by the system, regardless of whether they are fraudulent.

Approval rate: The percentage of customers whose identification document and biometrics are deemed to be genuine, compared to the number of requests.

Conversion: The percentage of customers whose identities are deemed to be genuine and who have completed the process or transaction.

In essence, we could say that it is no longer enough to implement an identity verification solution. The duration of the customer journey, and how we assess its impact and effectiveness are factors that must be taken into account. The free Strategic Guide to Implementing Identity Verification e-book analyzes these factors, and proposes a model to comprehensively assess digital identity verification.

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