When making the transition to digital operations, all companies across different sectors inevitably face the dilemma of customer experience vs. security.
A smooth and clear identity verification process contributes to customer satisfaction; however, it is often less secure. In contrast, a flow based on thorough checks can be irritating and complicated for end users, which negatively impacts conversion rates.
Finding the right balance between UX and security is crucial as you begin enhancing the current procedure, whether for launching a new mobile application or updating a regular web service.
In this article, we’ll take a look at customer identity verification through the eyes of end users, and highlight the areas that need improvement for establishing a safe yet user-friendly flow.
Understanding customer identity verification
Customer identity verification is the process of confirming a user’s identity, specifically verifying whether a user is a genuine person with legitimate interests. This process involves collecting and validating identity information, such as name, date of birth, address, etc., typically from government-issued identity documents like passports, driver’s licenses, or residence permits.
In some sectors, such as Banking, customer verification is a mandatory practice, regulated by local authorities through official standards and guidelines. For example, banks and financial institutions in the US must implement a Customer Identification Program (CIP) that includes customer ID verification as a legal requirement.
Generally, the process boils down to identity and biometric verification by capturing and authenticating a user’s ID and selfie.
It’s crucial to keep this procedure seamless and frictionless for customers; however, they often face many obstacles during onboarding or authentication.
In their shoes: Pitfalls along the customer verification journey
By analyzing the responses from our clients and interviewing representatives from one the most mobile demographics, digital nomads, we determined common obstacles for online users during customer identity verification.
#1 Manual data entry
Filling out application forms manually is never the best part of the registration process for users. In E-Commerce and Digital Services, it may lead to decreasing conversion rates, since customers often want to buy this bestseller book or rent a car from the airport right now. Moreover, manual data entry is prone to mistakes and inaccuracies submitted by customers.
#2 Limited document types to present
Today, more online businesses are becoming global, primarily thanks to digital nomads, a customer group uniting traveling workers from all over the world. As a Regula survey demonstrates, 35% of representatives of this audience encounter problems while submitting their IDs during verification. The reason is that some apps may only accept specific types of identification documents, which can be problematic if the digital nomad's primary identification is not supported.
#3 Poor user experience and interface
Poorly designed user interfaces and complex navigation make using the app confusing and frustrating to customers. In particular, 28% of digital nomads pointed this out as a problem. Another 16% of respondents mentioned a lack of localization. Eventually, unclear guidelines and UI imperfections lead to higher abandonment rates.
#4 Technical issues
Remote customer verification seems to be a convenient way to do banking or shopping without visiting a physical office or store. However, many online users experience difficulties while trying to access goods and services from their mobile devices. Relying on public Wi-Fi or mobile networks leads to unreliable internet connectivity, causing delays or difficulties in using the app for 36% of Regula survey participants.
Additionally, many customers use budget devices that prevent them from getting a quality ID scan or selfie on the first take. This contributes to the retake rate, and negatively impacts conversions.
#5 Many interfaces in one application
Patchwork-like interfaces built on multi-vendor solutions can also confuse customers. At the start of their journey, they expect to use one application without switching between various apps.
Many people are willing to accept short transitions to third-party billing service pages. However, uploading identity document scans or selfies to a different app from the one where they pressed the 'Sign up' button can be perceived by customers as suspicious or even as a scam. Additionally, inconsistent branding throughout the entire app may negatively impact the marketing metrics.
#6 Security concerns
Establishing a safe and fraud-resistant environment is a step some companies totally overlook when developing their customer identity verification procedures.
Submitting personal data, including sensitive information and selfies, to the web always raises some doubts. Customers may be concerned about the security of their personal information while using identity verification apps, especially if the app's security measures are not well-documented. This is what 34% of people surveyed by Regula said.
#7 Lack of testing
Many companies lack a complete set of real identity documents to test-drive the verification process before deploying the solution on their app or website. This is because obtaining IDs, especially biometric documents with real RFID chips, is a challenging task.
They also often skip testing with focus groups, where potential issues could be identified. As a result, customers encounter imperfections in the procedure that negatively affect their experience.
The role of technology in balancing fraud prevention and customer experience
A precise understanding of user needs and every detail of the IDV process is crucial. Automating the steps, providing comprehensive coverage of documents and languages, and making continuous technological improvements all contribute to the perfect balance that satisfies both users and companies.
The following technologies can help you balance UX and security in your apps:
Guided document capture and image quality assessment: This technology ensures that a quality shot is captured on the first attempt.
Automatic document type detection: Once the document is correctly identified, the software can apply the proper authenticity checks to verify it.
Automatic data extraction and form fill-in: This feature immediately adds all the necessary data to your database, eliminating manual manipulation and reducing the risk of errors and misspellings.
Automatic data cross-validation: Analyzing the information printed in text fields and encoded in machine-readable zone and barcodes makes it possible to detect any inconsistencies.
Document liveness detection: Sophisticated algorithms backed by neural networks quickly verify document authenticity. This eliminates the need for users to visit a physical office or engage in a video call with a company representative, while ensuring that users don't deceive the system with fake IDs.
Facial liveness detection: During passive or active checks, the software verifies that the user is the real individual they claim to be by analyzing their selfie and matching it with their ID.
Automatic authenticity checks: A complete set of authenticity checks guarantees that a company offers secure services and maintains a robust fraud detection strategy.
Comprehensive document template database: A large library, including various types of IDs from different countries and territories, accommodates applications from new customer segments, such as digital nomads.
Customization and cross-platform support: It’s critical to maintain a unified brand look and feel across all devices. A sleek and responsive interface, localized in the user’s language, attracts more satisfied regular customers.
When these technologies are applied, here is what the customer verification process looks like from both perspectives—the user’s side, and the IDV software’s side:
| Stage of the customer verification process | What the customer identity verification software does | What the user does |
|---|---|---|
Document image capture | Obtains a document image and determines its quality (e.g., well-focused, not blurred, includes all data) | Scans an identity document with a mobile camera while performing some rotations for upcoming liveness checks |
Document assessment | Detects key elements of the document, such as the machine-readable zone (MRZ), barcode, and photo, and identifies the ID type (e.g., passport or driver’s license). Performs a document liveness check to detect AI-generated, on-screen, or printed photos of an ID | Waits for milliseconds |
Document data extraction | Recognizes and reads data from the visual inspection zone (VIZ), RFID chip, MRZ, etc. Fills out the form with required data extracted from an ID | |
Selfie image capture | Captures the user’s photo, evaluates face attributes, and assesses image quality. Performs a facial liveness check to ensure that a real user is there, not a spoof | Takes a selfie with a front mobile camera |
Face comparison | Matches the selfie with the photos in the identity document | Automatically transfers data to the bank, car sharing service, telecom operator, etc. |
Verification complete | ||
How to make customer identity verification smoother
A significant portion of companies may not require thorough inspections of their new customers. However, it shouldn’t be common practice to eliminate all barriers along your customers’ journey, risking their data and internal security.
Make sure you include the following components in your customer identity verification flow to improve it without sacrificing security:
No redundant personal data: Only ask for the data you truly need in order to verify your client’s identity. In many cases, a name, address, and identity document are sufficient to comply with regulations. By utilizing both document and biometric verification, you can confirm that your customer is the real person they claim to be, and that they possess a genuine physical ID as proof of identity. This is precisely the option that Pearson VUE, the global online testing giant, chose for remote verification of new students.
Advanced technologies under the hood: Choose IDV solutions enriched with the latest technologies that cover all necessary checks. This means they can recognize and verify not only the data in the MRZ and VIZ, but also barcodes and holograms across a wide range of identity documents.
Frictionless process: Consider using passive authentication, which is more hassle-free and convenient for users, instead of active authentication in stages where thorough examination isn’t required. For example, you can identify new customers by verifying their ID and selfie, and authenticate them using a face scan.
IDV based on risk appetite: Not every client should undergo a thorough examination. It’s reasonable to differentiate the verification procedure for various customer risk groups and use cases. For example, you can use video interviews with high-risk clients in live mode, and rely on automation while onboarding low-risk clients, like AirAsia.
Regular updates to the customer identity verification software and databases: It’s helpful to know what an IDV vendor’s roadmap looks like before deploying their solution. You need to ensure that the product is constantly improving. Additionally, you should make sure they keep their document template database up to date. New document versions are issued every year, and you need these specimens at hand immediately.
Testing on focus groups: Don’t skip the testing phase when building or updating your identity verification flow. In-house testing involving your employees isn’t sufficient to identify weak or problematic aspects of the customer journey. Develop full-scale tests for different customer demographics to detect areas that need improvement.
A deep knowledge of identity documents: Despite being issued in accordance with international standards, ID cards, passports, driver’s licenses, and other identity documents often have peculiarities to be aware of, from existing security features to exceptions to the general rules of the machine-readable zone.
Compliance with identity verification requirements: Keep your finger on the pulse of the regulations in your market or niche to collect and verify all the necessary data and security features to comply with local laws and avoid regulatory fines. For example, KYC policies differ between Crypto and Banking. Following the rules designed specifically for your industry helps you avoid redundancy in the process.
Find a partner in Regula
Regula Document Reader SDK, paired with Regula Face SDK, can cover all the steps during the IDV journey while delivering a smooth experience for your customers:
Identity document and biometric verification based on facial recognition
A large document template database of over 13,600 items from 249 countries and territories for effective customer ID verification
Low retake scores: up to 5% for document scans (with 7% as the average score in the industry) and about 0% for selfies
Fully customizable solutions with support for over 30 languages for localization
100% in-house development providing smooth operation
Book a call with one of our representatives to go over the details.
