Dynamic Data and Technology for Dynamic Times: An Imperative for Identity Verification

I’ve worked in the fraud industry for the past 20 years, gaining first-hand experience in companies using static data like credit information, government-issued IDs, and Social Security numbers as the cornerstone of identity verification. As I’ve witnessed, relying solely on static data and technology can leave significant gaps as fraud techniques evolve. 

Consider this: Javelin’s 2024 Identity Fraud Study reported overall identity fraud losses reached nearly $23 billion in 2023, a 13% increase from 2022. This alarming figure underscores the urgent need for advanced identity verification methods that surpass the provision of basic information for the initial verification process.

The Shift Toward Dynamic Data and Technology 

The potential of dynamic data and linkage signifies a paradigm shift in identity verification. Unlike traditional methods that rely on static data points and technology, this innovative approach creates a deeper, more comprehensive view of an individual’s identity. In 2022, the global identity verification market was valued at approximately $8.6 billion and is expected to grow to $18.6 billion by 2027, reflecting the increasing importance of dynamic data in combating fraud. Traditional identity verification methods rely heavily on static data and are becoming less effective as fraudsters continuously adapt to these defenses. A study by the Aite Group found that 47% of financial institutions experienced synthetic identity fraud losses, further underscoring the need for a shift toward more dynamic and adaptive verification methods.

By integrating dynamic and evolving data from various online and offline sources, we can provide a more accurate and complete picture of an identity, linking identity fragments and revealing patterns and anomalies in real time. This empowers brands to detect fraud faster and more thoroughly.

I am thrilled to be part of Fideo, a company dedicated to leveraging dynamic data and technology to combat threats. We are passionate about expanding our Identity Fraud Intelligence Network (iFIN) to deliver digital and physical insights to help companies fight fraud effectively. This network comprises partners, vendors and customers who contribute consumer and professional behavioral signals connected to identity fragments such as email, IP, names, addresses, phones, social media, and other digital identifiers.

Speed and Adaptability 

One of the most significant advantages of integrating real-time identity intelligence is the speed at which the technology can process and analyze data. Throughout my career, I’ve noticed that fraudsters move quickly, often exploiting static data before companies can update it. Our rapid processing capabilities mean that behaviors can be linked continuously, providing ongoing insights into potential risks. This dynamic approach allows for quick learning and adaptation, ensuring the ability to predict fraudulent activities faster than traditional data and technology solutions.

Enhanced Security Measures 

By utilizing online and offline data in real time, we can identify and link identity attributes, patterns, and anomalies to better understand identities and how their data is connected and used across many venues.

According to a study by Gartner, companies that leverage dynamic identity verification technologies see a 40% improvement in their fraud detection rates. This is largely due to the ability to create more comprehensive relationship graphs that reveal hidden connections between data points. 

This dynamic approach significantly enhances fraud detection capabilities. By transforming collected data into relationship graphs, platforms can offer a detailed view of actions, threats, and security risks. This comprehensive analysis helps identify elevated risks and flags the need for deeper verification, strengthening overall security.

Improving Customer Experience 

In addition to enhancing security, Fideo also improves the customer experience. Companies can streamline the verification process by using more relevant and up-to-date intelligence, reducing friction and making interactions smoother and more efficient. Data from McKinsey & Company suggests that companies implementing frictionless, dynamic verification processes see a 15% increase in customer satisfaction scores. This is crucial in today’s digital age, where customers expect quick and seamless interactions.

This seamless experience not only boosts customer satisfaction but also fosters trust and loyalty, thanks in large part to several key elements:

1. Risk-Based Authentication: By assessing the risk level of a user’s activity, companies can apply appropriate levels of verification, reducing friction for low-risk interactions while maintaining security for high-risk transactions.
2. Personalized Experiences: Leveraging dynamic data and real-time linkage allows companies to guide the applicant experience, offering a friction-right experience and enabling loyal customers to enjoy a red-carpet experience.
3. Proactive Fraud Prevention: Fideo continuously monitors user behavior and identifies patterns and anomalies, alerting companies to potential fraud attempts, and protecting consumers, brands, and communities, which is Fideo’s mission.

Consumers expect quick and hassle-free interactions, and dynamic data and linkage deliver on this expectation by minimizing the barriers traditionally associated with static identity verification solutions. If you share Fideo’s mission of leveraging intelligence to strengthen companies and communities, please get in touch with me at [email protected] to continue the conversation.