7 Strategies for Streamlining Customer Verification Processes

Stay Connected May 14, 2024
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7 Strategies for Streamlining Customer Verification Processes

Way back in the mists of time (actually just a few decades ago), dealing with customers was so straightforward. They’d come into your shop, look for what they needed, hand over the cash, and that was that. Commerce done. Nowadays, of course, the process has become a good deal more sophisticated.

Perhaps chief among these developments is the ability for commerce to take place over distance. This is one of the factors that has led to an explosion of possibilities, but also a growth in risk factors. How can a business be sure that a customer is who they say they are? Do they have a legitimate right to access what they’re asking to? Welcome to the world of customer verification.

We’ll look at what you can do to implement effective and streamlined customer verification into your business processes. But first, let’s look at what it is and why you need it.

What is customer verification?

Customer verification is all about making sure you’re dealing with the right person. Yes, most customers are who they claim they are. But there’s a chance they’re not. In fact, identity theft is huge right now, as this chart makes clear.

Image sourced from Statista

Consequently, it’s sensible to look into methods that ensure that the person you’re communicating with is the right person. Customer verification processes are what companies put in place to achieve this.

What does this look like in practice? Let’s say you have a business proposal that you share as an online flipbook. If you want to limit access, you would need to implement a verification process to ensure only certain people can view the document. 

Why is customer verification important?

So, what’s the big deal with customer verification? There are a number of reasons why it’s something you should incorporate.

  • It confirms customer identities, keeping records safe from illegitimate access.
  • It confirms the customer’s age, ensuring age-restricted products are safely sold.
  • It satisfies regulatory requirements, such as GDPR and HIPAA.
  • It protects against the impact of fraudulent activities on a company’s reputation.
  • It improves customer experience as they feel they are interacting with an organization that prioritizes customer security in the fight against financial crime.

If you can implement processes that deliver all these benefits, you’ll be on the right track. However, it’s tempting to think that effective customer verification takes a long time to do properly, which can impact on customer experience. (And any customer orientation strategy will tell you that customer experience is paramount.)

However, customer experience doesn’t have to suffer. We’re going to cover several ways you can identify legitimate customers, that won’t take up too much of your customer’s day (or patience).

Streamlined customer verification strategies

Each of these methods of customer verification can be highly effective. You can implement most with minimal customer disruption, as we’ll describe as we go.

  1. Knowledge-Based Authentication (KBA)

This is a nice no-complication way to establish an identity. The customer gets asked a question that only they should know the answer to. If the answer’s correct, they’ve passed the requirement.

Usually, the information is provided ahead of time by the customer, when they set up their account. Usually, there’s a choice of questions, such as ‘What was your mother’s maiden name?’ or ‘What was your first pet called?’, and the customer enters the correct information that they will subsequently get tested on. This is static KBA.

Dynamic KBA, on the other hand, tests the customer on personal information gleaned from social security and other records databases. For instance, it could be a childhood or college address.

What’s most streamlined? In general, static. This is because dynamic KBA depends on a customer having a watertight memory, not just for date-dependent facts, but exact spellings too. A failure to answer correctly will prevent customer entry and possibly freeze the account.

  1. Multi-Factor Authentication (MFA)
Free to use image sourced from Unsplash

Suppose an identity thief has, through some foul means, managed to pass the KBA requirement. What’s needed is a way to foil them by alerting the right person that somebody’s targeting their account. The best way to ensure you’re getting the message through to the correct person is by contacting their mobile device.

That’s what Multi-Factor, or Two-Factor Authentication consists of. A request goes to the mobile device registered in the customer’s records. The customer then confirms or denies that they are the person who is trying to access the account.

This is a very effective and streamlined process, which combines well with KBA to give customer-friendly security. Using this kind of robust combination will encourage customer trust because you clearly take security seriously.

  1. One-Time Password (OTP)

This is another speedy approach to customer verification. When there’s an attempt made to access a customer account, the business sends a one-time password to the mobile device or email address associated with that customer. The recipient then needs to enter the password within a certain time limit.

Because it’s a short password or code, it doesn’t take much time to respond and gain access, so this is a streamlined customer verification process. Handily, OTP, as well as MPA and KBA, can be performed with automation, so your AI customer care suite can handle it.

  1. Biometric verification

This is a form of customer verification that depends on the customer displaying certain physical characteristics, such as voice tone. This is becoming more common as technology allows businesses to utilize more automated routines. 

But there’s a caveat: technology can also circumvent these procedures. To go back to the voice, a unique speech pattern can be identified by voice recognition software. However, Artificial intelligence voice fakes are becoming more ubiquitous and more effective, which might lead to problems going forward.

Free to use image sourced from Unsplash

Generally, biometric verification can be very streamlined, such as when a customer has simply to apply a thumbprint. Hopefully, this will remain so, in an era of ever-greater threat from tech subterfuge.

  1. Address verification

This is simply a check that the address details given match up with the address for that person contained on poll books and credit reference records. Most major payment cards support address verification, so it’s an excellent method of ensuring that you are dealing with the registered cardholder.

  1. Age verification

Many products that can only be legally sold to those of a certain age, and many services – like social networking sites – have minimum age requirements. However, to manually ask for age verification can be clunky and time-consuming (look at the section on document verification, below).

Happily, there’s a solution. Automated age verification gives businesses the information they need without being too much of a burden for the customer. What can this look like? There might be a requirement for the customer to enter their date of birth at some point in the interaction. There might be a facial recognition algorithm that can determine age. 

  1. Behavioral verification

In the Second World War, comms analysts who were listening into radio morse signaling found that it was possible to identify differences in the way the signalers tapped out their letters. This meant that it was possible to discern the work of individuals, given away by their manner of tapping, called their ‘fist’.

Free to use image sourced from Unsplash

This is something that has echoes today. When we use a keyboard or a mouse, we all have signature ways of interacting with them, the minute variations of which can be assessed and a reliable means of identifying the individual can result.

This is a very streamlined customer verification AI tool because it takes place without the customer having to do anything special. It might even take place without the customer being aware of it at all. Consequently, you end up with a seamless and smooth verification process.

In addition to the strategies outlined above, another effective approach is to consider hiring offshore Java developers to streamline the development and implementation of automated verification processes. Offshore developers can accelerate the deployment of robust verification systems while maintaining cost-effectiveness and operational efficiency.

… And two not-so-streamlined verification processes

Not all types of customer verification processes are as smooth as they might be. However, it’s worth looking at them for when necessity dictates their usage. As long as they’re not used all the time, it won’t be calamitous. Here are two of them.

  1. Physical verification

This form of verification requires the customer to present themselves at the sales premises in person. Is this a streamlined form of customer verification? Well, no.

So, you shouldn’t employ this one unless absolutely unavoidable. You should definitely try to avoid it if you manage multiple stores over a large geographical area. Asking a customer in Hawaii to come over to Portland, Maine, to confirm their identity is not likely to be met with much enthusiasm from the individual concerned! 

  1. Document verification
Free to use image sourced from Pexels

This is a process that requires the customer to produce a physical document that confirms identity or an aspect of such. The document can be photographed and sent over.

It’s not a fabulously streamlined option, as it requires firstly that the specific document is available for capture. It then can be a very precise and exacting process to photograph the document within a set frame and in adequate lighting.

Of similar inconvenience is photographic verification, whereby the customer needs to take a shot of themselves there and then and send it over. Both of these aren’t great examples of customer focus, as they make the process difficult and create unnecessary stress.

Strategies for streamlining

So much about customer experience is about streamlining. The name of the game is to remove obstacles and let things flow. It’s just the same with customer verification processes. If you can achieve an easy path while at the same time optimizing security, then you’ll have the result your customers will love. By using one (or, preferably) a combination of the routes above, you’ll have it cracked.