Identity Verification in the Sharing Economy Done Right – Don’t Treat Honest People Like Criminals
The sharing economy may be a relatively new economic concept but one that is definitely growing rapidly. According to Forbes, it is projected to grow to $335 billion in 2025. Some sources project an even greater growth than that.
Renting or sharing goods has been a well-known concept for years but the evolution in technology and the growth of the digital world have transformed this act of sharing into a new and lucrative economic system. The use of mobile applications has boosted the accessibility and convenience of sharing economy platforms. But as these platforms are usually facilitating a real-life interaction the need to verify the identities of all participants has become crucial.
The sharing economy is built on the foundation of e-commerce but although e-commerce has grown exponentially in recent years, the lack of proper verification procedures has left businesses in this sector open to fraudulent activities. To top it all off, the rampant theft and sale of identity documents in recent years has led to an identity fraud crisis. There is an endless number of horror stories out there about people who’ve used stolen identities to sign up for short rental sites and other sharing-platforms to commit theft, vandalism, and fraud.
Trust is vital in sharing economy and stories and reports that implicate a sharing platform’s brand, impact the trust consumers have in it and destroy the brand’s reputation.
Arguably, the immediate response to tackle these issues and protect one’s brand would be to operate on a very strict security model. While it is great for protecting businesses against a data breach or fraudulent behaviour the heavy-handed implementation of such procedures often comes at the cost of making legitimate platform customers feel like criminals.
Lesson learned from KYC regulated industries – no more interrogation!
Sharing economy platforms must be able to authenticate participants at a later date if login credentials are lost or suspicious activity is detected. Yet, a winning relationship can’t start with an interrogation. The usual method for re-establishing trust if login credentials are lost is asking a string of sometimes highly intrusive security questions only the individual registering should know. Capturing this information during onboarding before providing customers with access to services, can feel like an unnecessary interrogation and drive prospects away. There is also a high likelihood that the customer’s knowledge-based authentication questions have already been compromised on another site and can, therefore, be known to an identity thief. This fact itself negates the very security basis for the interrogation method and it just leaves legitimate customers frustrated.
For the sharing economy there is also another side to the story – to remain competitive in this rapidly growing industry companies must recruit hosts, drivers and a variety of other contractors quickly and usually online without any in-person interaction. Managing such rapid growth requires the need to balance friction during the onboarding process with thorough verification checks to reduce risk and liability. Long delays in validating applicants lead to similar results as treating customers like criminals – your best applicants end up in the arms of your competition.
Protect your sharing platform by building trust
The key to successfully adding customer and provider identification to an onboarding process is both speed and good interface design. Modern technology, like the Authenteq solution, has addressed this by automating the onboarding process. The result is a fast, yet accurate, identity verification layer that is quick and feels frictionless. This adds security, trust, and reduces losses when compared to alternative high friction ID verification solutions.
Using a natural person — the individuals themselves — as a key element in the verification process is faster, more secure and produces less friction than knowledge-based interrogation methods. Authenteq uses the customers themselves during verification and authentication and when properly implemented this method improves the customer experience (CX) and vastly improves security over traditional authentication methods. With our solution, the initial identity verification takes less than 60 seconds and authentication after the initial verification takes less than 3 seconds – the fastest authentication and verification speeds on the market today. This reduces dropout during identity verification and later authentication, and builds trust towards your brand.
Identity Verification done right in the sharing economy simply means using a real-time, automated, verification solution to verify the identity of customers and providers alike.
Gartner predicts that businesses with great customer experience during identity corroboration will earn 20% more revenue than comparable businesses with poor customer experience.
The main benefit of the Authenteq solution is that with our fast and frictionless process you will not treat your customers and your providers like criminals and your competition will no longer enjoy the “free rides” that bounce from your site to theirs.