3 Reasons Why Your Business Needs On-Premises IDV in 2021
In today’s digital era, identity verification has advanced beyond traditional methods of customer authentication. If your business does not already have a streamlined identity verification process, here are some statistics from 2020 that exhibit why you need one:
- The average cost of data breaches faced by U.S. companies amounted to $3.86 million
- Approximately 156 million individuals were affected by sensitive data leakage in the U.S. (i.e. around 47% of the total population)
- This high number of sensitive data exposure resulted because of human errors, such as weak internal cybersecurity measures
Keeping these numbers in mind, a global increase in account takeovers and identity theft does not come as a surprise. To counter such threats, companies today are increasingly reliant on third-party vendors for handling employee and customer authentication. While these vendors enable businesses to decrease their operational costs and increase productivity, it also results in a greater number of external users that can access internal networks, and sensitive corporate data and resources, and therein lies the problem:
In a world where identity verification has become critical for combating online threats, how can companies enhance the security of customer records without compromising on the security and efficiency of their business?
Possible Options for Identity Verification
Before the age of big data and the universal adoption of smartphones and IoT technology, asking questions with answers unique to individual customers made sense as a technique for verifying identity. In theory, every security question in a KBA (Knowledge-Based Authentication) model has only one correct response, and this response should not be easy for third-party vendors to guess.
However, with companies now collecting and saving large amounts of customer information, and individual users sharing most details of their lives on social media, data once considered private is now easily available to hackers.
To tackle this problem, companies began focusing on cloud computing as a way to stay secure, modern, and competitive. Using this approach for data storage, businesses can protect themselves against malware, stay compliant with regulations, and lower management costs without having to deal with the backend technicalities.
Unfortunately, technological advancement has not only offered numerous benefits for businesses but cybercriminals as well. As companies increasingly shift towards cloud computing, they make themselves vulnerable to new risks as well as the data saved on Cloud platforms can be illegally accessed by criminals through AI (Artificial Intelligence) and ML (Machine Learning) models.
This brings us back to the basic question — how can you ensure security if not through cloud service or traditional verification methods?
On-Premises IDV Service — The Easy Way Out
Financial institutions such as banks, insurance companies, or fintech firms are increasingly at risk of cyberattacks. This not only makes accurate customer verification a pressing priority for them but emphasizes the need for a secure solution.
An alternative method of customer authentication that businesses can opt for is the On-premises Identity Verification service. The adoption of an On-premises Service for identity verification allows a business to verify their customer base and store their data on their servers. After a one-time installation, the need for a separate vendor or service provider is eliminated, as no third party is allowed access to the customer data. With the help of this service, companies can ensure a secure customer onboarding process, making the collected data safe from criminal activities.
What Makes It Stand Out
On-premises Identity Verification Service poses several benefits for businesses. Some of them are listed below:
1. Limited Access
By consolidating customer information into one location, on-premises IDV service provides businesses with full control over customer data. As data access is limited to the company and its customers, it removes any third-party service provider interference. Without sharing the database with outside vendors and by regulating the amount of data available for customers, fraudulent activity can be prevented.
2. Enhanced Security
The threats associated with third-party access are substantially increasing, as even the businesses employed with robust security systems remain susceptible to data breaches caused by third parties. Once given access to sensitive data, the vendor is responsible for keeping the company’s intellectual property and customer data safe. In case sensitive information is exposed, the responsibility still lies with the business itself to resolve and report the issues caused by the data breach.
On the other hand, on-premises IDV service allows the company to have complete control over confidential customer data, as the data server is only accessible by the company. Additionally, in the event a fraudster impersonates someone else to access their information from the company’s server, the IDV software can swiftly identify the suspicious activity and deny them access to the server.
3. Compliance
Unlike a shared server, an in-house server provides the company exclusive access to customer data, which allows them to avoid any regulatory violations. On-premises IDV service adheres to guidelines and legislation set by global regulatory authorities for KYC and AML compliance. It also helps businesses to comply with PCI-DSS (Payment Card Industry Data Security Standard) regulatory requirements to prevent card-holder theft and prevent data breaches.
Key Takeaways
- Businesses need to employ efficient and robust anti-fraud systems to verify their customers
- Identity verification is necessary for regulatory compliance and keeping customer records safe
- Customer verification has advanced beyond traditional methods and cloud data storage
- On-premises service for identity verification allows a business to verify their customer base accurately and store their data on their own servers to ensure sole access and high-level security
