According to a recent study, credit union fraud rates increased by more than 70% in 2022 alone. If you needed a single statistic to illustrate why it's so important to be proactive about mitigating risk and protecting your members, let it be that one.
While you're certainly not without your options in terms of preventing fraud during account openings, many approaches sound similar to the point of confusion. Case in point: identity verification vs. authentication. They sound similar--are't they the same basic thing? Can your credit union get by with one over the other? Read on to find out.
Hitting the Bullseye on Fraud: FLEX Unveils Dynamic Solutions for Your Security Challenges
Quick Differences
- Identity authentication is all about determining if someone has access to a particular service or area of a website, like an account.
- Identity verification makes sure that someone is who they claim to be.
What is Identity Authentication?
Identity authentication is a process that allows your credit union to determine if someone should have access to a specific action or service in the first place. A password, for example, is used to make sure only someone who should have access to an account does. Two-factor authentication (2FA) would also be an example of this. Members need a username, a password, and a 2FA code before they are given access to that which they want.
What is Identity Verification?
On the other hand, identity verification is an attempt to confirm that someone is who they say they are. Your credit union members may be asked to provide essential information like their social security number, birthday, address, and more when opening a new account or applying for a loan.
Behavioral signals are also a form of identity verification that are used on an ongoing basis. If you know the way one of your members traditionally uses a checking account, for example, you have a fairly stable definition of what "normal" activity looks like. You can then compare and flag anything that falls outside that definition based on things like suspicious purchases, transaction dates, and more--all of which would signal that someone might be using the account who shouldn't be.
Which is Most Important?
Both.
The level of security that your credit union is able to offer its members will always increase as more layers are added. Verifying someone's identity at the point that they open a new account, for example, is a great opportunity to prevent a fraudulent account from being opened. Then, continuing to use identity authentication on an ongoing basis would be an efficient way to keep that account protected, making sure that nobody with malicious intentions gains access to it.
Both would be an excellent way to balance the need to minimize risk with the demand to offer members an excellent experience they won't find elsewhere.
Stay Ahead of Fraud's Curve with FLEX: Discover Seamless Authentication and Verification
At FLEX, we understand that combating fraud can often seem like trying to hit a moving target--which is why we offer both authentication and verification integrations that you can leverage for a more holistic approach to security. For example, FLEX natively integrates with FIS ID--a tool that helps prevent fraud when logging into an account. It's also why we always prioritize partnering with some of the most reputable names in the business, with Alloy being a top example. If you'd like to discuss details, feel free to contact us at any time. Otherwise, click the button below to learn more about our integrations.
