The pandemic brought disruption to our doorsteps, into our homes and onto our digital screens, creating an unprecedented moment that bad actors were all too willing to exploit. Fifty-eight million consumers had a new account opened without their authorization in the last 12 months. This staggering number is a 21% increase compared to 2020 and is only expected to increase in the months and years ahead. As a recent Deloitte report on the increased fraud risk accompanying the pandemic noted, “It is not hard to see why the crisis might provide fertile ground for fraud. The combination of financial and health threats makes people more vulnerable and creates opportunities for fraudsters.”

Consequently, nearly 90% of businesses consider identity verification a strategic differentiator, allowing them to separate legitimate customers from criminals. Meanwhile, streamlining customer onboarding without compromising ease of use has proven challenging as people are unwilling to trade additional friction for a more secure experience. However, the following three best practices are critical for businesses looking to prioritize identity authentication without alienating new and existing customers in 2022 and beyond.

1. Remove Front-End Friction

Consumers are increasingly concerned about privacy on the internet, 70% suspect that companies gather data without their permission and 59% don’t think companies do enough to safeguard the personally identifiable information (PII) they possess. Consumers want to provide as little PII as possible.

At the same time, digital consumers are wary of complicated and cumbersome verification steps, and many will abandon account creation if the onboarding process presents excessive friction. This can be problematic when companies conflate data collection and identity verification, making it imperative to implement a verification solution that allows them to customize the process and safely run initial risk assessments based on the types of information consumers are more likely to share comfortably, such as an IP address, email address or phone number.

By analyzing a combination of attributes using low-level personal information before a full-blown identity check, businesses can quickly and efficiently differentiate between legitimate customers and potential fraud. When enacted appropriately, this approach can lower fraud risk without sacrificing customer experience.

2. Customize Identity Verification Workflows

As fraud continues to increase alongside growing consumer expectations for a quick, easy and secure experience, the ability to customize identity verification workflows becomes critically important. Most identity verification solutions on the market today fail to provide data intelligence and visibility into decisioning intelligence. Instead, they apply common engine logic across multiple customers and industries.

Successfully onboarding new customers and building long-term loyalty requires transparency through closed-loop feedback on decision-making data that helps businesses understand how identity verification attributes are performing. Armed with this information, they can make adjustments to attributes that pinpoint fraud on an extremely granular scale while streamlining the verification process for real customers.

3. Respond to the Latest Trends in Fraud

Businesses are grappling with rapidly evolving fraud risks. For example, phishing scams, one of the most common forms of fraud, have soared since the pandemic’s onset. New IDology consumer research shows that 96 million Americans have become victims of phishing attacks since the beginning of the pandemic and 59% have received six or more phishing emails since March 2020.

Meanwhile, growing consumer reliance on mobile devices has opened the door for threat actors to deploy spoofing, porting, device cloning and other methods to execute fraud attempts. Sixty-five percent of consumers surveyed by IDology used their mobile phones to sign up for new services in the last 12 months, so it’s not surprising that mobile fraud attacks and device compromise have increased 71% compared to 2020.

In this challenging threat landscape, businesses can’t afford to be stagnant or apathetic with identity verification. At the same time, shifting regulatory standards will require businesses to be even more transparent in their identity verification efforts and justify data collection efforts to regulators.

These best practices and identity verification solutions can be a strategic differentiator in a digital-first future, separating businesses ready to thrive in a digital-first landscape from those still waiting to adapt. However, identity verification is about more than just competitive advantage.

As threat actors try to capitalize on these uncertain times, businesses have a responsibility to fight fraud. It’s one of the best ways to reduce risk, grow revenue and keep customer data, which are prerequisites for thriving in 2022 and beyond.