Top 5 Ways to Improve Your Customer Verification Process

Top 5 Verification Methods to Improve Customer Verification - Insights

Companies have to verify their customer’s identities for various reasons.  For example, in order to prevent fraud, e-commerce companies often want to verify their customers before processing orders, and in some cases this is required

Many businesses will soon have to “reasonably verify” California customers before complying with a request for a copy of their personal information held by the business, or to delete their information.  There are similar requirements for customers who are residents of the European Union.

The most obvious issue for insufficient customer identity verification is fraud. However, it is not the only issue.

Poor user experience and trouble with onboarding can frustrate both potential customers and staff. As more and more transactions are completed online, customer verification becomes more and more prevalent. To meet growing demands and legal requirements, many current customer verification processes will need to be improved.

With some very important exceptions noted at the end of this article, here are 5 ways you can immediately improve your customer verification process.

Eliminate the tedious

Customer verification is crucial where instances of money or sensitive information is involved. It stands to reason that companies would want their customer verification to be as accurate and effective as possible.

Unfortunately, this can often translate to an experience that is tedious and uncomfortable for users. Companies can’t afford to have poor user experience driving those users away.

The key is to find methods of authentication and verification that are effective, accurate, and easy to complete. The last thing you want to do is inconvenience users any more than necessary.

One example here is “Two-Factor” or “Multi-Factor” Authentication (2FA or MFA).  This verification method requires your customer to enter a code that is sent to their email, or to their mobile phone.

Because the verification method is very common, the process is very recognizable and easy for your customers to use and understand.

In fact, online retailers doing business with European Union (EU) residents must comply with the EU’s new Payment Services Directive 2 (PSD2) law. The new EU directive requires customer authentication – such as by email or text/SMS code sent to the customer’s cell phone – for most transactions over 30 Euros.

Using 2FA or MFA, you can easily verify your customer’s email address and phone number.  This can be important if you need to make sure your customer did not type in their information incorrectly.  You can also use 2FA/MFA to stop bots and other fraudsters in their tracks.

Speed it up

Customers don’t want to wait – the longer you make them do so, the less they will want to be your customer.

One example to consider here is “Single Sign On (SSO)” authentication.  This verification method allows your customers to confirm who they are by logging into their accounts with popular apps, like Microsoft, Google, and Facebook. Your customer’s user name and password are not shared or accessible by anyone.

Apps like Facebook, Twitter, Google, and Microsoft are very well known and widely used.  This makes the process feel more recognizable for your customers.  Like 2FA/MFA, you can use SSO to stop bots and other fraudsters in their tracks.  In addition, the SSO verification method is very fast and easy.

Don’t over-rely on humans

If the verification process isn’t automated, that means someone has to do the verification themselves.

If you receive an influx in customers, it can become difficult for your staff to keep up.  As the volume of new customers increases, it can become too much handle and create onboarding bottlenecks that only slow the process down further.  The further behind they get, the slower the onboarding process becomes. It’s a problem that can cascade very quickly.

Ostensibly, you could hire more employees to try to keep up with an already slow process. Conversely, seeking customer verification solutions that support automating the process is a far more viable solution.

A manual processing of customer verification often relies upon cumbersome and tedious methods to get ID information from the customer. The manual authentication of that information can often take too much time to complete.

Additionally, remember that human error is a part of all manual processes.  And when people are asked to do monotonous tasks like ID checking, mistakes become more common. This recipe for disaster is the main reason that more automated solutions are suggested. The over-reliance on manual processing only exacerbates existing issues.

Here, consider checking your customer’s information automatically using “Knowledge Based Authentication” (KBA).  This verification method allows you to verify your customer’s information against credit reporting agency or other repositories of consumer data.

For example, you can use this feature to ask your customers to answer questions about their address, contact information, age, or other information to verify who they are.

It is very important that the KBA provider has a very wide coverage area of unique records that it checks.

Because this method usually works in the background, you only need to get your customer’s explicit and informed consent to do the checking.  The rest is usually very fast and easy.

Choose an adaptive platform

The principle of escalation suggests that when you build stronger walls, potential invaders will eventually produce more effective means of knocking those walls down – so you have to build even stronger walls, and so on. As verification features get stronger, fraudsters get more and more clever at getting around them.

Customer verification systems are under constant threat of attack and subversion from fraudsters by their very nature. The best systems offer different methods of customer verification, all at speeds that manual processing simply cannot achieve.

For example, consider using systems that don’t just rely on one verification method that can be spoofed or thwarted.  Ideally, your chosen customer verification system would use verifications from various different providers, or allow you to implement multiple verification methods in different ways.

Make sure you’re not violating any laws

Many people are not aware that automated ID checking can violate privacy and other laws, if not done correctly.  Even just one lawsuit could wipe out all of your profits, and put your company in severe financial jeopardy.

Many jurisdictions require advance notification and consent in order to process an individual’s information, including for facial recognition and other biometrics, and mandate certain retention limits.

In some cases, you even need a written release from your customer to use facial recognition or other biometrics, and written disclosure of the specific purpose and duration of time for which the facial recognition is being collected, stored, and used.

In addition, many online businesses have no choice, and must use manual customer verification.  In some industries, checking of ID is a requirement.  The penalties for selling to underage customers can mean loss of business license, substantial fines, and even criminal prosecution and prison.

For example, in many states, sellers of age restricted products like marijuana and alcoholic beverages must check the buyer’s government-issued photo ID to ensure that the buyer is old enough. Often, the checking of ID must be done by a human who is responsible for the verification.

If these restrictions apply to your business, consider using a system that obtains verified photos or videos of our customers holding their IDs, along with close ups of the IDs themselves.

Before choosing a customer verification system, make sure its fits with the legal requirements for your customer base.  In any event, be very careful to make sure you are not violating any laws that apply to ID checking, privacy, or other aspects of customer verification.


Your goal should be to provide a smooth user experience, that still accurately verifies the identity of your customers, and complies with your legal obligations.

Fortunately, there are automated solutions that can address all of these issues. They provide improved user experience, cut down on the burden to your staff – all while eliminating human error, and keep up with the escalation of fraudsters. All you have to do is make use of them.