Bot? Fraudster? New Technology Finds Legit Users Without Compromising User Experience

The most sustainable and effective business successes frequently come from striking the right balances.

And one of the more challenging balances for businesses to strike is between a robust and secure authentication with a streamlined and intuitive end-user experience.

Security within banking and payments often comes at the cost of convenience — in large part because the internet and online commerce were not built with identity as a foundational element, leading to many challenges in establishing trust online, Prove Identity CEO Rodger Desai told PYMNTS.

“In the phone world, [the identity] problem has been solved … it’s easy, it’s secure, it’s private all at the same time, without trade-offs,” Desai said.

He explained that as businesses continue to navigate the complexities of digital security and identity, leveraging phones as a proxy for identity can allow for secure and convenient verification without requiring users to repeatedly prove who they are.

And as identity becomes central to commercial activities on the web, the demand for advanced verification solutions will continue to grow in-step the need to balance security and convenience without compromising user experience, Desai said.

Read more: Prove Debuts Self-Service ID Verification Platform

Fraud and User Experience

It has become clear that cyberthreats are continuing to evolve in their sophistication and frequency. As a result, companies are being forced to invest heavily in security measures to protect themselves and their customers.

A platform that provides protection across all pain points is crucial.  Embracing a “one-stop shop” strategy allows businesses to benefit from a centralized policy engine that adapts to new fraud attacks as they arise, Desai said.

“In the past, the goal was to keep the bad guys out and solve for specific pain points … but now, by starting with a ground truth of who this person is to begin with, you can solve even more complex use cases,” he explained.

Desai added that with the phone acting as an identity proxy, solutions like Prove’s own Prove Link SDK can offer a balance between security and ease of use.

Separately, other innovations such as artificial intelligence (AI) are rising to prominence within digital commerce. These advances play a dual role — both progress and threat — and can pose challenges for businesses looking to stand up fraud prevention programs.

One exciting possibility is the use of AI agents to assist consumers in financial tasks, such as consolidating debt or refinancing a mortgage.

“Many businesses will offer AI agents to consumers to make their lives easier and to save money … but with that comes the challenge of, ‘Can you trust this agent to go and do things on your behalf?’ and ‘Can the bank trust that the AI agent is representing you?’” Desai said. “Identity is going to be a crucial ingredient to enabling this.”

See also: Spike in Business Identity Theft Calls for Phone-Based Approach to Authentication

When it comes to best practices, the recent CrowdStrike and Microsoft outage, which was not a cyberattack but nonetheless a huge disruption, served as a reminder of the importance of having contingency plans in place.

Desai noted that many banks, despite believing they had redundancy throughout their tech stacks, discovered single points of failure. This has led to a heightened awareness of the need for robust backup systems and redundancy in all processes.

In the aftermath of the outage, Desai highlighted that there is a renewed focus on security and the importance of digital identity authentication. Banks and other financial institutions, often the prime targets for cyberattacks, are investing heavily in technologies that enhance both security and customer convenience.

“Banks are pretty sophisticated because they have to be,” he said.

Looking ahead, Desai believes that the ability to offer a seamless and secure digital experience will become a differentiator in the financial sector.

Prove’s own focus on innovation, he added, is evident in its prefill product, which allows users to apply for services using just their phone number.

Desai explained that this product not only simplifies the application process but also ensures security by verifying the phone’s ownership. Ultimately, the concept will be applied across more complex use cases, such as small business lending.

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