Why does user verification matter?

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You don’t need to be a marketing expert to know that user experience matters these days. You probably already have some metrics to measure this in your company, from NPS to conversion rates at each stage of your funnel. And you are right! Bad UX can cause a loss in customers: studies show that 60% of customers who’ve had poor customer experience are unlikely to return

But if you’re focusing only on UX, you’re missing an essential part of the equation: security! Financial institutions, for example, are under more pressure than ever to prevent fraud alongside the regulatory framework that’s now in place. Nowadays regulations are becoming more strict; especially for new segments of the economy such as fintech or marketplace platforms, among others. Regulators can forbid you from operating if you don’t prove that you comply with local KYC / AML regulations. So if you can show that everything in the area of regulation is in order, you’ve got one less problem. 

But besides compliance, verifying users can also be a powerful tool, that could allow you to mechanically:

  • Reduce fraud on your platform
  • Earn respect from your users by maintaining high-security standards
  • Improving the quality of your leads & new users

Reduce fraud on your services 

While this is a new era in fraud, it is also a new era in customer experience. Competitive pressure to lower friction has put companies in a tricky spot; they must make account opening and transactions easier while still deterring fraud.

Stronger security measures are probably the easiest way to reduce those skyrocketing fraud rates everyone in your industry is complaining about. Now, the biggest question for most people is probably “how can I do it?”. Well, the easiest way to get there is probably identity verification, ie. confirming that your users’ digital identity matches their physical identity. 

For years, identity verification was the prerogative of banks and financial services – the main reason being that those types of services were (very) costly. Now, what most people don’t know is that thanks to automation & recent developments in AI, this type of technology is now accessible to other types of industries – marketplaces, e-commerce, … – where it can have a huge impact on business. Let’s take our client Stay Alfred, a US-based rental platform. Before implementing Mati, they were experiencing high fraud rates, with numerous fraud attempts occurring after a specific pattern (more on that here). The solution they found? Adding to their account creation process a single step of ID verification with Mati. And the results have been immediate: 60% chargebacks and fraud attempts in 4 weeks! 

Earn respect from users by maintaining high-security standards

Fraud reduction isn’t the only benefit of adding user verification. If you’re running a fintech or a gig platform, you’re probably already aware of this: in your business, trust is everything. Either because people are entrusting you with their money, or with their lives.

Trust has become fundamental for brands as it drives consumers to brand loyalty. Loss of trust can have a significant impact on businesses. In newly-released research, Accenture Strategy determined that, of 7,000 companies analyzed, 54% had experienced a drop in revenue at some point in the previous two-and-a-half years.  

Using ID verification to demonstrate the robustness of your onboarding and security processes can help you build and maintain trust within your community of users by creating a safer environment for your business. Last but not least, people tend to be more and more attentive to the way companies manage their data. This new focus on privacy can become your way of differentiating yourself from things like this happening to your company. Maintaining consumer trust through safe workflows is crucial and companies need to begin their digital trust journey to achieve this. Consumer trust is a key pillar to any business trying to differentiate itself from other online companies. Unfortunately, many customers feel that companies don’t handle their personal information responsibly.

In some industries, this is even more crucial than ever when it comes to choosing among a huge mix of hundreds of brands. Take crypto for example… and yes, we have all read or heard about how crypto is just a scam, but in reality, it isn’t like that. Take our client Beaxy for example where one of their core values is having a strong, but user-friendly KYC/AML. You can learn more about their story here.

Customers want their data secured, while at the same time companies want to keep fraudsters out. Both parties win in this situation, but most importantly, the trust and loyalty for your platform can keep on growing.

It also empowers businesses to scale by easily onboarding new customers without compromising security. If you’re running a FinTech company, either in lendings, payments or even neobanks, having a balance between security and customer experience will surely determine the success in the future for your business. Want to start from the right foot? Book a free demo with us so you can be on top of the security verification process, without hurting your conversion rates! 

If you like what we’re talking about or want to learn more, make sure to leave a comment, share and subscribe to our blog. We’re open to topics you want to learn about and discuss with us!

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