March 5, 2021
A rise in mobile phone penetration and the rapid evolution of the digital ecosystem have increased the emphasis on privacy over the past few years. Privacy concerns have led to some key innovations in digital identity, which have enhanced data privacy and secured transactions.
Phones are a key player in the innovation cycle. Today, phone numbers have permeated most aspects of our lives, be it personal, social, or financial. The diversity and volume of digital data associated directly and indirectly with phone numbers encourage more and more companies to adopt them as superior identifiers to traditional identity verification sources.
Traditional identifier sources such as national identifier registries centrally store static personally identifiable information (PII) such as name, address, and identity numbers. This information is often stale and can easily be found or purchased on the black market. Although other sources such as credit bureaus store dynamic transactional consumer data, they exclude several population groups that do not have a credit history. With increasing sophistication in data breaches and identity takeover fraud, establishing the identity of someone who is transacting digitally is becoming a serious challenge. In short, relying exclusively on traditional data sources to identify and authenticate consumers can lead to failures.
Due to these drawbacks of traditional identifiers, the digital identity world has had to turn to other identity verification options. Successors to static identifiers must have the following features:
Enter the mobile phone and the phone number. Today, nearly every adult in the world has a phone number. According to the GSMA, there are more than 5 billion mobile subscribers worldwide. In the US alone, there are over 700 million registered phone numbers. These phone numbers and the real-time signals they provide are rapidly gaining momentum and adoption as a more secure and privacy-enhancing alternative to traditional identifiers. Juniper Research estimates an 800% growth in mobile identifier services by 2024.
Over the last decade, several countries have launched programs centered around phone numbers to identify consumers and deliver public and private services effectively and securely. In emerging markets, the ubiquity of mobile devices has made them the primary medium to increase inclusion. For example, in India, most of the 1.2 billion+ records in the centralized citizen identity database are linked to a mobile number. The association of phone numbers with identifier data lends the foundational infrastructure upon which many public and private services are built and securely rendered to consumers.
However, linking phone numbers to static national identifiers alone does not ensure foolproof consumer identification.
Phone numbers provide a rich source of information about a consumer’s identity. The tenure of a phone line, event history, frequency of usage, location, and usage behavior provide comprehensive insights into a consumer’s digital footprint. Since these signals are generated over a long period, they lend credibility to a consumer’s identity. Attributes associated with a phone number can then be paired with device information and data from other authoritative sources to enhance the efficacy and accuracy of identity verification and authentication.
Insights and intelligence from Phone-Centric Identity data help progressive organizations implement the ‘PRO’ model of identity authentication and verification based on the following three checks to align with NIST SP 800-63 identity guidelines:
Unlike legacy identity verification methods that use traditional data sources, Phone-Centric Identity provides real-time identity authentication based on dynamic and current data. Real-time validation of these signals helps eliminate sophisticated fraud such as synthetic identities. Mobile devices, by design, also provide passive authentication with encryption. Phone-Centric Identity helps organizations eliminate friction in their onboarding and servicing process flows, thereby improving customer experience.
In addition to enhancing customer experience, Phone-Centric Identity helps improve verification rates. Identity approvals can happen with a higher degree of confidence, and manual reviews can be significantly reduced. Thus, Phone-Centric Identity provides organizations with an opportunity to rationalize their fraud management operations, thereby reducing OPEX.
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