Customer verification is a process that is used by businesses to ensure customers are who they say they are and that the information they provide is accurate. Due to increasing rates of identity theft, fraud, and data breaches, lawmakers have created and implemented several key regulations that are essential for online businesses to know and comply with.
These regulations, such as the General Data Protection Regulation (GDPR), Know Your Customer (KYC), Anti-Money Laundering (AML), Revised Payment Service Directive (PSD2), and Payment Card Industry (PCI-DSS) Compliance greatly affect your business’s compliance requirements within your customer identity verification program. Not only do these key regulations affect the way companies operate daily, but they also play a role in how companies select a compliant identity verification provider.
Cognito isn’t your average, run-of-the-mill identity verification provider. Instead, we provide advanced user experience-focused products, scalable solutions, and flexible APIs for easy integration. Cognito also only uses high-quality, regulated identity data for customer verification services, to provide accurate, high-speed results and ongoing monitoring for reliable, full compliance.
Why it’s important
Customer verification has several unique benefits for businesses in all industries. First, it allows businesses to fully comply with government laws and regulations, such as KYC guidelines and AML regulations. This is key to avoiding hefty fines and penalties from law enforcement for non-compliance.
Second, it helps prevent fraud and identity theft, in addition to the various costs and expenses caused by incorrect or incomplete customer-provided data. This service also helps protect users and customers from fraudulent activities of other users to keep the online customer base secure.
Our fast and easy process
To begin verifying customers, Cognito’s verification solution only requires the customer’s name and phone number. A phone number is an ideal identifier because it is associated with a physical object that a person has, instead of just information they know.
This type of verification process also provides fast and easy access to your services or product and limits unnecessary friction during the onboarding or checkout process. As a result, the need for clunky legacy solutions like Knowledge-Based Authentication (KBA) is eliminated.
Here’s how Cognito’s verification process works:
- You add Cognito’s API to your company’s sign-up flow. This typically only takes a day or two. Our robust API documentation gives you everything you need to get up and running quickly, but if you need us, we’re here to help.
- A customer signs up for your service. With the Cognito API, they’ll be required to provide their name and phone number. We also recommend that you send your customer a one-time passcode to reduce the likelihood of fraud by verifying that they are in possession of their phone when signing up.
- The Cognito API automatically consults powerful, regulated data sources to create an identity record. You can easily verify that your customers are using a real identity associated with a phone number by relying on Cognito to cross-reference trusted regulated data to verify the name, date of birth, address, phone number, and social security number of your customers for compliance purposes. You can also see up to the last 15 addresses associated with your customer, not just their current address, to easily tie a person to a location.
This automated process minimizes the need for time-consuming and expensive manual reviews while maximizing your match rate. With our flexible scoring system, companies can easily integrate Cognito’s solution for a variety of use cases to determine the relevance and quality of customer-submitted data in real-time.
Customer verification is essential for many transactional businesses that operate online. The benefits span several different industries, including:
- Online retail and e-commerce – Complying with customer verification regulations help protect online shoppers and reduces companies’ liability for fraudulent transactions. Some online merchants may also need to verify the age of their customers to protect minors from exposure to content, services, or products that are intended for adults. Maintaining compliance with Cognito’s solutions prevents reputational injury, financial losses due to fines, or even the loss of licensure and increases conversion rates with less customer friction than other verification solutions.
- Online dating – Cognito’s solution ensures that customers are protected from fraudulent activities of other users, reduces the creation of fake accounts, and improves company reputation.
- Social media platforms – Fake users or bots have contributed to the rise of misinformation online and social media platforms are increasingly using customer verification services, such as those provided by Cognito, as an additional security safeguard to prevent the ongoing creation of fake accounts.
- Finance and digital banks – Cognito’s solution allows financial institutions to collect critical information from customers and verify its accuracy and their authenticity. This helps reduce fraud, maintain ongoing compliance with strict industry regulations, and prevent criminal financial schemes like money laundering, terrorist financing, and fraudulent transactions.
Verify customer identity with a seamless API
Cognito’s advanced solutions can be quickly implemented in two days or less, compared to other services that require months or more for full implementation. In addition to fast implementation, our product seamlessly integrates with your existing onboarding flow, meaning your customers don’t suffer from clunky or slow requirements during the signup or checkout process.
Cognito’s integration is made even simpler with modern documentation, client SDK, and dedicated Slack channels for easy communication with our developers and IT support. Whether you’re integrating Cognito’s solutions with your website, app, or both, we can ensure that the process is quick and simple so that you can start reaping the benefits immediately.
Reduce fraud with Cognito today
Cognito’s customer verification product offers an airtight solution for complete regulatory compliance, streamlined processes within a variety of industries, and enhanced business performance through increased conversions, customer satisfaction, and reduced fraud.