How to Build a Multi-Layered Verification and Authentication Framework for Digital Identity

In the ever-evolving world of cybersecurity, businesses can no longer rely on a single solution to keep digital identity fraud at bay. A multi-layered approach to verify and authenticate a consumer’s digital identity is essential to defend against today’s sophisticated fraud threats, and protect both the businesses and their consumers.

Fraudsters are constantly finding new vulnerabilities to exploit. Even widely accepted measures like multi-factor authentication (MFA) have weaknesses, especially when they use social engineering tactics or mobile device hijacking to gain access to accounts. Combined with emerging technologies and the easy access to account credentials on the dark web, fraudsters are constantly adapting their tactics at speed of light, and businesses that rely on a single factor authentication leave themselves open to these threats.

At the core of any effective fraud prevention framework is a blend of verification and authentication techniques, including bot detection, behavioral analytics, device and phone number intelligence, digital identity intelligence such as email and IP, document verification, predictive user patterns, etc. In this post, we’ll discuss the top techniques to help businesses reduce fraud, improve revenue, and protect brand reputation.

Zumigo’s multi-layered approach

A multi-layered approach integrates verification and authentication on different aspects of a consumer’s digital identity, including mobile, email, payment, and other digital and personal information. Zumigo’s approach leverages real-time, deterministic information sources to reduce false negatives and/or positives.

We start with a consumer’s mobile identity as the first layer, and then verify other aspects of the digital identity as required by the business. A consumer’s mobile number account is a paid service connected to a real person, often over several years, thus creating a data-rich identity. For example, we can use the mobile number’s activation and services to authenticate whether this number is valid; from account services we can use account tenure, whether it’s a pre-paid account, etc. and the information about the mobile device such as SIM card changes, etc. to assess the risk profile of the phone number.

Other layers of verification and authentication include:

• • Email identity: Consumer email addresses are a core risk identifier because it is still the most popular credential used for digital sign-up/sign-in engagement and transactions. The network effect of the insights associated with the email address – for example, shared transaction history – creates a robust view of the identity behind the email address.
  • Financial identity: We can validate the name and address associated with the payment instrument, as well as verify a consumer bank account and business bank account status and ownership before linking to their digital payment accounts or wallets.
  • Other digital and personal information: We also validate the IP address and location of the consumer browser; type of network accessed; device details, etc. Other personally identifiable information (PII) we can validate includes age, driver’s license, name and address, associated secondary mobile accounts, etc.
  • Ownership: When a consumer’s mobile identity is used as account credentials, an increasing threat is to hijack the mobile device via porting, SIM-swapping, or call forwarding to intercept account sensitive confirmations or alerts. We authenticate that the owner is in possession of the device before sending confirmation requests in the form of SMS links or one-time passcodes. This method can also be used to confirm a transaction.

Summary

Building a robust digital identity verification and authentication framework starts with understanding that no single solution can prevent all types of fraud. New threats continue to pop up, or old threats get recycled and refreshed with advanced technologies. To keep up with the arms race, Zumigo adopts a multi-layered approach to validate the different aspects of the consumer’s digital identity through our solutions, including Zumigo Assure Identity, Zumigo Assure Authentication, Zumigo Assure Risk Assessment and Zumigo DeRiskify. Businesses can reduce fraud loss, protect brand reputation, and stay one step ahead of fraudsters.

Madhu Vudali is Vice President of Product Management at Zumigo. Comment or question? Find Madhu on LinkedIn.