• White Paper
The Digital
Identity
Network
A Holistic Approach
to Managing Risk in a
Global Economy
The Struggle to
Build Trust Online
However, identity verification during onboarding is just
the start. As customers engage in high-risk or high-
value transactions, businesses may need additional
layers of verification and authentication.
Different use cases, along with each customer’s
unique set of identity attributes and risk profiles,
create complexities for global businesses. Adaptable
and robust methods for identity verification can
help businesses maintain online trust in a diverse
environment.
Where problems arise are businesses with inefficient
and risk-prone verification processes and the internet.
As transactions grow in volume and complexity,
customers expect seamless services. Meanwhile,
regulators are calling for greater insight into
transactions and will hold organizations responsible for
missing or incorrect identity information. Weak identity
systems are also prime targets for hackers.
How does the internet play a part in all this? It lacks a
critical identity layer that would solve these complex
problems. While there are layers of protocols and
methodologies for transporting data over networks,
there is no protocol for transporting assurance. As
a result, there is no standardized way to establish
that an individual is who they say they are for online
transactions.
Identity companies have created countless solutions
to establish trust, from basic data verification to
sophisticated biometric authentication. Individually,
these solutions fail to solve the internet’s fundamental
problems with identity. They lack the robustness
and flexibility to battle evolving fraud, comply with
multiplying regulations, meet increasing demands for
a smooth user experience and provide accessible
digital services.
Trust is needed for digital economies
to thrive. It provides the assurance
that global businesses need to offer
customers goods and services securely.
Verifying digital identity as part of the onboarding
process is the first step toward building that trust.
By affirming a customer is who they say they are,
companies can confidently allow customers to begin
transacting online.
Organizations may want to look for
ways to reimagine identity to keep pace
in the fast-changing digital economy.
Looking at problems and solutions in a
new, more holistic way can help create
that missing identity layer.
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Risky Business
Global Companies Battle Fraud, Compliance
and Digital Access Across Borders
22%
$12,000
Of Adults Will Fall
Victim to Account
Takeover Attacks
Average Loss Per Incident
Fraud
Cybercriminals are clever and ambitious, perpetrating
increasing amounts of fraud. In the U.S., it’s estimated
that 22% of adults will fall victim to account takeover
attacks, with an average loss of $12,000 per incident.
Globally, money laundering is estimated at 2% to 5% of
the global GDP.
Regulatory Compliance
Concerned lawmakers are cracking down on fraud,
money laundering and identity theft through increased
regulations, including Anti-Money Laundering (AML)
and Know Your Customer (KYC) requirements.
Making sense of the dozens, or even hundreds, of
regulations is a challenge, as is ensuring compliance.
The concept of regtech is still fairly new in the
grand scheme of technological developments. Still,
it’s expected to make up more than 50% of global
regulatory compliance budgets and triple to $204
billion in spending by 2026.
Digital Access
Many of the world’s population struggles with
accessibility to core digital services. Approximately 1.7
billion people worldwide don’t have access to financial
services, and those with access in emerging markets
usually pay high fees for a limited product selection.
Even consumers in established economies lack
access. It’s estimated that 14.1% of U.S. households
were “underbanked” in 2021 and underserved
households would spend the equivalent of 9.5% of their
income annually on interest and fees.
Without the ability to establish trust online, companies
face significant barriers to expanding their business in
the digital economy — especially on a global scale.
These challenges include preventing fraud, complying
with a patchwork of regulations and ensuring digital
access to customers worldwide.
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Peeling Back
the Layers
The Challenges of Traditional
Identity Solutions
However, today’s identity solutions are often
incomplete and lack the depth of capabilities required
to form this network of data sources and technologies.
Building a full-fledged identity solution can be hindered
by different identity layers, such as:
• Inefficient or unsuited service delivery
• Complex authorization rules and relationships
• Inaccurate or insufficient attribute collection
• Weak or inconvenient authentication
• Lack of coordination and consistency of standards
Often, organizations will address one layer but not
the others. These technologies focus on the method
for establishing identity rather than solving the
problem of how to create the assurance needed for
businesses and consumers to participate confidently
in the digital economy.
This limited view is further compounded by the mosaic
concept of identity. If any of these attributes change,
does the method selected for assessing risk consider
this change?
These problems are difficult to solve because the
attributes that make up identity are always shifting.
Consider identity as a mosaic of unique attributes that
change as individuals change, such as moving homes,
changing names, getting a new job or opening a new line
of credit. Therefore, establishing identity is a moving
target, and adjusting processes for authentication and
verification can help create assurance.
As much as identity evolves, one thing never changes:
prioritizing privacy and security while creating a
frictionless user experience. Consumers want to know
their information is safe and secure, but they also want
to be “remembered” so they don’t have to be validated
every time they interact with an online entity.
A recent survey found that 62% of consumers value
security more when opening accounts than three years
ago. Yet people won’t tolerate pointless friction, either.
To maintain this balance while addressing the problems
of fraud, compliance and digital access, it may be helpful
for businesses to look at a network approach to identity.
A digital identity network leverages hundreds of data
sources and technologies to satisfy these challenges
and create the seamless experience users have come
to expect. A digital identity network also helps fill the gap
created by the internet’s missing identity layer.
Identity Data
Verified Accounts
Devices
Biometrics
Behavior
ID Documents
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Taking a Risk-
Based Approach
A Look Inside the Digital
Identity Network
Orchestration enables businesses to shift the focus
from an identity method to mitigating the evolving risk
associated with doing business in the digital economy,
such as fraud, compliance, access, security and
customer satisfaction.
This risk-based approach provides a holistic view of
identity challenges. Viewing them as a whole provides
context, so companies can leverage the capabilities
of a digital identity network in a way that makes sense
for their business. These companies can focus on the
strategic rather than the tactical.
A digital identity network that’s agile, optimized and
diversified can help manage risk while accounting for
the evolving nature of identity.
Agile
How a digital identity network adapts to the business
context may be determined by many factors, including:
• Location of the business and customers
• Applicable regulations
• Consumer adoption of technology
• Company size and industry
• The purpose of verification or authentication, such
as customer onboarding or authorizing payments
• Identity attributes to be verified, authenticated
or screened, including personally identifiable
information, ID documents, behavior and
biometrics
Any change in these factors cause the business
context to shift, and the digital identity network adapts
accordingly. For example, a business could create
custom verification processes based on each type
of customer and transaction. For account creation,
businesses may only need a KYC check against a
few data attributes. For higher-risk transactions,
businesses may want a higher level of assurance
against fraud.
To establish that trust and safety, the business could
add layers of verification, such as ID document
verification. The more layers used to establish identity,
the greater the level of assurance and a reduced
likelihood of impersonation, account takeover or fraud.
A digital identity network that’s agile,
optimized and diversified can help
manage risk while accounting for the
evolving nature of identity.
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Optimized
Businesses often require more than one method for
establishing identity. A digital identity network needs
a centralized function that deploys the right tools and
data sources to produce the appropriate decision. An
optimized network will dynamically route to the highest-
performing data sources and identity services.
There are three primary requirements for optimization to
be effective:
1. Ability to integrate multiple tools that meet the range
of capabilities an organization requires
2. Ability to customize processes among the different
tools and capabilities
3. Functionality for a decision to be reached based on
the various service outputs applied
Lastly, it’s important that a digital identity network
continually evolves. Constantly monitor the network’s
success and performance, add new services or tools,
incorporate user feedback, and use technology to
keep current with the latest threats and regulations.
This continual evolution helps ensure the network is
optimized for each business based on their use cases,
risk exposure and current environment.
Diversified
A digital identity network is inclusive, providing access
to the tools, methods and data sources needed to
participate in the digital economy. For example, a
customer in North America who wants to open a
bank account could walk into a branch and have a
face-to-face, non-digital experience. Alternatively,
they could create an account online with their
laptop, and the bank could run a KYC check against
established identity attributes. This is easily done
because the customer likely has a credit file history
or an established relationship with a government
organization.
On the other hand, a customer in an underserved
market might have limited documentation and
government services. However, they will likely have
a mobile phone tied to their identity. To provide this
customer with access to financial services, a bank
would need multiple verification and authentication
layers to reach the proper levels of assurance.
The business could use the customer’s mobile
phone to provide:
• Device authentication through a mobile
network operator
• Biometric authentication, which compares a
selfie photo to the photo on an ID document
• ID document verification, which captures
images from a person’s ID document and
assesses its validity
With digital access to financial services, this customer
can also access a world of goods and services
available in the digital economy.
An optimized network will dynamically
route to the highest-performing data
sources and identity services.”
“
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Leveraging the
API Economy
The Low-Effort Way to Add a Digital
Identity Network
Application programming interfaces (APIs) allow
companies to access important business capabilities
with greater ease.
Rather than struggling with multiple integrations
or costly workarounds, businesses in the digital
economy can use an API to plug into the digital
identity network. This enables businesses to
implement identity verification in their account
creation and other processes.
As the digital identity network continually adapts and
improves, businesses don’t have to rebuild repeatedly
or significantly change the customer journey to
address evolving risks — the digital identity network
does the heavy lifting.
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Conclusion
Digital Identity Networks:
Building a Global Ecosystem of
Trust in a Digital Economy
Digital identity networks take the place of the
internet’s missing identity layer. These ecosystems
of tools, services and data sources help businesses
successfully navigate the changing dynamics of a
global economy. As the networks adapt to address
emerging fraud risks or new regulations, the business
adapts too. As the networks expand their identity
capabilities with new tools and data sources, the
business expands too.
With digital identity networks, it’s easier for global
companies to take a holistic view of their identity risks
and use multi-layered verification to validate a user,
whether that’s with a government ID or a registered
mobile phone in the individual’s name. In this way,
digital identity networks provide the assurance that
businesses require to safely expand into emerging
markets. These networks are also the great equalizer,
enabling consumers from all walks of life to enjoy the
benefits of a digital economy — which is perhaps the
greatest benefit of all.
The internet is incomplete. Without the critical identity
layer needed to build trust online, global businesses
struggle with risk on all fronts: fraud, regulatory
compliance, digital access and user demands for a
frictionless experience. Compounding these risks is the
ever-changing nature of identity.
Traditional identity solutions are also incomplete. For
the most part, they are single-point tools targeted at
one or two use cases, such as customer onboarding. As
a result, they fail to answer the call for a digital identity
solution that can:
• Support transactions that are increasing in volume
and complexity
• Provide seamless service delivery across all channels
• Meet regulatory requirements
• Withstand sophisticated digital attacks
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The world’s
identity
platform.
Trulioo is a registered trademark of Trulioo Information Services Inc. in the United States, the European Union,
Canada and other countries.
Contact us
Trulioo is the world’s identity platform, trusted
by leading companies for their verification
needs. The Trulioo integrated, automated
platform provides unparalleled global coverage
for business and person verification and a
comprehensive suite of in-house capabilities.
Combining its state-of-the-art technology with expert verification
knowledge across diverse markets, Trulioo enables the highest
verification assurance levels, optimizing onboarding costs and
fostering trust and security in the global digital economy.