Unlocking the impact of mobile data for digital identity and fraud prevention

Guest Blog by Gus Tomlinson, Chief Product Officer, at GBG

Digital identity has been the subject of much debate in recent months in the UK. Tony Blair and Lord Hague recently made headlines earlier this year with a co-authored a plan urging government to roll out a state-backed digital ID as part of technology transformation strategy, dividing industry opinion on the longevity of a government owned programme. As well as this, the UK government reintroduced the Data Protection and Digital Information Bill into parliament, which includes the introduction of a new framework for the use of trusted and secure digital verification services, claiming it will save the UK economy more than £4billion over the next ten years.  

While the exact strategy and execution is still to be debated, what is clear is that the UK government believes digital identity will be a cornerstone in fuelling the future economy. They aren’t alone - governments around the world, like Estonia, Malaysia, as well as the private sector believe that digital identities will play a huge part in the years to come.

However, governments and private businesses alike are facing dual problems; they struggle to identify large chunks of the population using current methods and they’re also facing an increase in fraudulent activity. In fact, our own research revealed that nearly one in ten (9%) consumers had been hit by fraud in the previous 12 months and over nine in ten (92%) believe it’s inevitable they’ll be victims of fraud at some point in the future.

Why we need alternative data sources in digital identity verification

Relying on traditional ways of identifying somebody – through identity documents like a driving licence or passport, or their credit file – is no longer fit for purpose when done in isolation. The reason for this is two-fold.

Firstly, criminals are getting increasingly sophisticated with their identity fraud schemes with industry reports showing a year-on-year increase in fraud attempts and reported associated losses. As a result, extra steps must be taken to ensure that somebody is who they say they are. In short, more verification checks are needed to spot the good guys from the criminal actors.

Secondly, millions of people globally do not hold traditional identity documents. In the UK alone, it is estimated that 11 million people do not have a passport or a driving licence, while around 1.2 million UK adults have no current or e-money account of any sort. Those without these types of identifying factors are often the most excluded and vulnerable in society. And, if we only relied on traditional identification methods, these people could be further excluded and unable to access digital goods and services.

Therefore, the public and private sectors should consider how they can leverage alternative sources of data to layer on top of traditional documents.

Mobile data – the next step for digital identity

One of the key sources of alternative data that should be leveraged when it comes to identity is mobile data.

More people than ever are using mobile phones, driven by the convenience they offer. In fact, there are around 6.64 billion unique mobile internet users worldwide, representing nearly 84% of the global population. This has had a huge impact on how businesses operate too. Around two thirds (67%) of businesses conduct business in the mobile environment, according to our own research. While consumers are increasingly accessing the online world via their mobile device - more than three quarters (76%) of consumers who have signed up for a new online account in the past 12 months did so via an app or browser on their device.

Now it’s time for the public and private sectors to realise the importance of the mobile when it comes to digital identity – both for improving access for goods and services, and for preventing fraud.

The mobile phone, after all, has become a natural extension of our identities – a mobile number is personal to an individual for example – and, as a result, mobile data can form a vital layer in better understanding an individual. For example, knowing that a person is the correct owner of a number is a robust way of validating and authenticating an identity.

Used in combination with other alternative data sources, such as biometric authentication – the use of our unique physical and behavioural characteristics to prove we are who we claim to be – mobile data can be layered with traditional identity verification information to make it much easier and safer to verify that an individual is who they are and not fraudsters in disguise. And, as technology continues to improve the reach and adoption of mobile, the insights generated increase over time too.

Opening the digital world up for millions

If digital identity is to form the bedrock of future economies, we must ensure that consumers are protected from fraud, and nobody is excluded from accessing digital goods and services. The data created by our use of mobile phones, therefore, will act as an additional layer of alternative data to increase confidence in identity verification and open the digital world to millions of people globally.

The techUK Podcast - Biometrics in Digital ID

Hear from industry leaders including Gus discussing biometrics in digital identity, exploring opportunities, challenges, regulations, and the future of this dynamic sector. We discuss enhancing security, safety, and user experience through revolutionary biometric solutions in this episode of the techUK podcast.

Gus Tomlinson helps companies onboard customers safely, fight fraud and stay compliant. As Chief Product Officer for GBG, Gus drives the product and data portfolio of identity and fraud solutions, ensuring products are aligned to customer demand.

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