Technology’s role in our everyday lives continues to increase exponentially. Although the shift to digital began before the pandemic, as we continue operating in a largely remote world, technology is increasingly used for daily tasks like shopping, banking and even healthcare. When it comes to confirming identity much is at stake for businesses and individuals alike, including potential time and material losses. The challenge companies are currently facing is how to confirm digital identities while maintaining a positive consumer experience.
Since the start of COVID-19, 60 percent of consumers have higher expectations for their digital experience despite the added strain on providers as overall online transaction activities have also increased by 20 percent, according to a recent Experian Global Insights Report.
In addition to improving the consumer experience, investing in AI will impact a company’s bottom line by providing better data hygiene, entity resolution, attribute development and optimization of internal decision systems. Our data found that 41 percent of businesses intend to use AI to acquire and onboard new customers. AI can also provide a safer, more convenient approach to fraud prevention as well.
Experian is seeing strong returns in financial services by leveraging AI to optimize credit underwriting, mitigate fraudulent behavior risks and enhance customer experiences in a fully digital environment.
One of the key areas where digital identity and AI plays a significant role is in fraud prevention. Identifying new fraud signals is where businesses see one of the highest rates of return. The dynamics of fraud are constantly changing and new data that provides insights into emerging signals frequently becomes available.
For example, powered by machine learning and AI, Experian’s Sure Profile is integrated into the credit profile and offers lenders a streamlined approach to define and detect synthetic identities early in the originations process. Sure Profile differentiates between real people and potentially risky applicants, so lenders can confidently increase application approvals with less risk.
Additionally, the non-linear optimization approaches that underpin many machine learning techniques match well to the signals that can be detected. Due to the “size of the prize” transactional nature, this can generate 10x to 20x multiples on return on investment.
Marketers also are investing in technology surrounding digital identity as today’s consumer has hundreds of digital touchpoints. The foundation of people-based marketing is the ability to accurately identify consumers across digital devices and channels. Brands who are able to provide a positive experience and put the customer first are the brands that will succeed.
Correct digital identification is also imperative to the healthcare industry where more than half of all deaths are attributed to medical errors stemming from identification mistakes. Despite some giant technological advances in recent years in patient management, achieving accurate and complete patient records remains a major challenge for the U.S. healthcare industry.
It’s estimated that around 70 percent of patient data held in electronic health records is incomplete or inaccurate, and up to half of all patient records may not be linked correctly. Unreliable patient data presents some huge problems for health systems, from flawed diagnoses and treatment errors to unreliable analytics and billing mistakes.
As patient portals become the new “digital front door” to access care services and manage things like scheduling and payments, and telehealth gains traction as a preferred care modality, fraudulent activity in healthcare will accelerate to an all-time high.
In every industry, reliance on technology and AI is accelerating at unprecedented rates. In the race to digital identity, early adopters are already seeing the greatest return on investment. Businesses that frequently optimize their existing data and analytics processes to include machine learning, AI and other technology will come out on top.
About the Author: Eric Haller is Executive Vice President & General Manager, Identity, Fraud & DataLabs at Experian. He has responsibility for Experian’s Identity & Fraud businesses globally as well as the company’s DataLabs in San Diego, London, São Paulo & Singapore.