Global data breaches have gone through the roof in the past few years. As the age of digitization continues to grow, so does the threat to growing businesses on the web. The rise in identity theft and stolen accounts has also left business owners in shambles which is why an identity verification solution has become the need of the hour.
This is extremely necessary for the regulated industries selling products and services to age-appropriate people. Since most business owners have adopted digital platforms to make offerings, finding and integrating bulletproof age verification systems are a great way to ensure the person is exactly who they are posing to be.
But why do the regulated industries, more than other industries, need an identity and age verification system in the first place? This and so much more we are discussing below.
Why Do Regulated Industries Need Age Verification Systems?
For the longest time, industries, small businesses, and sellers have used traditional age-verification solutions such as credit card verification or customer self-certification, which isn’t enough to keep underage kids from buying goods restricted for them.
These goods and services may include;
- Adult entertainment
- Vaping products
- Gambling websites
Integrating an age-verification system in all the industries that have been age-restricted by the authorities is not just a regulatory obligation but is also crucial to retain their customer’s trust.
These industries must employ the age verification system to avoid fraud and legal ramifications.
Moreover, the age verification system must ensure a smooth process to make the user experience effortless without adding further pressure on the web.
Also, an identity verification system will support a variety of uses for regulated retailers that are both online and offline. This includes;
- Remote age verification
- Enhanced in-store age verification
- Omnichannel identity verification
- Autocomplete forms
There is so much more that you should know about why regulated industries must employ identity verification systems. Various reasons influence this decision. We are talking about some of them below.
4 Reasons Why Regulated Industries Must Employ Identity & Age Verification Systems
As a business owner, your top priority is maintaining your business without a lawsuit that could compromise your reputation as an industrialist. This is where the need for an identity verification system comes in.
We are mentioning a few reasons below why regulated industries must take age-verification systems seriously and employ one to prevent any damage to their business.
1. Maintain Your Reputation
Do you know why Airbnb has risen to stardom and is currently one of the most popular and trusted travel booking applications? It’s because the brand has used the identity-verification solution to its advantage and has maintained regular reviews on the app to improve customer experience.
In the current age, when all businesses have gone digital, regulatory compliance assures customers that their information and data are safe. By integrating age-verification software on your selling platform, you ensure your customers’ safety is your top concern that will ultimately build trust.
2. Avoid Hefty Fines
In 2020, fines for non-compliance with AML(anti money laundering), KYC(know your customer), data privacy, and MiFID(Markets in Financial Instruments Directive) regulations were around $10.6 billion. Banks and loan companies had to pay massive fines due to regulatory breaches.
If you’re running a business yourself, then you would agree that no business can afford to pay a hefty fine of this size which is why you must comply with the regulations set by federal authorities. When you implement streamlined identity verification solutions, they align with KYC and AML regulations which will keep you from paying hefty fines every year.
And not just that, you may have to follow several other rules based on what you’re selling and your location.
3. Keep Chargebacks at Bay
Since more people use credit cards to pay online and physically at stores, this has certainly increased credit card theft which takes a huge number of identity theft cases.
Since businesses have made it easier for credit card owners to pay without presenting their cards, credit card theft has become even more common because the purchase falls into the “card not present” category. This means that anyone with the card number and passcode could make a purchase regardless of the card being presented at the time of purchase.
So, when the card’s original user finds out about this, they would cancel the transaction. If the bank can’t locate the original fraudster, they will be liable to pay, known as a chargeback.
This is why regulated industries, including banks and loan companies, must employ an identity verification system to minimize chargebacks and stop credit card theft.
4. Improve Customer Experience
When customers buy something from your website, they hope to have a seamless experience; otherwise, it will take less than a second to close the browser. They don’t like giving too much information every time they have to log in, which is why they’d rather save their information in the browser.
The same rule applies to an identity verification system. Integrating a technologically advanced verification system on your platform that looks for users’ information elsewhere instead of asking them ensures a smooth and effortless experience.
The customer doesn’t have to wait too long to verify their age and identity because the verification system has already done that on the back end. This will ensure they always return to your website whenever they need something you’re offering.
Regulated industries must consider identity and the age-verification systems as moral and federal obligations. There are hefty fines in place for those industry and business owners who don’t comply with the regulations set by federal authorities.
An age verification system is good for your business in many ways. It keeps fraudsters at bay and ensures you’re not selling services, products, or content to underage kids while offering a seamless user experience.
Not to mention, customers feel more confident about buying from regulated companies and complying with the rules and regulations. It ensures their safety while giving off the perspective that the brand cares about the well-being of the masses.
So, an identity and age verification system will benefit your business if you integrate advanced technology developed and approved by tech nerds and experts.