New research findings have shed light on the increasing expenses related to identity fraud and how it impacts various organizations globally. The study, conducted jointly by Entrust and Docusign, explored the trade-offs that enterprises must navigate between ensuring security and delivering a positive customer experience.
According to the recently released Future of Global Identity Verification report, identity fraud poses a growing threat across industries worldwide, with a significant 69% of organizations reporting a rise in fraud attempts. The research further reveals that larger organizations with over 5,000 employees face an average annual direct cost of $13 million due to identity fraud, a figure that escalates drastically as the size of the organization increases. In fact, among organizations with more than 10,000 employees, 20% incur an annual direct and indirect cost exceeding $50 million as a result of identity fraud.
As cybercriminals leverage advanced technologies like artificial intelligence to carry out more sophisticated and frequent attacks, the need for robust authentication methods becomes increasingly apparent. The report highlights that 51% of respondents believe that fraud attempts are more common when relying solely on usernames and passwords for authentication, underscoring the vulnerability of basic single-factor authentication methods. On the other hand, 21% of organizations reported encountering fraud attempts against facial biometric liveness detection, emphasizing the effectiveness of more advanced authentication solutions.
Tony Ball, President of Payments & Identity at Entrust, debunked the misconception that enhancing security measures invariably leads to a compromised user experience. He emphasized that modern identity verification (IDV) solutions and adaptive authentication can strike a balance between strengthening security and offering a seamless user experience. By incorporating features like biometric selfies for user verification and background fraud checks utilizing AI-powered deepfake detection, organizations can enhance security without creating unnecessary friction for users.
In response to the evolving landscape of fraud tactics, organizations are increasingly focusing on advanced security measures, even at the potential expense of customer experience. Despite concerns from 58% of respondents regarding potential user frustration due to stricter fraud controls, a majority recognize the benefits of investing in identity verification technologies. A striking 70% of respondents believe that technological investments represent the most effective strategy for mitigating the financial risks associated with identity fraud, with 74% planning to increase their investments in IDV solutions. Organizations that have allocated substantial resources to IDV solutions reported an average savings of $8 million, showcasing the tangible benefits of such investments.
Mangesh Bhandarkar, Group Vice President of Product at Docusign, highlighted the need for enterprises to strike a delicate balance between security and user experience as identity fraud continues to escalate. By deploying intelligent and low-friction security measures integrated into the Docusign Identify portfolio, businesses can enhance trust, safeguard customers, and drive long-term engagement in a digital-first environment.
In essence, the research underscores the critical importance for enterprises to adopt robust IDV solutions to outpace cybercriminals and safeguard both their assets and reputation in an increasingly digitized world. The findings emphasize that stronger security measures need not compromise the customer experience but can, in fact, enhance it by fostering trust and ensuring data protection.