Three Reasons Why 2024 will be the Year of Identity Resolution
As we get stuck into 2024, most of us are already forgetting our New Year’s resolutions, but this year I believe the word “resolution” will take on a new meaning to many people, because 2024 will be the year that “identity resolution” goes mainstream in the marketing, compliance and fraud prevention industries.
But first — what is “identity resolution”? Put simply, identity resolution is the term given to the process of identifying individual customer profiles that in fact belong to the same person, and then deduplicating or linking them together.
#1 The End Of The (Tracking) Cookie Monster
It’s been a long time coming, but 2024 should finally be the year that tracking cookies become a long distant memory. Google Chrome, which handles the vast majority of web traffic, will follow Safari and Firefox by eliminating third-party cookies by the end of the year (they have started!).
This means that marketers, who depend on third-party data via cookies to inform their ad campaigns, will now be scrambling around to find alternative methods to identify customers across devices and websites.
The answer is identity resolution — using first party data server-side to link together individual customer records into one unified customer view. It is not easy to do, and it is especially difficult to do in real-time and at large scale, but it is the marketing industry’s best shot at continuing to understand how well they are spending their advertising dollars.
#2 The Dawn Of Perpetual KYC
Traditional Know Your Customer (KYC) checks at financial institutions are carried out when on-boarding a new customer, and periodically (often measured in years!) thereafter. A push on financial crime and anti-money laundering regulations in both the US and the EU has put the spotlight on the inadequacy of such infrequent reviews.
The future of KYC is perpetual monitoring, whereby identity resolution technology is a core component of financial services’ internal technology stacks. Any unexplained associations between customers, both new and existing, can be identified and alerted to the compliance team, and similarly updates to sanction lists can be compared to customer bases.
Most importantly, modern identity resolution technology allows this perpetual KYC monitoring to happen in real-time, with no manual screening or intervention from staff required until a potential compliance issue has been identified by the software.
#3 Stemming the flow of BNPL fraud
One of the biggest fintech trends in recent years has been the rise of Buy Now Pay Later (BNPL) companies, such as the Swedish giant, Klarna.
A model that seems almost too good to be true — receive the products now and pay for them later when you want — it has, unsurprisingly, been beset by fraud issues.
At the core of the BNPL industry’s fraud woes is the humble customer identity. Fraudsters create multiple fake accounts to order products with no intention of paying for them. Whilst a human might be able to see the similarities between these fake accounts, this is clearly impossible for humans when hundreds or thousands of new customer accounts are being created every minute.
Enter our hero for 2024 — identity resolution technology — which takes the computationally challenging task of connecting all these individual identities into so-called “identity graphs” that provide superior data for training and running machine-learning fraud detection models.
The mistake of the past was trying to use conventional data technologies such as graph databases, in-memory data stores or search engines to make these customer identity associations. The fraud prevention successes of the future will be based on harnessing the power of the tool that is built for this job: real-time identity resolution technology.
Originally published at https://tilores.io.
