According to reports by the PwC, the sharing economy is all set to reach a market size of $355 billion by 2025. These figures are not surprising as the COVID-19 pandemic has been accelerating digitization since its beginning. However, growth comes at the expense of something. While sharing economy is changing the way people interact, there is an increase in the lack of trust and security.
Internet usage skyrocketed to 87% in 2021, which serves as a catalyst for the growth of sharing economy. The drastic digital expansion is rapidly changing everyday life processes from ride-sharing, online shopping, teaching, and renting to coworking. However, identity theft is simultaneously increasing and threatening the security of businesses. This article discusses how ID verification solutions combat sharing economy fraud.
The Concept of Sharing Economy
The concept of sharing economy was not very common before digitization. With time it has transformed everything. The availability of social media platforms for instant interaction is building a global village where people from across the share their interests. Considering this, industries such as finance, e-commerce, and education are making efforts to thrive in the sharing economy.
The sharing economy, in its true sense, is an economic model that initiates collaborative activities that do not require financial compensation. This model has various options in place for businesses striving to widespread their services across global customers. Sharing economy facilitates the following type of interactions that ultimately benefit companies:
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Open and Free Knowledge
Sectors such as social media bring global users together and provide them with an easily accessible platform to share thoughts, ideas, or other information. This spread of knowledge further aid in businesses’ growth. While information sharing is copyright-free, identity verification helps online interaction platforms to bridge legitimate users and prevent the spread of hatred.
Retail and trade businesses have seen tremendous growth since the inception of sharing economy. This is because it facilitates the exchange of goods as well as services. Furthermore, the use of feedback and online marketing carves ways for industries to retain more worth, reliability, and acceptance while increasing revenue generation. The use of identity verification services further accelerates collaborative consumption by allowing legitimate users to indulge in goods/services exchange.
Coworking, freelancing, and remote hiring are the new normal in every business. Companies onboard employees from far-off regions to save infrastructural as well as facility management costs. Furthermore, shared worksteads provide space to multiple businesses where employees belonging to diverse Job Descriptions (JDs) share their skills. ID verification enables companies to hire workers by performing advanced checks on their backgrounds and authenticity for secure digital onboarding.
The sharing economy has another advantage, it bridges the gap between global users and banking systems. Transactions can take place without involving intermediation by a traditional financial institution. Therefore, digital payment providers are using AI-powered identity verification services to provide secure transactions in the sharing economy. This way, they easily meet customers’ demands regarding privacy, convenience, and security.
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Increasing Threat of Identity Theft
An individual requesting ride-sharing is unaware of the other traveler. Similarly, online shopping platforms’ legitimacy is another concern that directly affects customer experience and retention. The lack of trust is holding back peer-to-peer transactions. Synthetic identity fraud and other security concerns are driving severe backlashes for digital banking systems.
In order to support businesses in the sharing economy to fight against criminal risks, AI-powered identity verification solutions are offering various techniques. With real-time identification, biometrics analysis, document authentication, and liveness detection, companies can restrict fraudsters’ access. Furthermore, identity authentication safeguards their onboarding processes against imposters. Ultimately, this aids in assisting legitimate customers and attaining a huge user base.
Identity Theft Protection – Ensuring Trust and Security in the Sharing Economy
While initiating a transaction, shopping from e-commerce stores, and remote hiring, individuals are the most concerned for their security. The increasing threat of synthetic identity fraud is risking adoption of sharing economy. Furthermore, businesses face serious risks of legal repercussions and reputational damage.
Customers are more likely to prefer sharing economy brands that hold strong identity verification systems. In order to meet customers’ demands, integrating efficient IDV mechanisms has become a liability for businesses. Furthermore, identity theft protection solutions offer the following services:
- Verifies customers in real-time
- Validates documents critically by using Machine Learning (ML) tools for additional security and error-free client background checks
- Uses biometric analysis for selfie-based ID verification
- Provides multi-factor authentication to restrict financial scams
- Enhances customer experience by offering user-friendly processes
The concept of sharing economy does not seem to fade. Considering the customers’ adoption of digital services, may they be shopping, finance, teaching, or any other, businesses need to bring in efficient biometric identity verification systems. They help businesses enhance customer protection, provide personal safety, and prevent external criminal exploitation. Hence, AI-powered identity verification services are the business’s reliable options to thrive in the sharing economy.
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