Elevate Your Business’ Identity Verification with Phone Verification

In today’s interconnected world, mobile phones are more than just communication tools; they have become our wallets, keys, and IDs. As smartphones dominate our lives, businesses have a unique opportunity to leverage them for seamless user interactions—but also face challenges in keeping this access secure.

According to the Mobile Fact Sheet by Pew Research, the number of people who own a smartphone has gone up from 35% of the US population in 2011 to 91% of the population in 2024. This increase in number comes with a growing threat of fraud. Bad actors often use phone numbers to intercept messages and front as genuine customers to access sensitive information. Businesses need to build more robust verification systems that go beyond personal identification and also verify the legitimacy of the phone numbers held by the user(s). This is where phone verification comes into play. Let’s see how phone verification affects and can help your business.

What is Phone Verification?

Phone verification involves authenticating multiple aspects of a user by utilizing their phone number and SIM card info. Phone verification can help your business authenticate the ownership, possession, and risk associated with the phone number that a user submits.

Businesses use these pieces of information and verify it with the information they already have. Discrepancies trigger a red flag which can then lead to reverification or flagging of the number. Phone verification isn’t just limited to the phone number and its ownership, your business can also use it to learn about the user’s device and phone number type and more.

How to Use Phone Verification to Assess Risk

Now, you might wonder, “How does a user’s phone number help ascertain their risk?” Well, using the phone numbers submitted by the user, your business can ascertain the user’s risk level using the following data points:

• Type of number: Phone number verification can help your business find if the number submitted is a personal number, a Voice Over Internet Protocol (VOIP) number, a toll-free number, or another type. Based on this information, the number is assigned a low, medium, or high-risk level.

• Carrier service: Phone verification helps your business find out the carrier service that the user subscribes to. While this information alone isn’t much use, it helps your business find if the user has switched carriers recently. Frequent provider changes can lead to a user being flagged as high-risk.

• Location of the phone number: Phone verification also allows your business to verify the location of the user based on the number they provide. Phone numbers with origins outside the US are usually considered medium to high-risk.

• Presence on blocklists: You can also check whether the phone number provided by the user is placed on any blocklist(s). High-risk numbers tend to be blocked by people and businesses and can help you avoid bad actors.

Based on these parameters, your business can either allow, block, or flag a phone number. Allowed phone numbers can continue to interact with your business, while blocked numbers cannot. Phone numbers flagged by the system are moved to manual verification where they can be allowed or blocked.

Benefits and Drawbacks of Phone Verification

Like any verification method, phone verification is not perfect. The method has its innate benefits and flaws. Let’s take a look at some of these to better understand phone verification.

Benefits of Phone Verification

• Low Friction: Phone verification is a fairly low-friction process. This means that the user needs to be minimally involved in the process. This helps maintain a streamlined process that ensures that customers do not drop off during the verification process.

• Improved outreach: Verified phone numbers can create a database of people for your business who interact with it. These people are already associated with your business and an effective customer outreach program can help your business retain these people.

• Better KYC Process: A verified phone number is another data point that can help create a more well-rounded customer profile. This can help improve your business’ KYC process, which in turn improves the security of your business and its clientele.

Drawbacks of Phone Verification

• Vulnerable to Attacks: Phone verification methods are often susceptible to attacks like phishing attempts, man-in-the-middle attacks, SIM-swapping, and more. These attacks can lead to sensitive data being leaked to bad actors.

• Dependent on Data: Phone verification is heavily dependent on mobile data and connectivity from the service provider. As a result, phone verification is difficult to conduct when the user is in an area with poor cellular service.

• User-end Problems: Phone verification is prone to errors due to human involvement. Common issues include incorrect phone numbers, OTP entries, and more. Also, customers are often reluctant to share their phone numbers, which can make phone verification difficult at times.

How Signzy Helps with Phone Verification

One of the most common methods of phone verification is OTP verification. Due to its popularity, it is easy for customers to use. Newer smartphone models can even auto-fetch OTPs to make their submissions streamlined.

However, for a robust verification process, it is recommended that multiple verification systems be integrated. Signzy’s Marketplace has various APIs to help you build a strong verification process for your business. Signzy’s Face Match API and Liveness Check API go hand in hand with the OTP verification to build a robust verification environment. The best part, all of these processes can be done as long as your user has a smartphone! Signzy has even more features ready to be deployed for your business and improve its KYC process. Book a call with us to find out how we can partner.

Conclusion

Owing to the increasing number of phone users in the country, phone verification has become a key process in a business’ KYC operations. However, due to its vulnerabilities, phone verification alone cannot create a well-rounded security system for your business. Building a trustworthy security system requires a 360-degree approach. Since building these systems from scratch can lead to your business incurring significant engineering costs, it is recommended that you employ the help of third-party service providers.