It’s time to bring identity verification and fraud prevention back together

This article is a guest post by Alex Johnson, originally published in the February 28th edition of his newsletter, Fintech Takes. In the article, Alex shares why he thinks identity verification needs to be at the forefront of your fraud prevention strategy.

My philosophy for personal security is centered around access control. If I keep my doors and windows locked, especially when I’m not at home, I generally feel like all of my stuff will be safe.

My sons, who are five and three, have a very different philosophy.

They watch their stuff. They watch it very, very closely. Whatever stuff they’ve decided is most important to them at that moment – toys, books, etc. – they watch it the way that security guards at the Louvre watch the Mona Lisa. It’s remarkable. They’ll tuck it into their beds when they go to sleep, and it’s the first thing they think about when they wake up at 5:00 AM, as if their subconscious minds had been focusing on nothing else for the previous 10 hours.

I try to tell them to calm down. I try to reassure them that their stuff is safe. But still, they persist with their Mad-Eye Moody-level vigilance.

And honestly?

It makes sense if you think about it from their perspective.

Unlike me, they have no control over access to the house. To them, our house is a circus of tall humans, all coming and going at somewhat random and unpredictable intervals. Sometimes, it’s someone they know well (like a grandparent), but oftentimes, it’s someone they don’t know and didn’t invite (why is that guy fixing our fridge?)

To them, the only sensible model for keeping the stuff they care about safe is to focus on that stuff, exclusively.

Don’t worry about the front door. Worry about your Legos.

If you look at the current state of fraud management in financial services, what’s interesting is just how similar most banks and fintech companies are to my kids.

Everyone is watching their stuff. Almost no one is watching the front door.