Validating Consumers in The WFH and Digital Nomad Age

Validating Consumers in The WFH and Digital Nomad Age

How to Pin Down Identities When Digital Nomad’s Roam

Remote work, work from home (WFH), and digital nomads are all terms we’ve learned in the post-pandemic world. Despite the end of the pandemic, these lifestyles are not going away. Remote workers and digital nomads travel often and have changing identifying attributes. Businesses used to traditional methods of verifying customers’ identities are faced with unprecedented challenges, failing to tell legitimate users from fraudsters. With changing or nonpermanent addresses, unusual online activity, and unpredictable spending patterns, verifying real users and their transactions can become tricky, resulting in lost revenue.

Here, we’ll dive into how these lifestyles affect revenue, fraud, and customer experiences and explore how relying on digital footprints can solve the problem.

The growing population of digital nomads
Remote work and WFH are here to stay, and according to the survey of Business Uncertainty, business executives expect both fully remote and hybrid work to continue to grow. This means the lifestyle of digital nomads, i.e., employees who combine remote work and travel, will become more common. 2023 saw 35 million digital nomads, and we know that number will only increase.

A few components of this lifestyle are key to understanding the business challenges presented. 50% of digital nomads worldwide prefer to stay in one place for just a week or less. This causes inconsistencies in identifying information, as well as impermanent home addresses. At the same time, digital nomads are excellent consumers. Most digital nomads are Internet natives with high-tech or information-related jobs and, consequently, high-earners with much free income. With the majority earning around $123,500 a year, digital nomads are a demographic businesses don’t want to lose.

Validation pain points for digital nomads
Aside from lacking a permanent address, digital nomads often have inconsistent identifying attributes, such as changing location, timezone, how they connect to the internet, or what they buy online. When providing information in verification processes outside of their home country, digital nomads might have trouble:

  • Providing a home address
  • Receiving an SMS authentication message
  • Showing utility bills as proof of address
  • Providing proper documentation
  • Proving residency
  • Accessing local stores or home branches
  • Showing trust and credibility

According to Regula’s research, the validation processes that are hardest for digital nomads when arriving in a new location are:

  • Renting accommodations
  • Activating a new phone or SIM card
  • Securing a rental car
  • Buying airline tickets
  • Opening a new bank account
  • Financial transactions

Providing a mailing address is a remnant of the non-digital era that hasn’t adapted to this increasing population of digital nomads. These processes cause a lot of friction and result in poor customer experiences. Companies are losing out– from user dropoffs during signup, payments being declined, users failing to access their accounts due to suspected ATOs, and general fraud detection system false positives. All leading to significant revenue loss.

Digital footprints as the identifying alternative
So, what can we do to provide frictionless experiences when consumers are not tied to specific locations?

Proof of address and other measures tied to a location or permanent residence are no longer viable. Therefore, digital nomads should be identified based on their digital footprints. Digital footprints refer to the traces of information individuals leave behind throughout their online activities. This can be data from online purchases, online gaming, social media interactions, digital entertainment consumption, communications, or geolocation. Such footprints provide valuable information that helps verify a person’s identity when an online customer creates an account or makes a purchase.

Collaboration in a New Age
But tracking a moving target requires a team effort. Online consumers, including digital nomads, have established their digital footprints across the web, including on legitimate and safe marketplaces, platforms, online travel agencies (OTAs), and more. These consumers have already established trust with businesses and proven their legitimacy. This established trust built over a long history of interactions can be leveraged. Businesses seeking to validate a new user, even if their location or activity is inconsistent, can depend upon the trust already established throughout a user’s digital footprint. More importantly, by doing so, they can provide frictionless and positive customer experiences and win loyalty among a group that is being neglected by many.

How Identiq Can Help
Identiq’s private peer-to-peer network enables companies to collaborate and leverage their collective knowledge about consumers without sharing consumer data or information. When encountering new or unknown consumers, network members can query the network and find out if they are known and trusted by other network members. For legitimate, real digital nomads who have changing residences or phone numbers, the network is able to identify them as valid, given their positive, historic interactions with thousands of other companies. This solves the solution for consumers and merchants alike– consumers don’t need to jump through hoops to prove their identity, and merchants can approve their transactions and not miss out on revenue.

Want to learn more about how Identiq’s private network for identity and trust can increase approval rates and revenue?
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