Learnings from the sessions and conversations with marketplace leaders at MRMC.
If there was a single insight from this year’s MRMC, it’s that the threats of fraud and platform abuse are evolving at a lightning pace and marketplaces need to evolve their strategies to close the gap. With the increase in frequency and visibility of trust and safety breaches, trust has become increasingly fragile – and more valuable. To truly protect your marketplace from financial and reputational risk, you need a multi-layered risk management approach that goes beyond simple verification.
Here are our key insights to help shape your approach to risk management.
1. Identity verification is just a starting point.
The conference underscored a critical distinction: identity verification and effectively managing fraud and risk are not synonymous. Effective fraud prevention requires integrating multiple, actionable risk signals into automated workflows. This approach reduces operational overhead while ensuring platform safety by filtering out obvious threats and reserving intensive checks for those who pass initial screenings. Solutions like Checkr Trust offer flexible identity solutions and instant criminal screening, uncovering not just identity risks but also criminal risks that could harm your platform.
2. KYC is a compliance check box, but doesn’t protect your marketplace
Know Your Customer (KYC) processes are crucial for compliance, but fraudsters often bypass these checks. Deloitte projects that fraud losses in the U.S. can reach up to $40 billion by 2027 due to tools like generative AI in financial services alone, and marketplaces are not immune. Marketplaces need to challenge themselves to think of the behavior they want to encourage and focus on protecting their business from evolving fraud tactics.
3. IDV providers miss critical indicator of fraud
Most identity verification providers market themselves as risk intelligence solutions, but nearly all lack instant access to criminal intelligence. Given that 53% of fraud offenders have prior convictions, incorporating criminal intelligence into your risk management strategy enhances security and reduces operational burdens. Our partners who have integrated these signals into their workflows also emphasize that criminal intelligence protects their brand reputation by showcasing their commitment to trust and safety.
4. Cross-team collaboration is critical for effective risk management
Effective risk management is not an isolated effort; it requires collaboration across the entire organization from legal, to risk, to trust and safety, and growth teams. While growth and trust and safety can sometimes seem at odds, sharing insights and aligning on tradeoffs helps the marketplaces as a whole. Embracing friction can be necessary if it means protecting your platform and community.
5. Adapting to legislative changes
We are currently in a unique legislative environment characterized by federal deregulation, with states stepping in to fill the gaps. This situation demands flexibility in your risk management solutions. Continuously re-evaluate what is most important to your business, not just today but in the future, and take proactive steps to protect consumers, even when not federally mandated.
Conclusion
The conference highlighted the increasing complexity of managing fraud and risk on platforms. By adopting a multi-layered approach to risk signals, fostering collaboration across teams, and staying flexible in the face of legislative changes, you can create a safer environment for your users. Remember, identity verification is just the beginning; the real challenge lies in effectively managing the broader spectrum of risks to keep your platform secure.
To learn how Checkr Trust ensures safe marketplaces with integrated identity verification and criminal court data, schedule a demo today.
