Businesses are increasingly shifting from email verification to phone verification for on-boarding new customers. This is particularly prevalent in apps. There are many developer-friendly APIs like Twilio and Nexmo that make it easy to integrate verification functionality into your app, and there are several benefits to using phone verification.
Benefits to phone verification
For starters, a phone number is unique— similar to a social security number, and unlike an email address, they are difficult to makeup. They are also popular because marketers can learn a lot about a consumer based on the phone used during sign up. However, this shift to SMS verification is creating problems for businesses, which can be solved by better insight into a phone number.
Better insight to a phone number
The communication landscape is evolving quickly, as demonstrated by the growth of developer-friendly services like Twilio and non-fixed VoIP providers like Google Voice. VoIP and SMS are becoming more accessible to businesses and developers. This makes it cost effective for companies to leverage verification services during sign up even at a high scale. However, this accessibility has also enabled fraudsters to obtain SMS services to create illegitimate accounts.
Whitepages Pro can help businesses reduce risk by leveraging our Phone Intelligence. Our industry standard phone metadata is intended to help carriers route voice/SMS traffic (i.e., how do I get this SMS from carrier A to carrier B?) Whitepages Pro approaches phone data from a risk management and marketing prioritization standpoint. We allow our users to segment their customers with more granularity than the standard Telco requirements. Because of that, we have aggregated multiple phone metadata sources to more effectively accomplish these goals.
Phone Intelligence allows our customers to segment users during account creation based on their risk profile (e.g. they can identify higher risk sign-ups like Google Voice, Burner app users and other non-fixed VoIP carriers) or if the sign-up came from a pre-paid phone. All of this data points to a possible fraud suspect and can be used to correlate to different risk profiles.
Testing our potential
We conducted a data test with a well-known online consumer services firm to better understand what mobile phone data said about the probability of someone being banned from their services. When you have millions of customers, a change to your business logic used to identify high-risk segments (i.e., people who have a high potential for being banned in the future) can have huge financial impacts.
Our study was run against a dataset of several thousand records with an even distribution of good (not banned) and risky (banned) outcomes. Here are the results for the phone numbers used in their account registration process:
- Phones that were mobile, yet not on pre-paid plans, and registered on the DNC are 92% likely to NOT be banned. These are good customers; pass them through the verification process with ease.
- Phones that were on pre-paid plans were banned 76% of the time.
- Fixed VoIP phones were banned 100% of the time.
- Landlines were banned 73% of the time.
- Popular non-fixed VoIP carriers like Google Voice, Skype and others were banned 67% of the time.
We ran this test against a very specific outcome that was critical to this company. By implementing rules based on the data attributes of a phone number, we were able reduce fraudulent account creation by 40%.
Regardless of the industry you are in, our Phone Intelligence gives you insight into the quality of a consumer. The result? You spot fraud before it happens and give your good customers the quality experience they deserve.