Digital identity verification has not changed for more than a decade. Often relying on static data held by the major credit bureaus, much of which has been repeatedly stolen and is readily available to fraudsters on the black market. These traditional approaches deliver poor accuracy and often force businesses to manually review up to half of all digital new account opening applications. Some even manually review every application!Meanwhile, legitimate customers continue to be erroneously denied, fraudulent applications continue to get approved, and everyone continues to be frustrated. The promise of full digital customer acquisition and onboarding is being impeded by antiquated identity information models.The only way to break this cycle is, well\u2026 to break the established rules.By rules, I mean the status quo of commonly followed procedures for verifying identities that are inhibiting performance and stifling innovation.\u00a0Here are the top four \u201crules\u201d that need to be broken.The more rules, the betterIn IT, we now generally recognize that traditional rules-based models are struggling to keep pace with digital workflows. With nearly 2.5 quintillion bytes of data produced per day, it\u2019s impossible for humans to keep pace, too. This is especially true for online identity verification where relying on human-created rules just isn\u2019t working very well. Humans are limited by their own knowledge, biases and capabilities.Discerning subtle patterns and nuances across thousands of interactions to accurately identify fraud is extremely complex. While rules-based systems can detect a respectful measure of fraud, they also miss a large percentage and frequently misidentify legitimate transactions as fraudulent. This leads to a great deal of manual review, which is not only costly, but often disrupts the customer experience.Improving performance of human-built rules engines often requires continuously writing a large number and more complex sets of rules in an endless cycle. Humans can\u2019t keep up, but robots can. Artificial intelligence and machine learning techniques can be used to sift through large data sets to uncover patterns people can\u2019t see.To err is human, so the saying goes, which is why we need to trust the data and get humans out of the loop.\u00a0 Getting rid of clunky, error-prone rules systems and automating digital identity verification is the path to greater accuracy. With all the data constantly being generated, machines are beginning to know us better than we know ourselves.\u00a0\u00a0Static data sources are sufficientIn a digital world, static sources like credit bureau databases have become too limited to achieve any type of meaningful accuracy for identity verification. Given the level of personally identifiable information (PII) constantly being exposed in the weekly stream of corporate breaches, it\u2019s obvious that relying solely on what is essentially stolen data for identity verification no longer is reliable. If the data used to verify identities is the exact same as the data being used by criminals to impersonate identities, how can it work?\u00a0A better approach is to combine the common static data elements with other online, offline and social media sources. One type of data is rarely enough to identify a person, but many pieces of data webbed together create a more holistic picture of identity. One of the byproducts of digitalization is that most individuals are continuously creating a massive digital footprint daily. From web browsing to emails to social networks, the trails we create are unique to each of us and virtually impossible to spoof.\u00a0Using online and social identity information for identity verification can deliver extremely accurate results. For example, it is much easier for a fraudster to buy stolen PII on the dark web, than to recreate an individual\u2019s entire social network. Beware the fake friend requests or invites!Identifying first-time users requires manual reviewVerifying the identity of an individual that\u2019s never done business with an organization in the past, especially through remote channels, is perhaps the most difficult challenge in fraud prevention. While many highly effective technologies are available for authenticating returning users, traditional approaches for validating new customers are fraught with problems. In fact, they invariably lead to very high manual review rates, with significant false positives and false negatives.Many companies now rely on their online channels to acquire new customers, but still use traditional identity verification mechanisms, to risk score applications, which effectively sabotages these efforts. Low accuracy rates result in good customers being erroneously rejected. Meanwhile, attempts to increase acceptance rates can create so much friction that prospects will often abandon the application process.Breaking the previous rules can reverse this cycle.The rules can\u2019t be brokenBreaking from long standing approaches and techniques is never easy, especially those related to risk management and fraud prevention, even when they are clearly outdated. Identity verification is no exception. It\u2019s important to keep in mind that digital transformation is affecting all the systems and business processes that rely on identity. Building a state-of-the-art performance automobile, while powering it with 10-year-old engine doesn\u2019t make sense. Neither does \u201cnot\u201d breaking these four rules.