If someone requests two forms of identification from you, what documents come to mind? Your driver’s license or state ID? A passport? How about your social security card? These are the most common forms of identification requested when performing such tasks as opening a new bank account, signing up for health insurance, renting an apartment, opening a new credit card account, or providing identification to be placed on the payroll of a new job.
Social security numbers, in particular, are a long-ingrained part of the banking industry, used as the “gold standard” for both identification and the running of credit checks on potential customers.
But did you know that your social security number was never intended to be used as a form of personal identification?
Requesting and storing customers’ social security numbers puts them at greater risk of identity theft. For example, many banks are using old technology to store customers’ personal identification information.
In his article on AmericanBanker, Husayn Kassai adds, “On top of this, none of the many business units within a bank are connected to each other. For instance, the loans department and checking department will need to prove a customer’s identity separately.”
In times like these where data breaches are on the rise, companies should be reconsidering their storage and requirement of social security numbers and opt instead for other methods of identification.
So how can banks and financial institutions move away from storing or requiring social security numbers?
According to Kassai:
“Modernizing the current identity system in America is crucial to overcome its heavy reliance on SSNs. Banks and government must be involved to make that happen. Having an SSN today makes an individual extremely vulnerable to identity theft. What’s certain is that if we continue to rely on centralised databases holding personal identifiable information used to identify us, we will continue to see large-scale data breaches occur, which then lead to a greater catalog of stolen identities for fraudsters to use. Changing the system will require proactive action from policymakers to get ahead of the problem in a way that enhances security, privacy and convenience for the consumer.”
For more information on this topic, read the whole article here: Banks Need to Stop Relying on Social Security Numbers