The Legacy of Employment & Income Verification
While Ronald Reagan popularized it, the famous trust but verify term has its genesis in a Russian proverb. Truth has always been hard to come by. That makes verifying the claims and statements made by individuals essential to running a business in today's climate.
Verification of a person's employment and income is nothing new. Governmental agencies, as well as businesses (from lenders to insurers to employers themselves) have been conducting these verifications for as long as documents have been falsified. The most basic way to conduct this type of verification is to communicate with the employer directly and just ask. Said another way, If 'Sara' is applying for a loan from 'Bank A' and Sara states that she makes $55K a year working at the Olive Garden, Bank A will contact the Olive Garden and make sure Sara's claim is valid.
The volume of these verifications is immense; estimates suggest that at least $100B is spent on this type of claim each year. This demands a lot of personal interfacing. So, ancillary businesses have been created to facilitate this process.
With access to one-third of the American working population, 75% of Fortune 500, and 85% of federal government agencies, Equifax's subsidiary The Work Number (TWN) is the undisputed leader in this environment. Over the past 70 years, TWN has built a powerful two-way data stream between employers and themselves where employers provide information on their workforce in exchange for TWN interfacing with the government on unemployment claims and other administrative matters.
The deal — TWN can resell its data to businesses requesting verifications. In essence, Equifax controls the standards for income and employment verification and unfortunately, the standards leave an opening that is, luckily, open to innovation.
Let's think about how to process verifications:
Party — The individual or organization asked to confirm information on an applicant.
Method — What system is used to collect the information requested.
Speed — The time to receive a completed verification from the requested party.
Accuracy — The veracity and timeliness of the information given.
Granularity — How detailed and continuous the data provided is.
Cost — The expense paid to complete the verification process.
Let's assume there are only three parties that can complete a verification:
The individuals themselves.
The relevant employer.
The third party verifier (e.g. TWN).
There has been little innovation in this field largely because TWN has been seen as good enough. They have standardized information that can be provided quickly and effectively bypasses applied consent of both the individual and the employer.
An upstart in San Francisco called TrueWork should be commended for their work to improve this process. They sell a software suite to the HR department of any employer that converts paper verification forms into their digital suite. Their software automatically fills out the questionnaire through a connection with that employer's payroll vendor and then automatically sends the information back to the verifier. Its service is an additional benefit to HR teams because it streamlines manual administrative processes. The downside is that the verifier continues to send out paper forms and because of TrueWork's size, their services work with around .1% of employee data.
There is a better way and Argyle is providing it. Today Argyle can run employment and income verifications on over 20M accounts or ~13% of the United States labor force. By the end of Q2 we are on track to cover 25% of the United States labor force. If our projections are correct we should get to 50% by the end of the year. Let's see how we stack up:
Argyle is automating the same verification processes that firms have been using for decades. The source of truth for any verification can always be sourced to the employer. Argyle enables verifiers to get direct access to this truth by empowering employees.
How do we achieve this? Complex federal laws (GDPR, CCPA, FCRA, PSD2) all have the same central premise-that employees own the data they generate. Employees are generating data elements like attendance, income and employment status. Argyle is enabling access to this self-generated data in a way that is much needed but thus far has not been offered.
What has always been a long and drawn out process can now be streamlined due to technology and a set of legal frameworks. Data ownership is now accessible to its creators.
If your business conducts income and employment verifications, Argyle is ready to offer a cheaper, faster and more granular way of accessing the information you need to run your business in a drastically more efficient way.
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