Why do banks ask “public records” verification questions when confirming identity?

IN addition to what Christian Bee has cited, banks usually use tools/services like ID (See: http://www.idology.com/ to screen you on the spot (either over the telephone or online) to determine who you are based on your SSN information and credit report and/or public records. Your failing does not necessarily mean you are not who you say you are, it just means, you need to be screened and verified further as the system clearly was not able to do this comfortably for the bank. You are essentially "flagged" as being not who you are. This can go both ways.