What do you mean by Identity Verification? Why is Identity Verification an important process?
Ever since the digital transformation in banking, we have seen a giant shift towards digital onboarding in financial services. Technologies like liveness and identity verification solutions have started to be a prominent step in intelligent digital onboarding. ID verification software with the capability to onboard customers quickly and remotely have helped in this shift towards digital customer onboarding.
Going forward into 2023, lets understand how these Identity Verification Software work and why it is a crucial step for all businesses to use an identity verification solution on their platform.
Identity Verification: What is it?
When opening a bank account, asking for a loan, or engaging in other financial transactions, identity verification is a crucial step in making sure a person is who they say they are. Although identity verification is a crucial security tool in the fight against new account fraud, it also helps financial institutions’ Know Your Client (KYC) and anti-money laundering (AML) initiatives, which evaluate and track customer risk.
What is Online Identity Verification?
The identity verification idea is brought to the distant world of today through digital identity verification. Due to the surge in data breaches, account takeover assaults, and identity theft as well as the COVID-19 pandemic’s increasing need for remote procedures, organizations need to spot identity fraud and assess whether an online user is who they say they are.
Companies, governments, and financial institutions can use digital identity verification tools to assist with online identity verification. These tools include biometric verification, facial recognition, and digital ID document verification.
When a person is not physically present and cannot provide their ID paper, digital identity verification can be employed. Using e-gates at airports to scan passports is one example of how digital identity verification may be utilized to speed up ID verification.
A crucial stage in the account opening and client onboarding process is digital identity verification. Financial institutions can do checks to make sure that an application is not a fraudster, criminal, bad actor, or trying a scam by validating the applicant’s identification.
How does an Identity Verification process work?
Digital identity verification and identity verification solutions come in a wide variety of forms. When using a digital identity verification technique, the person’s face biometric or ID document is compared to a confirmed data set, such as information from a passport or a biometric saved on the user’s registered mobile phone. To confirm that a person is who they claim to be, digital identity verification checks the supplied data with the verified data set.
Digital identity verification is done using a variety of techniques that all function differently. These techniques consist of
- ID Document Verification: Examines the validity of the ID (such as a driver’s license, passport, or official ID).
- Face Match: Selfies are used as part of biometric verification to confirm that the ID-holder is the same person as the one whose picture is on the document.
- Passive Liveness Detection: Determines whether a person is real by looking for spoofing techniques like face masks or filters on a live session.
- One-time Passcode (OTP) Verification: During the verification procedure, the applicant receives an email or SMS with a one-time passcode to verify a phone number or email.
- Database techniques: Database techniques use information from offline databases, social media, and other sources to validate the information provided by the applicant.
What is Identity Verification used for?
Financial services, digital enterprises, travel and leisure, sharing economy firms, telecom, FinTech, gaming, and entertainment are some of the industries that employ identity verification services.
Identity verification services are employed both offline and online. These services are used to prevent fraudulent activities, underage signups, spamming, and criminal behaviors including harassment, identity fraud, and money laundering, social networking sites, e-commerce platforms, and online forums. To open a bank account, for instance, identity verification is necessary for the banking industry.
With the popularity of cryptocurrency exchanges rising, there is a growing push for regulation. The Financial Crimes Enforcement Network (FinCEN) of the U.S. government has proposed regulations that would impose reporting, record-keeping, and user identity verification requirements on banks and money service businesses (MSBs), such as cryptocurrency wallets.
Here are a few specific scalable use cases in identity verification:
Remote Onboarding:
- Digital identity verification is utilized to enhance the client experience and enable remote onboarding for new account opening and lending.
- New clients anticipate being able to register online. Therefore, it is necessary for banks and other financial institutions to provide digital account opening via the internet and mobile platforms.
- Financial institutions need to find out how to fully onboard a consumer remotely if they want to attract new clients through digital channels. This necessitates the expansion of many financial institutions’ online capabilities to include digital identity verification. They will be better equipped to compete with established competitors and new market entrants if they can accomplish this objective more quickly.
Real-Time Fraud Deterrence:
It is crucial that financial institutions identify application fraud during account opening given the damage extent and consequences of fraud. If a person is not who they claim to be, it can be determined through digital identity verification. Financial institutions may prevent fraud by authenticating a user’s identity verification in real-time, whether that person is online or on their phone, by using digital identity verification techniques like face biometrics.
Financial institutions may use facial comparison to verify that a user is not attempting to create an account fraudulently if they are unsure about the identity of the user (such as in the instance of a net-new client applying remotely for a new account).
Here is how face match is used to verify an applicant’s identity and demonstrate that an applicant is present during the establishment of a digital account:
- The legitimacy of an applicant’s passport, ID card, or driver’s license is checked through document verification.
- The applicant is then invited to take a picture with their portable device after the validity of that ID document has been established.
- For the purpose of demonstrating that the verified individual is actually present while the account is being opened, liveness detection and facial comparison technology compares the selfie image with the image from the verified ID document.
Automated Identity Verification:
Automated Identity Verification is another frequent user of face match. Real-time authentication of the ID document and the presence of the legitimate passport owner is done through identity verification and document verification utilizing facial matching. A real-time photo of the individual seeking to signup for a service is compared with an image of the ID database from a reliable source throughout this procedure.
IDcentral’s streamlined Identity Verification software will help you to carry out customer onboarding digitally while verifying their ID documents, biometrics and AML compliance. Customers Experience is ensured with our AI based authentication in fintech and newly established platforms alike.
Try IDcentral’s Identity Verification solution with Intelligent Liveness and Face Verification
*** This is a Security Bloggers Network syndicated blog from IDcentral authored by SEO EXPERT. Read the original post at: https://www.idcentral.io/blog/what-is-identity-verification/
