Identity verification and authentication are only relevant for specific businesses. Others require them as part of their Know Your Customer procedure. However, there are other ways to maximize the value of the checks.
Let’s go over the fundamentals and explain why some strategies are more beneficial than others.
What is Identity Verification?
Identity verification is a term that describes the process through which the organization validates a person’s identity. It assures that the identification process is accurate, that there is a genuine person behind an activity, and that the person is who he claims to be.
It is especially crucial in the context of fraud protection. Because reporting fraudulent identities is frequently the most effective approach to limit harm to the firm. According to Shufti Pro News, USA lenders have experienced $6 billion in losses through synthetic identity fraud.
How to Perform Identity Verification?
Every organization should put these three procedures in place to validate identities:
- Identification: In this phase, organizations can collect and record user data at any moment.
- Identity verification: The company makes sure that the data provided by the customer is genuine and that the person who’s going through the verification phase is not committing crimes synthetic identity fraud or identity theft.
- Identity Authentication: Companies verify that the confirmed data is consistent each time the user returns to the company’s site for identity theft protection.
Authentication occurs only after validation. While ID verification is normally only required once, client authentication may be required numerous times, for example, if a person signs in from an unfamiliar device or place.
Significance of Identity Verification Service
Verifying a user’s identity is critical for demonstrating that the payment or other procedures are being carried out by the real owner. Fraudsters build bogus profiles before exploiting the company, whether they intend to default on a digital loan, create several profiles to misuse the promotional system, or trigger associate benefits.
In simple terms, fraudsters, and thieves do everything they can to avoid linking to real identities. But more significantly, ID verification is becoming a regulatory and compliance concern.
While this has always been the case in banks and other financial organizations, which results in greater demand for identity verification services across a number of sectors. This contains online retailers, online travel agencies, and payment platforms.
Difference Between Identity Verification and Identity Authentication
The terms identity verification and authentication are frequently used as synonymous. Nevertheless, the verification process normally occurs upon signup, when the companies meet the individual for the first time. Typically, authentication refers to an existing user whose authenticity must be validated before they sign in to the profile
How to Use Identity verification Services for Business?
The crucial aspect to remember is that outsourcing these operations to a third-party firm is often less expensive and easier to expand. Off-site management may make it easy for the company worked, but it may raise customer data security problems.
There are about four options businesses may implement for eKYC and digital onboarding. Now let’s examine which ideas work and which do not.
Video and Document Verification System
Customers are asked to upload high-quality photos or videos of their original identification papers. Driver’s licenses, passports, identification cards, residence permits, and voter ID cards are examples of such documents.
In most cases, a selfie ID must be provided together with additional verification documentation.
Biometrics Identity Verification Systems
Biometrics are physiological measures that should refer to a person’s distinguishing characteristics. These include fingerprint scanning, facial verification, and voice recognition.
Many nations have yet to recognize biometric identification as legally acceptable, although it is becoming more prevalent.
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2 Factor Authentication
2FA (Two Factor Authentication) and OTP (One Time Password) are two types of multi-factor user authentication that validate customer identity by connecting them to multiple devices.
Electronic Footprint Analysis
The notion of an online footprint for identity verification differs greatly from the approaches discussed above. The clients have a digital presence, and they must input information on the company’s site in order to register, log in, or complete a purchase.
Why not gather as much data behind the curtains as necessary to verify user identity? While this was a frequent practice of OSINT (Open Source Intelligence) strategy, doing it physically is a resource-intensive and time-consuming operation that does not grow. This is why companies chose to digitize it, resulting in consistent digital footprint outcomes via data augmentation.
This enables companies to collect social media data associated with email addresses and contact numbers. An effective identity verification service software that allows companies to collect pieces of data such as social media accounts, comprising bio, avatars, and last saw the date on the site.
Implementing a robust identity verification service can assist businesses to reduce identity thefts and financial frauds. Additionally, it prevents customer data which ensures a positive customer experience. Which enhances the brand reputation.