Identity Verification – Its Methods, Use-Cases, and Benefits

In this highly digitized world when demands and services go side by side, there are several challenges that need to be treated side by side. The digital space is mostly anonymous where people can hide their identities. Using those fake profiles and accounts, people perform various malevolent activities. An array of cyber criminal activities are taking the internet to a storm. The increasing incidences of cyber attacks, identity theft, data breaches, and account takeover (ATO) fraud call out for stringent identity verification methods that could help fight against the fraudulent attempts in the digital environment.

For identity verification, strong customer authentication methods are required that could help the online platforms to ensure security. Identity verification has various forms, methods, and benefits. It aligns well with the security requirements of the digital space which is under the threat of cyber attacks. The following are some authentication methods that can be employed by online platforms as per their clientele, processes, and operational infrastructure. 

Some methods of performing online identity verification are as follow:

Biometric Identity Verification

Customer Due Diligence or CDD is a regulatory requirement that calls out for stringent identity verification procedures that can be employed through online biometric verification. Facial recognition is a biometric authentication technique in which using the facial biometrics of the user, identity is verified. Other biometric authentication mechanisms include palm recognition, fingerprint scanning, iris/retina scanning, etc. Biometric verification has various innovative features such as liveness detection and the 3D perception that mitigate the risk of spoofing attacks.

Address Verification

This method of identity verification ensures proof of residence for the identity verification of users online. Through the document, the address is extracted using OCR data extraction. These documents include ID cards, utility bills, driving license, and bank statements, etc.

Document Verification

Digital document verification is also a method for identity verification in which an official ID document of a user is scanned by the document verification system to extract details from it and check whether the document is real or not. The user uploads the document picture and through OCR technology, data is extracted from the document and then verified.

2-Factor Authentication

In this method of 2FA, a quick and secured remote user authentication can be ensured. In this method, a personalized code is been send to the mobile phone of the user which the user would need to enter in order to get access to the account. 

KYC and KYB Checks

Know Your Customer (KYC) and Know Your Business (KYB) both are essential for the businesses. They are requirements by regulatory authorities to verify their customers and businesses to mitigate the risk of fraud with these entities. Hence, KYC and KYB checks are integrated into identity verification systems that screen the customers and businesses against various checks to validate their identity. 

Age Verification

Age verification of customers is a regulatory requirement in many countries. Especially the eCommerce and gaming platforms in certain regions of the world are required to verify the age of customers before providing products and services to them. 

AML Screening

A part of identity verification is the AML (Anti-money laundering) screening of customers. It is a process in which an identity of the customer is monitored against a variety of updated lists of criminals. These watchlists include sanction lists, Politically Exposed Persons (PEPs), etc. which detect and discard the requests and transactions of the financial criminals. AML screening is effective to combat money laundering activities in the digital space initiated by the financial businesses specifically. 

The following are some use-cases of digital identity verification:

Secure Transaction

Financial businesses such as banks, insurance companies, and charity organizations provide the facility to customers for online transactions. In such use-cases, it is crucially important to ensure that the transactions are secure and not been done to some malevolent destination. The identity is verified against the variety of watchlists to make sure that some exposed person is conducting any transaction over the network. 

Digital Payment Systems 

Digital payment service providers can use identity verification methods such as biometric facial recognition systems. For stronger user authentication this method of identity verification is most adopted worldwide by the largest companies of the world. Even GooglePay authenticates its customers through facial recognition. This helps ensure controlled access over user accounts and their confidential information. 

Gaming Platforms

The gaming platforms are under the threat of cyber criminals. Gaming platforms are required to ensure stronger user authentication methods over user accounts and perform age verification of online customers. Moreover, gaming platforms also need to fight against the criminal activities of bad actors in the system.

Benefits of Online Identity Verification

Online identity verification provides a variety of advantages to businesses. It does not only deal with coping up the fraudulent ways of bad actors in digital space but also provide the following benefits for online business entities:

Save time and money: 

Online identity verification replaces traditional and weak authentication methods. They provide cost-effective solutions that do not only decrease the overall operational costs on employees and real estate but also save time by automating the system and digitizing it throughout the customer onboarding process.  

Better user experience:

Online identity verification ensures seamless verification of customers such that it does not affect the user experience. Enhanced and improved user experience aligns well with their expectations from the digital services.

Customer-centric strategy: the different methods and strategies of identity verification provide businesses an opportunity to adopt the method that suits them the most taking into account the nature and type of customers. This means that the approach should be customer-centri in which the focus is over the demands of customers and what method would be praised by them to show their identity in digital space. 

Higher conversion rates

Online identity verification solutions ensure a high business reputation. It provides improved experience for users which ultimately helps increase the conversion rate. The customer can now verify their identity in a swift manner that does not only take into consideration the aspect of customer services but also the overall customer journey and time spent on the platform.

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