With digital technology becoming inevitable for online businesses, online fraud has become an increasing concern. Payment scams and data breaches are on the rise while enterprises are busy figuring out how to safeguard their customers from identity theft. Financial crime not only leaves organizations in deficit but also takes a toll on their customer’s credit and identity information.
In this regard, financial organizations around the globe are striving hard to prevent cybercrime and meet compliance obligations. According to an estimate, the U.S. spent nearly $600 million last year in an effort to prevent account application fraud. In this type of fraud, falsified ID documents and the identity information of another person are used to open bank accounts.
Fraud Prevention Mechanism
Cybercriminals are always on the move with their malicious intentions. When it comes to the digital space, fraud is a quite common thing. This is why banks and other businesses operating in the financial sector have regulatory obligations to prevent such nefarious acts. Each onboarding user must undergo a Customer Due Diligence (CDD) process that will identify any possible risks associated with the prospect.
Digital ID Verification for Compliance
Today, online businesses are faced with the constant burden of regulatory compliance. Maintaining standards are essential to ensure that criminal figures don’t have access to sensitive customer and business data. The rate at which digital fraud is increasing requires a robust solution to address the problem, and ID verification systems seem to have the best possible answer. Apart from that, global identity verification solutions are based on state-of-the-art policies and procedures that allow enterprises to breeze through compliance regulations.
Digital ID authentication comprises different methods to identify and verify customers, one of which is document verification. The process is carried out by taking into account user documents that are issued by the government and are authentic. When combined with biometric verification, the procedure guarantees a foolproof authentication of the customer where the document photo is matched with the user’s face photo.
Digital identity theft, which is a growing concern for online businesses, can be solved with ID verification during the client onboarding process. Once the customer is free of suspicion and has verified all their correct details, they are fit to be enrolled with the business. This allows corporate entities to develop trust in the eyes of global regulators and in the market as well.
Documents Commonly Used
Here is a list of documents that are widely used in the ID authentication procedure:
- A state-issued ID such as a national ID card or an official photographic document
- A passport
- Driving License issued by an accredited organization
- Utility bills
- Rent or lease agreements
- Documents provided by a bank
Documents Used Less Likely
There are some documents that act as identity proof while others are not considered that authentic for an ID verification procedure. Here are some:
- Municipal tax statements
- Mortgage Statements
- Documents issued by insurance firms
- A certificate for voter registration
Documents that are not Acceptable
Based on compliance requirements by regulatory authorities, some documents are not fit for ID verification because of the lack of credibility and originality. Some of these are listed below:
- Mobile-generated invoices
- Internet phone bills
- Self-completed documents/applications
- Postcards and envelopes
- Informal letters
- Digital receipts for tax-related purposes
What is the Basis of ID Verification?
When it comes to digital ID authentication, the personally identifiable information (PII) of the end-user is of prime importance. Documents without PII normally don’t qualify for verification since they are missing essential details required to know the user/customer. Here are the basic requirements while performing ID verification of the customer:
- The full name and address of the user should be clearly visible
- The document must be recent and not expired
- A residential address of the customer should be present on the submitted document
- The document issuing authority must be a credible organization
To wrap it up, ID verification strikes the perfect balance between fraud prevention and meeting compliance requirements. AI-powered ID authentication enables enterprises to deliver a purposeful and secure experience to their customers as well as attaining a reputable image in the market.