Scammers are intervening in every company to fulfill their illicit means, including money laundering and attempts to access financial accounts and actual user documents. But how will they use documents? Perhaps to look like a genuine user and sneak peek into their account for the purpose of takeover. That’s why identity verification is important in the digital landscape, as it helps genuine users be safe so that no other person can use their credentials or real documents.
This blog will help you understand a few things about document verification.
What is Identity Verification?
Identity verification confirms individual identities, specifically when signing up to get their account details or going abroad and authenticating their legal papers. It’s essential for firms as they will know that the person they interact with is real or a scammer. ID verifications secure users and businesses from scammers and are gradually becoming a part of every business in the digital landscape.
Importance of Identity Verification Service
ID verification is gaining traction, but what is the reason for this? Why are regulatory bodies not enough to tackle document theft scenarios?
- Identity Theft Resource Centre (ITRC) states that data scamming increased by 17% from 2020 to 2022.
- The Federal Trade Commission (FTC) received 1.4 million document theft reports in 2021.
- Javelin Strategy and Research stated that scammers stole more than $52 billion from Americans.
These stats are enough to portray the significance of identity verification services today, as scammers are trying every tactic to sneak into customers’ personal data. Almost every industry, from healthcare to gaming and gambling, is using identity verification services to reduce the high probability of risks and fraud.
ID verification is an essential step of KYC and AML regulations. Financial institutions and insurance companies, which are high-risk industries, use this process to secure their customers.
After COVID-19, document verification suddenly rose as it helps to provide secure user onboarding remotely, opening user accounts from another country, or borrowing funds from any financial organization.
Common Types of Validation of Identity
Usually, two types of ID verification are being used in every organization, including:
- Documentary
- Electronic
Let’s move further to understand their in-depth meanings.
- Documentary ID Verification
Customers upload images of their legal documents, including their driver’s licenses and passports. Sometimes, firms demand their selfies to authenticate them and then compare these documents with pre-recorded databases. This helps in verifying that the user is real and not fake.
- Electronic ID Verification
Users have to fill in specific information in online forms, including address, name, date of birth, passport number, and any security code. Then, companies use systems that automatically compare this information with a centralized database to verify users.
It’s complicated to say which type of ID verification is essential and credible, as firms use both from time to time.
How can Firms Differentiate Authentication from Verification?
Sometimes, solution providers don’t clear the difference between authentication and verification to their buyers, leading to the wrong usage of systems. So, let’s understand their difference with examples.
Verification:
In the verification process, systems actually confirm that the paper owner and documents are real and related to the same person whose information is stored in a database. For example, Anna George is a real person living in London and street no. 123. So, basically, in this process, all the information is verified by the owner.
Authentication:
In this process, the user is verified as to if he is real or a scammer. For example, did Anna George submit these documents? Is Robert Daisy the owner of these documents? Basically, it confirms which person is behind submitting documents.
The following are the most commonly used processes of authentication:
- Data Possession Challenges include any authentication application and One-Time Passwords (OTP), as these can counter porting attacks and SIM swaps.
- Knowledge-based challenges include passwords, security codes, owner usernames, and any secret questions, leading to maximized abandonment rates.
- Biometric Checks include all types of biometrics, including facial, iris, or fingerprint.
This difference is essential to understand in order to operate automated systems accurately. Firms use both types according to their experiences and cases.
Final Words
As the world progresses towards automated systems, they feel a need for specific verification systems that restrict imposters from entering confidential places. The right solution they fund is digital id verification, which is necessary in the finance and insurance sector to secure users and their sensitive details. Hence, firms must implement ID verification to verify users before going to the next step of their process.