ID Verification

What is ID Verification?

ID Verification is one of the critical parts of KYC (Know Your Customer), AML (Anti-Money Laundering), and CDD (Customer Due Diligence) processes. It is a procedure that allows the validation of provided personal information to confirm one’s identity. The process is based on data authentication of a person’s ID document, such as a national identity card, passport, or driving license.

Digital ID verifications are performed using technologies such as artificial intelligence (AI), machine learning, and biometric technology.

What are the regulations regarding ID verification?

Regulatory requirements regarding ID verification processes may vary by industry and location. Guidelines, regulations, and frameworks require institutions and companies to perform due diligence procedures during the onboarding process, such as thorough verification of users.

The principal regulations that set the standards for verification processes in Europe are the Anti-Money Laundering Directives (3rd, 4th, 5th, and 6th AMDL) and Electronic Identification, Authentication, and Trust Services regulation (eIDAS).

There are also national-level regulations, such as the UK’s leading regulations regarding ID verification, are The UK Bribery Act and The UK Modern Slavery Act. In the US, the standards and recommendations are set by Financial Action Task Force (FATF) and The Customer Identification Program (CIP).

What businesses need ID verification?

Depending on the type of provided services, regulatory requirements, and individual needs, there are several reasons why your business might need an ID verification service.

ID verification is a crucial part of KYC and Customer Due Diligence checks, which require businesses to identify their users and assess the risk level during the onboarding process. Moreover, for services and platforms that require their users to be over a certain age (in most cases, 18 or 21), ID verification allows users’ age accordingly.

Some of the most popular sectors and industries in need of ID verification services are:

Traditional financial institutions and fintechs
Lending platforms
Crypto trading platforms, crypto wallets
Sharing economy & Peer-to-peer (P2P) services
E-learning platforms
E-gaming & gambling
Crowdfunding & crowdlending
Dating apps and social media platforms
Forex trading
Real estate
Insurance companies

How can ID verification benefit your business?

🟢 Avoid fines and legal consequences

In the 2021 Global Enforcement Review, it was reported that AML-related penalties issued in the first half of 2020 had reached over $706 million. The sum was found to be a 56% increase compared to statistics from 2019, when the total sum reached $444 million.

ID verification of customers is one of the main steps toward compliance. Implementing robust KYC & AML procedures ensures compliance and the proper functioning of the business. On the other hand, the lack of compliance might result in fines, reputation damage, and financial losses due to fraudulent activity on the platform.

🟢 Eliminate bad actors, fraudsters, and the risk of criminal activity

As a part of the KYC and CDD process, ID verification is the first step of proper risk assessment.

The process allows eliminating the risk of fraud attempts such as identity theft, the use of forged identity documents, money laundering, and other financial- and cybercrimes.

🟢 Forget about drawn-out verification processes and onboard your customers faster.

Many still associate onboarding and verification procedures with drawn-out waiting times and endless paperwork. With the support of today’s technology, complete KYC checks can be performed within minutes. Online ID verification solutions allow the process and the documentation related to users’ personal information to be obtained, stored, and processed entirely digitally.

🟢 Enhance customer experience

Customer satisfaction is a principal factor of any business relationship. Lengthy and complicated onboarding processes and mistrust can result in the loss of potential clients early on.

Online ID verification checks can be done from anywhere, at any time. An ID document and a device with Internet access and a camera are the only requirements that customers have to meet.

Making the ID verification process smoother, faster, and safer for customers improves their onboarding experience and enhances their trust, which is crucial in strengthening your business’ position and reputation.

Technologies used in the process of ID Verification

There are multiple methods of digital ID verification. Due to strict regulations and legal requirements, it is essential to ensure the highest level of security and minimize the risk of identity theft, document forgery, and unauthorized use of identity documents, among other possible hazards. That’s why several different technologies are used to ensure that checks that are carried out are fully efficient, secure, and reliable.

Some of the most commonly used technologies in the ID verification process include:

Biometric verification examines one or more biological traits, such as facial features, fingerprints, vein patterns, or hand geometry, to authenticate identity.
Face verification is a step in the verification process that confirms the document’s ownership. During the procedure, an AI-based software analyzes the photo on the ID document and the user’s facial features to verify that the person is the rightful owner of the document.
Document verification This method works by verifying identity documents such as passports, ID cards, and driver’s licenses. This procedure entails confirming the authenticity of the document as well as authenticating the user’s personal information to validate their identification.
OCR (Optical Character Recognition) is an automated data extraction technology. The software recognizes information from handwritten and printed documents, photographs, and scanned files to convert the text into a machine-readable format that may be utilized for further digital data processing.
Database verification. The user’s data is compared to publicly available information, such as private lists, databases (i.e., Politically Exposed Persons, Sanctions lists)
Liveness detection refers to the use of technology that detects a live presence of a user in real-time. This solution is used to eliminate fraudulent attempts, such as the use of pre-recorded videos, filters, and deepfakes during the ID verification process.
Human supervision is an additional layer of security during the identity verification process. In some cases, such as video-based solutions, a specialist is present during the process to carry out all necessary steps and checks. It allows direct contact with a person undergoing verification and appropriate observance of users’ behavior and surroundings. Double-checks are another recommended form of human supervision when it comes to methods that don’t include human presence during the process.

What are the steps of an ID verification process, and how to verify documents?

D verification checks can be performed using several different methods and technologies. Depending on regulations, chosen verification methods, and validated information during the process, the steps might look slightly different. However, specific key points are the same for any ID verification process. Those steps are a staple of proper ID verification and eliminate the risk of identity theft, use of document forgery, and unauthorized transactions.

Steps of ID verification include:

Data collection. During that part of the process, the user provides required personal details, such as first and last name, date of birth, ID number, address, phone number, or any other information requested by the company.
Data authentication. During this step of ID verification, technologies like OCR are usually used to extract necessary data from the ID document. The software validates the authenticity of the data, and in the case of interview-based methods, a specialist performs an additional check.
Document verification. One of the critical points of ID verification is ensuring that a valid, real, and authentic document is used to verify the customer’s identity. The strongest methods to ensure that are:
– Real-time security features checks
– Comparison with data available in official databases consisting of government-issued templates and manuals.
Ownership validation. Technology solutions such as Face Verification are used to eliminate the risk of identity theft or unauthorized use of documents. The software confirms that the person using the document during the ID verification is the rightful owner of the document.
Additional steps. ID verification processes might differ depending on regulations and individual requirements of a business. Additional steps can be performed, such as Proof of Address check, PEP & Sanctions (and other databases).

The future of ID verification

It is safe to assume that the future of ID verification is fully-digital. Online ID verification services seem to be the answer to growing customer expectations regarding the speed of onboarding processes, the safety of data, and easily-accessible services.

The strong shift towards fully-remote services in several sectors such as finances, education, entertainment, or health, means a growing need for ID verification solutions and services worldwide. Widespread implementation of modern verification methods and services will impact the way people access and manage sensitive information, handle their finances, and perform their daily tasks and responsibilities. The rise of electronic identity documents trends and biometric technology are other indicators that show that online verification solutions are the future of the way companies onboard their clients.

How can Fully-Verified help your business?

Fully-Verified offers a wide range of ID verification & KYC solutions to meet the strictest requirements of multiple regulations worldwide and your own business needs.

Live-Verify is a live video verification solution. The process consists of a live video interview with a highly trained operator who, with the help of AI and machine learning tools, verifies a user’s identity, confirms the authenticity of the presented identity document and ensures that the person using the document is its rightful owner. The whole process is fully recorded.

Self-Verify is an automated video identity verification solution. It allows users to go through the ID verification process on their own. The whole process is recorded, and after the verification steps are finished, the operator performs a double-check as an additional layer of security.

Some of the additional KYC services offered by Fully-Verified include:

– Proof of Address checks

– PEP & Sanctions checks that cover databases from all over the world,

– Manual KYC service – a fully-customizable solution based on your individual business needs.