As the world has moved online, the need for identity verification has increased. Businesses need to know about their customers, wherever they are in the world. But how can they do that if there is a distance between them? The answer is online identity verification. 

Verifying identity is essential for many companies operating online, from banking to education. It is required by law and supported by legal frameworks almost everywhere in the world. 

But what does verifying identity exactly mean? It is a necessary process that checks users’ personal information based on their documents and other provided data. The goal here is to make sure that the person is who they claim to be and that no identity theft is taking place. When the procedure is completed, the company has all the essential details about a particular client that allows them to conduct business together further. That helps combat fraud and eliminate the potential fake identities of customers.

Verifying customer identities plays a significant role in many institutions, especially financial ones. Identity verification has been in place for a long time. It started in companies operating in a physical, face-to-face context, such as banks. As many brands moved online, the identification procedure did the same. It is a safe, quick, and convenient process that allows thousands of companies and clients to interact successfully with each other.

The process is essential for both clients and customers as it secures all kinds of transactions made online and offline. This article explains different ways of verifying identity and why you might need it.

Why do I need to verify my identity?

For clients, identity verification is crucial because it allows them to continue with their business without hassle or waste of time. As the world continues to digitalize and companies adapt their ways, verifying the identity of customers becomes an essential part of starting any online collaboration.

Identity verification is crucial for securing safe and fraud-free relations. Verifying yourself using secure AI methods saves you from worrying about your safety and the data you upload online. However, with many businesses operating purely online, the chances of fraud are still high. That is why all verification methods must be done to ensure safety and compliance with regulations. 

The clients need to trust companies whose services they use, and a remarkable customer experience is essential for this. That is why there is a need for a fast-operating process. 

There is also a demand for easy-to-understand and intuitive procedures which make the process run smoothly. That is why identity verification is vital and suitable for them.

Why do companies need to verify customers' identities online?

Verifying users’ identities protects businesses from fraudsters and ensures their user base is genuine. Moving operations online requires a secure environment for both the client and the company.

Benefits of verifying customers' identity

It Maintains Reputation

Trust, especially in businesses, is essential. If a business won’t meet its client’s needs, there is always a risk of losing them. Online companies are vulnerable to data theft and the possibility of fraud. Companies can’t risk being subject to regulatory fines and non-compliance with legal norms. For this reason, most businesses improve their KYC and implement methods that securely verify identities.

It Improves Customer Experience

It is essential to ensure that customers feel protected while verifying their identity. Modern technologies used in that process can provide security and improve customers’ satisfaction with the procedure. Another reason why identity verification is a good solution for clients is that it saves a lot of time; it usually only takes a few minutes. The process can take place anytime, from anywhere in the world. All that is required from users to be able to undergo an online verification is a device with a camera (for example, a smartphone, laptop, or a tablet) and internet access.

It Saves Cost and Expenses

Digitizing and improving online processes saves much money and reduces operational costs for companies. However, banks and brands worldwide may face losses worth billions due to inefficient KYC procedures. In addition, there are recurrent cases of fraud and identity theft, which could lead to substantial financial losses. To avoid those things, verifying identity is crucial as it allows knowing everything about customers. Thanks to this, both economic losses and possible fines resulting from the wrong implementation of KYC procedures can be avoided.

It Eliminates The Risk of Fraud and Money Laundering

With most services being available online, the risk of fraud attempts and money laundering is enormous and still growing. It is dangerous for both clients and companies since they want to ensure that their money and data are safe. Businesses need to work on their KYC process and adopt ways of verifying identity online. With those procedures, brands are much safer and can ensure that they are not put at risk of fraud and money laundering.

Different Methods of Verifying Identity

Knowledge-Based Authentication

KBA is one of the oldest and most common methods to verify identities online. This type of authentication requires answering security questions. The questions are generally easy to answer, but they can sometimes be more challenging, depending on the site’s security measures. 

Another way to use knowledge-based authentication is by asking questions that users are required to answer within a given time limit. Generally, the questions are based on the personal information of a client. Even though clients find this method easy and quick, it has its disadvantages. The answers to questions might be easy to guess or know to other people, posing a security risk.

Two-Factor Authentication

This method involves gaining information from two or more factors relating to the clients. For example, after entering a username and password, they must enter codes sent to their email address or phone number to verify themselves. This way, an additional security layer is added to the client’s account. Two-factor authentication is especially helpful when creating online accounts and updating passwords.

Database methods

Database ID methods obtain data from diverse sources to verify a client’s identity card or other documents. The main problem with this kind of verification is that sites cannot tell if the data has been stolen in the first place. 

Another drawback is that some people might be uncomfortable with how that method works since personal information from social media and other publicly available accounts can be taken and used.

Zero-Knowledge Proof

That verification method uses cryptography to prove the truth about something without revealing personal information and helps avoid data leakage. This method provides a lot of anonymity; it is based on companies’ available methodology for authentication. The drawback of this procedure is that it is expensive and not readily available to most companies.

Biometric Verification

Companies use this verification method to identify people based on their physical appearances and traits. The most common biometric methods are face verification, voice recognition, fingerprints, and retina scanning. Facial verification compares the user’s face with the photo of the document owner. This process uses the most modern AI solutions and is fully automated, so it’s easy to detect potential fraud attempts. Face verification is convenient and reliable because clients don’t need to remember passwords and security details or answer questions. 

Like most verification methods, this one can also be cheated. To make sure that everything is correct, it is essential to use the services of the right providers who use modern technologies and qualified operators.

Online Identity Verification

It is one of the safest methods of verifying the customer’s identity. Identity verification requires ways to work out if national, government-issued identity documents match client details. It is a method based on artificial intelligence, often human-assisted. All that’s needed for that process is a mobile device and an internet connection. This method ensures that the person that wants to verify themself is who they are claiming to be. Due to that, creating false identities, identity theft, and other fraud attempts can be prevented.

Requirements for Verifying Identity

Various verification methods can not only confirm someone’s identity but also validate that the person’s documents are up-to-date and legitimate. Only government-issued documents can be accepted, which minimizes the risk of fraud. 

Primary documents that can be used in the identity verification process are:

  • ID Card
  • Driver’s License
  • Passport

Besides an identity document, to complete the verification process, clients need a mobile device or a computer with a camera and an Internet connection.

In addition to checking standard documents, it is possible to verify the address of residence (a proof of address document is required for this) and whether the user is not on a sanctions list or is not a politically exposed person (PEP).

How can Fully-Verified help?

In a nutshell, every financial institution or company focused on cooperation with clients is exposed to the risks customers can bring. Using an identity verification process is crucial, so businesses will not be prone to fraud. To improve security, it is worth choosing an option of verifying identity according to risk, speed, and regulations level. That also increases the level of accuracy of the entire process. To be sure that the procedure will be safe and correct, it is necessary to select the right service provider. 

At Fully-Verified, we are set on a mission to provide secure identity verification solutions to businesses. We offer verification systems with high-security standards, ensuring good user experience and quick onboarding times. 

Our clients can choose from various services, such as:

  • Live-Verify: The verification occurs via live video call. A trained verification specialist guides the user through the whole process and approves the entire procedure.
  • Self-Verify: An automated process through which the user goes entirely independently. The verification is recorded, automated checks are made on the document, and the process is backed by trained specialists.

Moreover, depending on the client’s needs and the regulations they need to follow, it is possible to customize the process, which allows the addition of additional steps and controls, such as PEP and sanctions verification or proof of address verification.

We use new technology-based verification methods, including face verification and artificial intelligence, as well as OCR technology that obtains, analyzes, and validates data on the document. Our main goal is to comply with any KYC needs that our customers have and provide a smooth and user-friendly identity verification process.

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Fully-Verified was created as answer to its founders collectively losing over $150 000 to various types of fraud in their eCommerce businesses.