Organized criminal activities yield significant returns, which the actors spend lavishly to prevent tracing. A recent study by the United Nations established that up to 5% of global GDP involves laundered assets. That is roughly 2 trillion dollars annually. There would be more laundering cases if there were no identity authentication systems. These systems have helped curb the menace of fraud and money laundering by a considerable percentage.
By ascertaining everyone transacting online uses their truthful identities, it is difficult for cybercriminals and money laundering actors to perpetuate their criminal acts unnoticed. You appreciate the power and benefits of identity-proofing in ensuring secure online transactions.
What is Identity Verification?
So, what is identity verification? It is a software-run test of your identity. Yes, it is a procedure that runs your real-time identification data through a series of accuracy tests. The system uses biometric or artificial intelligence technologies to determine the matching score between your identification information and the data in trusted databases. Establishments and individuals rely on identity verification to confirm the people they transact with are who they say they are. It is widely applied in internet-based transactions to ensure security and compliance.
Different Types of Identity Verification Techniques
When testing a customer’s identity during onboarding, you can use varied tried and tested verification methods. These are the three methods you can use to verify an identity.
1. Knowledge-Based Method
If the risk is low, you could use a traditional knowledge-based approach. This technique is simple and fast but might be inaccurate. By asking your customer for their social security number, date of birth, and address, you could get lied to and trust in the wrong information. The approach is economical and requires no complicated software.
2. Biometric Data Method
A customer’s unique identity lies in multiple aspects of their physical body. Everyone’s iris, facial, and fingerprints are unique. All these fundamental parts of your body can help businesses tell who you are. That is achievable through a process known as biometric authentication. Organizations use superior technology to capture your iris, facials, and fingerprints. These prints are then compared with those reserved in reliable databases to determine the similarity.
3. Document Verification
This method is the least accurate but less hectic for telling who someone is. You do a physical scan of a user’s government-issued documents. In other words, this authentication method is all about ensuring the data on a customer or user’s passport or driver’s license matches the information they provide.
Use Cases of Identity Verification
Identity verification has many established use cases in today’s world. E-commerce stores lead as the primary beneficiaries. Financial institutions and social media platforms are gaining significantly, too.
1. Healthcare Organizations
Healthcare organizations deal with extra-sensitive patient data that needs handling with utmost care. They must comply with all HIPAA regulations regarding privacy and safety. These organizations rely on identity verification to protect patient data and privacy. With these technologies, health facilities can determine if patients are who they claim to be. That prevents rendering services to unqualifying patients. It is an effective way to prevent fraud and data breaches in the healthcare industry.
2. Credit Unions and Banking Institutions
Financial laws require banking institutions and credit unions to protect customer data and privacy. Failure to do that leads to data breaches and can facilitate fraud and forgery. Banks need identity verification to ensure the customers they onboard are who they say they are. They avoid onboarding customers who will run money laundering and fraudulent activities.
3. E-commerce Businesses
E-commerce businesses must establish trust online to transact securely and onboard more customers. Customers hesitate to transact with e-commerce businesses that do not have established credibility. Businesses have to ensure those they transact with are to be trusted to make their online transactions secure. That is where identity verification technology comes in.
4. Fintech Companies
Another top beneficiary of identity verification technology is companies operating in the fintech industry. Facial biometrics are essential for detecting sophisticated fraudsters and protecting fintech Companies against identity theft cases. You can use 3D facial recognition technologies and 2-step face authentication to optimize your identity verification. You get to ensure that all payments happening in your fintech company are free of fraudulent activities.
5. Government Agencies
Government organizations use identity verification in analyzing and validating identification documents. Before rendering a service, they must confirm your passport or driver’s license is valid. These organizations have robust and more accurate scrutinization technologies. They ensure every document passed through validation has no signs of fraud or fake data. That is achievable by comparing the identification document with the agency’s database.
Wrapping Up
The idea behind identity verification is to streamline and improve transactions online. Businesses transact with clients they can trust, while clients avoid scams and inconveniences. Many types of identity verification methods are available. You can always reap from using top-tier identity verification methods regardless of the size and type of business you run.
