You may have undergone some sort of user verification before you open an online account with a business. This is important because corporate organisations must verify the identity of their end-user in order to protect other consumers and comply with regulatory obligations. The process is usually called Know Your Customer (KYC) where the customer’s authentic ID documents are taken into account to carry out identity verification against them.
The purpose of identity verification is to guarantee if the onboarding user who wishes to open an account is actually who he claims to be and not any other identity thief trying to bypass the system. Apart from verifying identity documents, it can also be performed using biometric data of the end-users such as their fingerprint patterns and facial features. Biometric authentication practices have been well-received throughout the globe because of the level of convenience and security they provide in customer onboarding procedures.
Why is Identity Verification so Significant?
Identity verification is essential for every growing business these days. This is because identity theft is on the rise with cybercriminals using sophisticated tools to perform synthetic ID and impersonation fraud. These often lead to account takeovers and even data breaches that could take a heavy toll on enterprises and startups alike. Lack of proper means to verify user identity can expose the business to financial crime and unwanted customers.
With a robust identity verification solution in place, companies can reduce the burden of manually verifying each customer. And will be able to combat digital fraud better. It simultaneously paves way for better KYC and Anti Money Laundering (AML) standards. That are the cornerstone of every streamlined business operation. Staying compliant with these regulations allows business entities to earn a respectable place in the market. And in the eyes of their potential and existing customers.
Is it possible to do all this online?
Today, corporate entities are moving from old-school methods to technologically sound practices. Identity verification of business clients is performed using state-of-the-art digital KYC solutions that are powered with artificial intelligence models. These smart validation systems are powered with biometric verification and two-factor authentication tools that provide an added layer of security. One big advantage of online identity verification is that apart from verifying the user identity, they first check ID documents for possible modifications that make sure they are authentic and original.
Intelligent identity verification solutions reduce the false positive rate. And filter out necessary details that help enterprises make informed decisions during the customer onboarding process. They also offer convenience for end-users since all they need to do is upload a photo of their document along with their face. The solution performs the rest of the process by itself
Why Manual Identity Verification is Not an Option?
Customer-centric service is one thing that can make or break a business’ reputation and client base. Today, customers prefer to use mobile application that are easy to understand, intuitive and built around their needs. Rather than one that does not address their concerns and is hard to get. The same goes for a business and the type of service it delivers and in what way.
Customer onboarding procedures have evolved. From in-person interactions where customers need to bring their ID documents to the company premises to open accounts. This is not cost-efficient for both the business and for customers. Moreover, the fact that manual verification of customers comprises a fair degree of human error makes it question its authenticity. That is why digital identity verification has become the need of the hour for seamless and remote customer onboarding.
Use Cases of Identity Verification Solutions
Identity verification services play a crucial role in making secure user onboarding possible.They are part of a wide range of industries, listed below:
Banks are the number one consumer of customer identity verification services. Since they need to ensure KYC compliance through the organization. Insurance and investment firms also need to verify their customers before they associate ties with them. Other entities like mortgage/brokerage houses, Non-banking Financial Institutes (NBFIs), and companies providing mutual fund services are included.
Hospitals and healthcare centers need to make sure if patients are legitimate and eligible for the treatment. POM sellers, pharmacies, and health insurance providers can use identity verification solutions to prevent medical ID theft. That is a growing concern for the industry.
Financial technology has been emerging and so are the businesses surrounding them. Payment solutions like PayPal and Payoneer, Virtual Asset Service Providers (VASPs), and cryptocurrency providers are adopting digital identity verification for a streamlined and secure user experience.
To sum up, digital identity verification uses AI-based models to verify customer identity in real-time. Over a remote channel allowing corporate entities to prevent identity theft instances and data breaches.