eIDV: Electronic Identity Verification (Definition, Examples & More)

Learn what eIDV is, where and what kind of industries use this electronic identity verification method, which regulatory frameworks require the 2+2 approach, and how it helps with your company’s risk assessment.

Electronic identity verification (eIDV)

eIDV, or electronic identity verification, is the process of verifying a person’s identity using official databases and cross-checking them with personal data, such as their name, address, Social Security Number (SSN), and other details, depending on the business that’s conducting this check. This is a popular Know Your Customer (KYC) verification method, sometimes referred to as Soft KYC or simply database verification

But what’s so special about eIDV, and will it be the next big thing? We look into this verification process below. 

What is Electronic Identity Verification (eIDV)?

Electronic identity verification (eIDV) confirms a user’s identity remotely, working as both a verification and security measure in high-risk, regulated industries, such as banking or fintech, where verifying customers is mandatory for a compliant onboarding process. eIDV is an alternative KYC process for the traditional, manual in-person verification: it collects personal information and analyzes the user’s government-issued ID document. However, it’s conducted fully automatically as the user completes the process on their mobile devices. 

eIDV is typically powered by AI and plays a key role in a company’s KYC and Anti-Money Laundering (AML) compliance. Financial businesses and other regulated entities use this as a primary identity verification measure during the user’s account opening stage. eIDV is considered to be a more secure KYC measure because it is based on several key data points, providing results instantly, telling whether there’s a match, partial match, or no match with the databases that were used to check the user’s personal data. 

Who Uses the eIDV Process?

Financial firms and other industries that are regulated and high-risk (in terms of higher chances of money laundering) use eIDV to prevent fraud and comply with KYC/AML requirements

For example, eIDV is popular among:

  • Banks
  • Accountants
  • Financial advisers
  • Lawers
  • Real estate agents
  • Retailers
  • Crypto exchanges
  • Brokerage firms
  • Government agencies
  • iGaming and casinos
  • E-commerce platforms
  • Recruiters

All mentioned entities and other regulated businesses need to verify a client’s identity before establishing a business relationship, ensuring they pose no risks to their organization. For example, a company can’t accept the registration of a sanctioned person or a new customer who tried to bypass the eIDV process with a forged ID document. This aligns with the key goal of KYC compliance. 

eIDV and Compliance Requirements 

eIDV, in particular, is a compliance process, which is required for three main components: the Customer Identification Program (CIP), Customer Due Diligence (CDD), and ongoing monitoring. KYC requires verification measures, such as eIDV, while CDD measures include different verification and screening processes to maintain accurate customer risk profiles.

Infographic on eIDV depicting the databases utilized by iDenfy and the categories of verification results.

So, identity verification, or eIDV, is essential for assessing customer risks. This process can also be used as a reverification to maintain ongoing due diligence, depending on the company, its risk appetite, jurisdictional requirements, etc. Coupled with PEPs and sanctions screening (and other AML measures), eIDV is used both during the initial interaction and through ongoing monitoring.

For example, investment platforms often use eIDV with passive liveness checks, enabling users to complete verification seamlessly. This approach balances security with user convenience, ensuring a fast process without requiring users to re-enter credentials. The eIDV process runs mostly in the background, minimizing friction while ensuring a multi-layered approach to  ID verification. Part of that is why it’s so popular — it’s a compliant and efficient way to verify customers. 

Related: Customer Due Diligence Solutions — How to Build CDD Compliance?

What Type of Data is Checked During eIDV?

eIDV compares the client’s information against various databases to check for a match. There are at least two layers or sources (personal details and another database) to this KYC measure:

  1. The system asks the customer for their ID document. It can be a passport, driver’s license, ID card, sometimes, citizenship or birth certificate. 
  2. The system extracts this onboarding data and ensures that the ID document is legitimate and not altered. 
  3. The person’s information is then checked against various databases. It can be both public and private (such as the business‘ internal blocklist) databases,  for example, credit bureau records or police data.
  4. The results are provided (for example, the name matches, the address matches, and everything’s OK, and vice versa).

Depending on the industry, eIDV can include additional resources, such as proof of address (PoA) information (utility bill records, for example, such as connecting the user directly to their electricity or water service provider to cross-check data) or property ownership information (banks or mortgage lenders use this when approving loans). Additional data points like these can be added as part of the due diligence process for high-value transactions or as a way to assess AML risks. 

Infographic summarising four steps of the eIDV process.

eIDV can go further by collecting additional data and risk signals that are used to complete a company’s fraud prevention strategy. In practice, this means running background checks on the user and identifying their IP address, device fingerprints, and other behavioral biometrics. This is important, as fraudulent IPs can indicate fraud or show that the person has multiple accounts, which are often against the company’s Terms and Conditions.

So, eIDV often consists of verification and fraud prevention methods, not just cross-checking a single database to onboard the user.

Examples of How eIDV Helps Detect Fraud

Companies can identify high-risk customers by using additional fraud prevention tools alongside eIDV, such as AI-powered software. For example, crypto businesses use both ID verification and address verification to verify their users’ wallets and confirm that their address information is legitimate, not forged, and used for fraudulent transactions. In e-commerce, for instance, eIDV also helps protect genuine accounts from unauthorized charges, often resulting in chargebacks and unwanted financial losses for the business. 

In general, companies implement eIDV to:

  • Keep up-to-date records on existing KYC risk profiles (along with verifying user identities during the onboarding process).
  • Identify customers who appear on AML databases, such as international watchlists or government sanctions lists, or are flagged as politically exposed persons (PEPs).
  • Detect other fraudulent users by flagging suspicious cases (for example, a Social Security number that appears to belong to a deceased individual).

The main challenge with eIDV is the need for accurate, up-to-date information and reliable databases for cross-matching the user’s data. In this case, this process helps detect fraud effectively and improve various compliance measures, not just identity verification but also risk assessment and other processes in the bigger AML framework. 

What are the Key Methods for Conducting eIDV?

eIDV is categorized into two main types:

  • 1+1 Verification. This eIDV flow consists of two pieces of the customer’s identifiable information. For example, the company chooses to conduct the eIDV process by verifying their address (1) and date of birth (2) against a single database (such as a government agency). 
  • 2+2 Verification. This flow consists of two verification levels, as it verifies two pieces of information against two separate databases (for example, matching the user’s name and address with one source and the name and date of birth with another database).
Infographic summarising what eIDV is and the popular methods it often includes e.g. government-issued ID verification.

eIDV is a commonly used regulatory standard in the US and UK, requiring stricter customer ID verification checks. 2+2 verification serves as a more rigorous form of standard customer due diligence and is applied based on the client’s risk profile. High-risk customers undergo the 2+2 process along with other enhanced due diligence (EDD) measures, while low-risk customers can be verified using the simpler 1+1 method. 

Stacking the Right Building Blocks for eIDV

No matter which eIDV approach the company chooses, ultimately, there are three main methods for creating the verification process: document checks, biometric checks and database checks. It’s up to the business to combine its building blocks for eIDV based on its industry and jurisdictional requirements.

Here’s a more detailed breakdown:

  1. Document, or government-issued ID verification, confirms that the person’s document isn’t forged or altered. 
  2. Biometric, or selfie identity verification, scans a person’s face to confirm they are the rightful owner of the document by matching their biometric data with the information on the document.
  3. Database verification cross-references the person’s information with official, reputable databases to ensure that the data matches and is valid.

For example, the user needs to go through a stricter checkup process, which will require them to confirm their identity using all of these methods in one KYC, or eIDV, process.

Let’s say the user is from the US and is completing the eIDV process on a fintech platform:

➡️ The company first asks them to capture a photo of their passport using their mobile device, followed by instructions to take a selfie for biometric verification.

➡️ The platform collects personal information and requests the user’s SSN, which is commonly used in eIDV as a key identifier in the 2+2 verification approach

➡️ The eIDV software then compares the SSN and the user’s full name with additional data, such as their date of birth or home address, to verify matches across databases like the Social Security Administration or the US Identity Graph.

As a fintech, the platform must meet legal requirements, including CIP and CDD obligations. So, simply cross-checking the SSN with one database isn’t enough, and all three eIDV methods are required for a compliant verification flow. 

iDenfy’s Approach to eIDV

iDenfy offers all three key ways that complete the eIDV process (document, selfie and database), including other KYC/AML verification measures required for the 2+2 approach, such as:

  • Address Verification (PoA check with direct utility bill cross-referencing or AI-powered Utility Bill Verification). 
  • AML Screening (PEPs, sanctions, global watchlists and adverse media).
  • Risk Assessment (both for KYC and KYB clients, providing risk scores from low to high). 
  • Bank Verification (to cross-check identity details with bank account ownership data).
  • & more fraud prevention measures (to assess risk signals, such as Phone Verification or Proxy Detection).

Contact us and get a hands-on experience of eIDV for free.

Frequently asked questions

1

How Can I Make eIDV Effective?

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Inaccurate data and low-coverage databases can be damaging, especially when trying to compare data for the eIDV process. While inconsistencies can be fixed during extra manual KYC reviews by your internal compliance team, it’s best to choose a third-party eIDV service provider that’s reputable and can help you build a fully automated, accurate, and, more importantly, diverse eIDV process with various sources for eIDV verification. 

2

What are the Benefits of the eIDV Process?

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3

What if the Customer Doesn’t Want to Provide their SSN?

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4

What is an Example of 2+2 Verification?

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