Identity checks are essential in modern times for any business. Not only do they help you determine if the information provided to you by your clients or customers is legit or it relates to a real person but also ensure that your prospective clients are not engaged in any fraud activities. Additionally, you avoid hefty fines for not complying with KYC and AML directives. If you want to know more about identity checks, here is the complete guide for you.
For those who don’t know, identity checks are employed by a business to verify the identity of customers. They play a significant role in helping businesses build trustworthy relationships with their customers, improve their experience, and protect themselves from frauds. Additionally, online businesses are required by law to authenticate their customers’ identities and comply with AML (Anti Money Laundering) and KYC (Know Your Customer) directives.
In this post, we will learn about different types of identity checks and find out how to balance speed and security when deploying an identity verification solution for onboarding. However, before that, let’s take a quick look at some significant benefits of identity checks.
Why Identity Verification Should be Essential Part of Onboarding Process
According to Statista, the identity verification market is expected to reach 18.12 billion U.S. dollars by 2027. It’s primary reason is that more and more businesses are implementing identity checks to keep the risks of online identity fraud at bay.
Some key benefits of identity verification include:
Prevent Frauds & Increase Profitability
Identity verification helps you counter the risk of identity fraud and money laundering when onboarding. With proper verification, you rest assured that you have genuine customers who are not involved in any illegal activities. When you accept legit customers, you naturally gain more profit.
When you identify your customers and assess the risk of illegal activities, you avoid costly fines. Don’t forget that, not complying with KYC and AML regulation can cause huge penalties. In 2019, Standard Chartered was fined $1.1 billion by U.K. and U.S. authorities for improper money-laundering controls.
Improve Customer Experience
Today, consumers expect to have excellent customer experience from businesses they buy or take service from. According to a survey, about 74% of people want same-day access when opening an online bank account. To provide such great experience, businesses must be equipped with advanced identity verification solutions to validate their customers’ identity quickly.
Types of Identity Checks
Depending on your business’ nature, you can employ different types of identity checks. Some of the primary ones include:
Identity Verification (IDV)
IDV or identity verification verifies that an identity provided by a customer actually exists and matches records. However, it does not designate whether or not that identity is authentic or a person is who they say they are.
Even if the identity-related information provided to you is matching with a record, it does not mean that an individual is genuine. Without proper validation, it’s difficult to say if the data provided to you is legit. Identity validation adds an extra layer to identity verification by checking and proving the validity of identity information provided to you.
Verification of Documents
This process examines, verifies, and authenticates various types of I.D.s to verify legitimacy. The document verification process is also essential for ensuring that I.D.s are not altered or forged.
Authentication of Identity
Authentication is the process of identifying a user’s identity. The process verifies if the person is the same who they say they are. Authentication often relies on the data that is not easy to produce or change. In short, in the authentication process, a customer’s identity is qualified against something that only a customer should know or have.
KBA or Knowledge-based authentication is a way of validation that seeks to confirm the identity of an individual accessing a service — for example, asking a question that supposedly only that person knows. For example, favorite singers or sports.
Two-factor authentication, also known as 2FA, is an authentication process, which combines two different factors:
- Something an individual knows.
- Something an individual has or is.
In this type of verification, a person is asked to provide knowledge such as an alphanumeric secret and possession to verify them. An excellent example of 2FA is withdrawing money from an ATM, using an ATM card (something the user has), and a PIN (something the user knows).
Biometric authentication is used to make two-factor authentication more effective. This technique relies on unique human characteristics such as the face, voice, fingerprint, and eye of an individual to verify who they are.
A biometric authentication system compares biometric data with the data sorted in a database. If both samples match, authentication is confirmed.
Generally, this type of authentication is used to manage access to digital and physical resources such as computing devices or office building. So these are a few identity checks, now let’s find out how to create a fast yet secure onboarding process. So these are a few identity checks, now let’s find out how to create a fast yet secure onboarding process.
Creating Fast Yet Secured Onboarding Process
As we mentioned above, people are nowadays looking for better customer experience; you must look for an identity verification solution that speeds up the verification process and onboarding.
Thankfully, there are some identity verification providers available in the market that understand the needs of businesses; therefore, provide identity verification solutions that allow them to conduct identity verification quickly without compromising on the quality.
iDenfy is a Lithuania based identity verification provider that turns a customer’s device into a face recognition and I.D. scanning system so that verification can be conducted in no minute. Our identity verification system is A.I. and machine learning-enabled that minimizes the risk of errors to a great extent. So if you’re looking for fast yet secured onboarding, you can rely on iDenfy.
Every year, we stop over two thousand fraudulent activities across the globe with their advanced I.D. verification solution. With our quick yet secured solution, businesses can save a lot of budget on onboarding new users. If you want to know more about their services, you can visit their website or book a meeting.