Digital Identity

Personally identifiable information (PII) is data that can be used to verify a person online, similar to how digital identity is used today. PII includes information that is unique to one person. It can be a phone number, social security number, email address, date of birth, or even race. 

Some illustrations showing what a digital ID is are unique identifiers or factors that make up a person’s digital identity. This could be a password, username, social security number, passport number, date of birth, etc. Some of this information, such as the person’s full name, address, or birthday, can be used during the KYC process. For example, digital platforms like e-commerce sites that sell adult-only items, such as vapes, need to verify a user’s digital identity and confirm that they’re of age during the age verification process.

Digital identity is a common matter for many businesses that operate online in the sense that it works like a key for users to access their services. For example, enrolling in university courses, accessing a car-sharing platform, or even demonstrating the right to rent an apartment requires demonstrating the person’s digital identity. Otherwise, they aren’t eligible to access the remote services or items. For high-risk industries, where corruption or money laundering is more common, stricter digital identity verification measures are used to prevent fraud.

Businesses use digital identities in various ways when they need to verify users online, for example:

• Before high-risk transactions that are atypical or large (to prevent money laundering or unauthorized use of the account).
• When purchasing age-restricted goods, such as adult-only content online (like OnlyFans or alcohol on an e-comm site).
• When opening a new account on any sort of online platform (for instance, if the user wants to create a new account and activate their wallet on a crypto exchange).

The biggest benefit of digital identity verification is that it is very convenient for the user. It’s also a secure online process that saves time, eliminating the need to go to a certain location to have your documents checked. Digital identity verification is also the first step in having a proper fraud prevention system. Businesses verify their customers in order to prevent forged documents, stolen IDs, deepfakes, and other attempts to pass the verification. 

AI-powered verification software works more efficiently than a human KYC specialist, making this sort of verification a go-to method for institutions that want to scale or need to handle large transaction volumes.

AI automates the whole verification process. For example, AI-powered facial recognition algorithms are used in biometric verification to analyze a person’s unique features and patterns. This information is then compared to their data on the provided government-issued ID. The AI-enabled system is able to check if the digital identity data matches, either accepting the person or denying their access to certain services online.