Why identity verification checks are critical in the digital age

In an increasingly digital world, identity verification checks are critical in ensuring someone is who they say they are.

With the growth of digital onboarding came the ability of fraudsters to adapt and target online transactions for their phishing, identity theft, and ransomware attacks. To address the advancing nature of online fraud, identity verification checks are necessary to ensure that transactions are secure and customers are genuine.

The goal of identity verification checks is to prove a person is who they say they are and that it’s a real person behind the actions. Identity verification usually takes a person’s name, date of birth, address and other key pieces of personal information and compares it to trusted data sets, such as government, credit bureaus, private facilities, utility databases & more.

Online identity verification

Online identity verification is a convenient alternative to physically taking a photo ID and manually verifying a person’s identity. Online identity verification involves a person capturing a photo of themselves and uploading it to the identity verification platform, where it is checked against a list of document-related trust factors.

What benefits do online identity verification checks provide?

Ensures compliance

When customer information is handled incorrectly, there’s a risk of breaching federal compliance regulations. Failing to verify an individual’s identity can also lead to unlawful transactions and risk significant fines or criminal prosecution.

Deters fraud and money laundering

A key benefit of online identity verification is that it deters fraud and money laundering. Complying with federal laws is key, with fines for non-compliance in the financial sector totalling $10.6 billion in 2020. An identity verification platform reduces this risk by ensuring customers are who they say they are.

Maintaining a positive reputation

An effective identity verification process helps organisations to build their reputation as trustworthy. Maintaining a good reputation is key, as customers are more likely to seek out businesses that are regarded as trustworthy. Customers also want to know that their information will be safe, and identity verification is an effective way for businesses to show that they value trust.

Avoiding chargebacks

Credit card fraud is a significant contributor to the yearly number of identity fraud cases. One of the most pressing issues is when customers fraudulently use credit cards that don’t belong to them to make online purchases and then cancel the transactions when the owner of the card finds out. This often leaves the business with the liability to pay back the money. This can become a significant cost for businesses, but it can be prevented with identity verification. Identity verification carefully verifies each customer and ensures no credit cards are used fraudulently.

Provides a faster verification process

Digital identity verification speeds up the verification process, which is necessary to keep up with the fast-evolving digital world. Customers expect to be able to sign up for a product or service and be able to use it immediately, so identity verification must have minimal interruption to the customer experience.

Improves customer experience

A good identity verification process is frictionless, meaning that organisations don’t ask customers for too much information and instead obtain it from other sources. A frictionless customer experience also helps create an effective digital workflow that eliminates the need for manual entry and paperwork, which tends to be very time-consuming. Using identity verification provides customers with a smoother onboarding process and allows them instant access to your product or service.

Methods of identity verification checks

Data verification

Data-oriented digital verification involves matching personal data such as DOB and address to trusted data sources. This process is complicated by the fact that people move houses and names change, so it’s necessary to match personal data against multiple trusted data sources.

Document verification

Document verification involves scanning government-issued identity documents to ensure the document is genuine. The most commonly used identity documents are passports, as they feature specific elements such as watermarks and fonts, which can help detect identity fraud or document tampering. Document verification ensures the authenticity of a document by comparing it to a comprehensive library of trusted documents.

Biometric Analysis

The biometric analysis involves the verification of customers by unique biological traits. Examples of biometric verification include fingerprint and face recognition. A benefit of biometric analysis is that it doesn’t require a password and provides higher security, as biometric information cannot be copied or stolen.

Multi-Factor Authentication

As the name suggests, multi-factor authentication involves a combination of at least two different authentication methods. This method requires a one-time password for each session, which is often delivered via text or email. However, biometrics can also be used. The use of multi-factor authentication is an effective way to reduce the risk of cyber attacks.

Knowledge-based Authentication

Knowledge-based authentication (KBA) involves asking customers simple security questions, which lessen the chance of a security breach. Knowledge-based authentication questions should meet the following criteria:

  1. Appropriate for a large segment of the population
  2. The answer should be something that is easily remembered
  3. The question should only have one correct answer
  4. The answer should not be easy to guess or discover through research

KBA questions can be either static or dynamic. The key difference between the two types is that a static scheme involves the users pre-selecting the questions and providing the correct answers, while in a dynamic scheme, the user has no idea which questions will be asked.

If your business is looking for online identity verification solutions, or if you would like to discuss your verification requirements in more detail to find a tailored solution for your needs, contact our sales team.




Why choose GBG?

Here at GBG, we help you onboard more genuine customers and stay compliant with fast and accurate identity verification. Regardless of your business size or industry, you can tap into powerful global verification solutions to keep bad actors out and protect your business.

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