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 is 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
The digital identification environment has undergone tremendous change throughout the years. Online identity services have evolved globally and in New Zealand, providing new methods for people to access and share their information.
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 electronic identity verification provider, where it is checked against a list of document-related trust factors.
What benefits do online identity verification checks provide?
Online Identity verification can help New Zealand organisations comply with regulations, such as the requirements of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act). Failure to verify an individual’s identity can also lead to unlawful transactions and risk of 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. This is especially important for companies offering financial services since it can prevent malicious schemes such as money laundering. 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 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 online identity verification is an effective way for businesses to show that they value trust.
Provides a faster verification process
Online 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
The online 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. Online 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-oriented digital verification involves matching personal data such as date of birth 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 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.
The biometric analysis involves the verification of customers by unique biological traits. An example of biometric verification include facial 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.
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.