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Identity verification plays a significant role in the banking and financial sector. It helps the companies build trust between the business and clients while ensuring secure transactions.
Identity impacts many areas of banking such as account closures and openings, credit card applications, high-risk transactions, and many more for which they need to verify the client’s identity. Thus, it is crucial for the banks to pick an identity verification service that prevents fraud while ensuring a better customer experience and also satisfying compliance and regulations.
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Methods of ID Verification
There are several methods to do Identity verification for banks and other financial institutions. They are as under:
- ID Document Verification: It checks that the identity document such as passport, driver’s license, government ID is legitimate.
- Liveness Detection: It authenticates the selfie by checking the spoofing attacks including photos of photos, or face masks.
- Biometric Verification: It uses the selfie of the client to check that who has presented the ID is actually the one whose picture is on the Identity document.
- Knowledge-Based Authentication: It asks “out of wallet” questions considering the information present in the personal credit file of the applicant.
- One-Time Passcode Verification: It transmits a passcode via email or SMS that can be used only once and that is how it verifies the identity of the customer.
- Trusted Identity Network: It leverages the existing credentials of the applicant with the other provider to approve a verified identity as well as reduce friction during the onboarding process and account opening.
- Database Methods: It leverages data from offline databases, social media, and other sources to authenticate the applicant’s identity.
How Do Identity Verification Services Work?
The in-built camera of the hand-held device or mobile phone captures the photograph of an applicant’s ID. AI and the latest authenticity algorithms are used that analyze the image and create an authenticity score for determining whether the document provided by the applicant is fake or genuine.
Benefits of ID verification
Clients’ interactions now span online, physical, mobile, and social channels. Banks require those identity verification services that enable strong and efficient identity verification across all encounters whether it is account creation, account recovery, or high-risk transactions.
Now many financial institutions including banks are shifting towards a biometrics identity verification system to authenticate the identity of their clients. Many people prefer biometric and document checks when they open a bank account for better identity theft protection.
Unlike other approaches to managing identities, digital identity verification is not just secure, but also scalable, intuitive as well as device-agnostic. Here is how it helps:
Improve the End-User Experience
Digital Identity verification is secure, transparent, and faster ensuring a good customer experience. Besides submitting copies of the documents and visiting the banks, again and again, clients can now open their accounts anytime, anywhere. Moreover, an identity verification that is not linked to any particular device gives greater flexibility to their clients. For instance, if their mobile phone is stolen, they can easily prove that they are the same customer from another device.
Reduce Fraud
Identity authentication not only checks who the client is but it goes a step further. It checks whether they are the ones who they claim they are. This is how it ensures that the client is genuine and is not a threat to the company. Moreover, unlike the database checks, passwords, usernames can not be stolen and are difficult to hack. Thus, they help in preventing identity theft.
Drive Automation and the Efficiency
ID verifications systems have automated the process that used to require manual input. So, who would deny a technology that automates your company’s operations? Surely no one. Besides automation, they run identity checks quickly and prevent the banks or any other financial institutions from any kind of organized crimes or synthetic identity fraud. With advanced ID verification systems, banks can now authenticate any customer’s identity by matching the picture provided on the identity document with their selfie. And in the future moment of verification, banks could maintain the assurance of a client’s identity through re-validating their biometrics.
Final Thoughts
Identity verification enables the banks to authenticate the identity of a client in real-time whether they are remote or in-branch. For banks, an identity verification service came as a ray of hope. It makes the onboarding process and bank account creation faster while preventing the company from all types of fraudulent activities and also limiting the abandonment rates of online and digital banking channels
