Top 4 Technologies Helping Identity Proofing for Online Businesses
Online businesses face countless cases of fraud and end up losing billions of dollars every year due to it. Identity proofing, therefore, becomes an essential part of their fraud prevention process. For online businesses to protect their customer’s data and more importantly themselves, they need to implement advanced technological solutions to help detect fraud. Fortunately for them, technological advancement in the anti-fraud solutions have lent identity authentication of customers more efficiency and accuracy.
ID verification of clients and customers is carried out to check the validity of the identity information they have provided. In the traditional form, such verification are performed by banks, financial institutions and sometimes retail merchants to exclude suspicion of credit card fraud. Manual procedures of identity verification are slow and, not to mention, prone to inaccuracies.
However, with the increase in crimes of identity theft and credit card fraud, it is important that online businesses take active steps to verify if their customer is a legitimate one or is using fake or stolen credentials to purchase goods and services.
Another reason authenticating identities of customers is important is because a lot of regulatory bodies around the world have issued Know Your Customer or KYC requirements that require businesses to verify their customers. The few different forms of technologies that are being used these days for identity proofing include;
Biometric technology has been around for quite some time. It was, however, mainstreamed when Apple launched its iPhone 5S with a fingerprint scanner. Before that biometric verifications were only performed by government authorities. Nowadays nearly every smartphone contains a fingerprint scanner or a facial recognition feature, if not both.
Biometrics, however, are not just useful for protecting your phones or the data they contain. They are now being used by banks, financial services institutes and online businesses to authenticate their customers’ identities.
Since every person has unique fingerprints and facial features biometrics are a highly reliable source of client authentication. Add to this the fact that they are faster and more accurate and eliminate any possibility for fraud.
KYC service providers are increasingly making use of artificial intelligence to provide identity verification services to businesses in nearly every industry. They use AI based protocols to scan and verify a person’s identity documents. When a customer scans their ID documents for verification, the AI software uses template matching and OCR to authenticate those documents.
In addition to that, such systems also provide AML compliance solutions for the financial services sector and other businesses. By performing AML screening checks, the system can scan an individual’s name through global watchlists and identify if they are a Politically Exposed Person (PEP) or are (or have previously) involved in money laundering activities. This allows businesses to comply with worldwide AML compliance regulations.
Blockchain-based tools are the latest innovation in identity proofing techniques currently available in the market. Blockchain identity management tools allow individuals to manage multiple levels of their identities. They can store different forms of their identity documents in the identity management app, including their identity, professional and educational documents.
When the individual is asked to verify their identities digitally, all they have to do is access the information that is required by the particular business and present it for authentication, without having to reveal all their personal details. The identities stored on the blockchain are encrypted and cannot be accessed by anyone but the user.
In this case, the customer or user is in complete control of their identities and can thus use their information to verify their identities with any bank or online retailer they wish to.
Technological solutions for identity verification have made the process faster and more efficient. But most importantly, advanced tech solutions give more accuracy to the identity proofing process. Identifying and verifying customers accurately is what counts most if a business is looking to reduce levels of fraud.
Other than that, identity proofing through automated systems is also cost effective and ultimately saves a lot of costs for an online business, which is particularly important if they are a startup and looking to cut down on expenses.