In a growing interconnected digital economy, identity verification of an individual’s real-world identity against their digital one has become ever critical in fraud detection. The ability to do this quickly and to comply with the regulations and ever-stricter AML policies has become crucial for business success.
The heart of the digital identity scheme is essentially a secure method of being able to authenticate and verify the identity of the person. Today our physical and digital identities are more and more intertwined. Every person is unique with their specific fingerprints, facial traits, and other biometrics. Typically, identity verification takes place when a person produces his ID or KYC document during an onboarding or re-verification process.
There are various ways by which an individual’s identity can be verified digitally.
Identity verification has always been the focus for Financial Institutes and other businesses that need to comply with the KYC norms of Regulatory authorities. In the past decade we have seen an increase in the fraud and identity impersonation cases which has made FinTech and RegTech companies to innovate and deploy a robust and a spoof proof identity proofing solutions using the state-of-the-art Artificial Intelligence (AI) and Machine Learning (ML) algorithms.
During these times when physical interactions between the customers and the Financial Institutes are limited, digital channels are the only options for businesses to continue their operations especially for banks.
According to a Survey conducted in the US in 2019-2020 with more than 100 responses from Financial Institutes.
Not only do 68% of the respondents say that Digitization of their account opening process is an active initiative at their institutions, 35% say it is their top priority.
There are broadly 3 categories of Financial Institutions in Customer Digital Account Opening Transformation.
The Early Adopters are the financial institutions who have embraced Digital Account opening and have seen 60% increase in their volumes and 51% reduction in fraud and 80% reduction in cost of opening an account.
The Early Majority are the financial institutes that have begun their digital transformation journey and have high fraud cases and comparatively lower volumes than the early adopters.
The Late Majority are the financial institutions that have not yet started their digital transformation journey of digital account opening and have the highest fraud cases and the highest turn-around-time for account opening.
Understanding the role of digital identity verification in any organization is the key to start your digital identity proofing or verification journey. Organizations of all types including BFSI, Government and Defense, Healthcare & Life Sciences, Retail and eCommerce, IT, Hospitality, Education, Travel can use identity verification to onboard a customer, help mitigate fraud, and comply with the regulations.
Some of the common scenarios for implementing digital identity verification are:
Selecting the right Identity Verification Solution for your organization to make sure whether a vendor can deliver document- centric identity verification solution as per your business requirement.
The process for document-centric identity verification is simple and secure:
Digital Identity Verification Solution vendor offering a hub approach, which enables businesses to access different verification options via single API integration. The one-to-many implementation approach helps in higher pass rates.
Combining these key elements in a secure and spoof proof automated ID verification process can drive businesses with high efficiencies, reducing the cost of customer onboarding, minimize fraud and increase sales volumes by opening channels for businesses to serve their customers.