As per the Digital Identity Guidelines published by NIST, a US agency, Identity Proofing is verifying the claimed identity of an applicant by authenticating the identity source documents provided by the applicant.
Identity Proofing usually focuses on use cases in which an organization is interacting with someone for the first time. Examples can be account opening, registration, application or enrolment.
In a lot of organizations, digital transformation has been accelerated by the COVID-19 pandemic, which had a huge impact in renewing focus on the digital onboarding process as an important requirement for new business opportunities.
Why is Identity Proofing Necessary?
- The global Covid -19 pandemic has accelerated digital transformation at a massive scale for many industries – but unfortunately, this is accompanied by a drastic increase in fraud. Financial crime is estimated by the UN at $800 billion to $2 trillion worldwide per year.
- Cyber fraud is now one of the biggest threats to our economy and the latest predictions say that the damage caused by internet fraud will amount to $6 trillion in 2021. Based on a report by PwC, within the first week of lockdown, organization reported a 40 percent increase in attempted cyber attacks.
- Customer’s expectations have changed over the last few years. They now expect services to be available within minutes not days
- The traditionally used Knowledge based authentication (KBA) processes cause unnecessary friction during the account opening process. Organizations no longer want the customer experience disadvantages of KBA and are looking for more modern identity verification modalities.
How Identity Proofing works?
In its Digital Identity guidelines, US agency NIST has outlined the following steps in the Identity Proofing process –
- Resolution – Collecting identity evidence from the applicant such as driver’s license, passport etc. Additional details collected are Name, address, date of birth, email and phone number
- Validation – The data on the identity evidence provided by the applicant is now validated and cross verified with the issuing authority. The image of the passport and driving license are checked to determine there are no alterations, and that the identification numbers follow standard format.
- Verification – Applicants must upload a selfie which is matched with the photo on the license and passport. They also get an enrolment code on their validated phone number that needs to be shared with the Financial Institution which confirms that the user is in possession of the validated phone number.
Source – NIST 800-63-A: Enrollment and Identity Proofing
GIEOM’s Identity Proofing solution can automatically perform the above steps in a matter of few minutes. It can gather the user information, verify if their identity matches with their actual identity and approve their registration request.
In turn the user just needs to take a picture of their ID and a short selfie video for facial match and liveness detection. The data from ID gets auto populated in the online application thereby reducing the time required to fill the application form.
Liveness detection functionality can identify a fake representation from a real live person. The ingenious gesture detection algorithms can generate combination gestures for eye blink, head turn at a randomized time interval that is hard to spoof.
All these features contribute to a smooth customer experience and deter identity fraud from happening.
Benefits of Identity Proofing
- Meet the strict legal requirement from regulators and national Anti-Money Laundering (AML) laws.
- Reduce abandonment rate and improve the conversion rate
- Secure storage of customer data with end-to-end encryption
- Simple to use for customers and verification is done in just few minutes
- No additional hardware requirement. PWA enabled.
- Plug and Play solution that can seamlessly be integrated into bank’s processes across multiple channels.
Contactless Onboarding using the process of Identity proofing is the new and safest norm. Organizations need to ensure that their offerings are in line with these changes. Financial Institutions that can provide end to end digital onboarding solution for account opening, loan application and financial product sign up will be most likely to remain competitive and grow revenue.