Automated Identity Verification: A General Overview
The advent of this digital age has given rise to an increase in online services to cater to the teeming internet users. This is owed to the simplicity and convenience that online services offer in contrast to the traditional options. For instance, it is easier to shop and make payments online than to go to physical locations for the same purpose. As such, the number of people accessing various online services continues to spike.
However, one primary concern in this digital age is the protection and security against possible fraud, which is why identity verification is essential. Although this concept has existed for many years, it used to be achieved using traditional practices, which can be monotonous and time-consuming.
There is now a change in the narrative with the emergence of automated identity verification, which is believed to improve the traditional model significantly.
What Is Automated Identity Verification?
Automated identity verification is a process that enables online businesses to verify and validate their user’s identity. This can be achieved using machine learning, algorithms, or data sources.
It is noteworthy that identity verification is vital across different stages of a customer’s journey with an online business. These are:
- Onboarding and Sign up: When new users register on a website, app, or platform.
- Transactions: This is to ensure that payment information is representative of the right person. This can be payment for a purchase, withdrawal, or deposit.
- Logging in: This ensures that the right person is accessing their account. Identification becomes authentication to confirm who is online using the services of an online business.
How Automated Identity Verification Works
Often, automated identity verification employs sophisticated technology, thereby harnessing biometrics, artificial intelligence (AI), and machine learning to advance the confirmation of users’ identities.
- Data Collection
Users usually provide their personal information, which can be via online forms or uploads. The documents can include a passport or driver’s license scanned or snapped by a camera.
- Extract
The automated identity system will extract important information from the document. This can be name, address, phone number, date of birth, identification number, etc.
- Data Validation And Authentication
Tools like AI algorithms analyze and verify the information and store it as data to track and check for authenticity. AI and machine learning can be used to cross-reference the document’s details with government-issued records and other sources.
- Biometric Verification
The system can be used for facial recognition to match live images and fingerprints on the identification document. This is to ensure that the provider of the paper is the owner of the ID and not someone else.
Advantages Of Automated Identity Verification
Enhances Security And Fraud Protection
An automated identity verification system is more effective in detecting and preventing fraud. It uses various pattern recognition and data sources to identify suspicious access and behavior to protect businesses and their customers from possible identity theft or scams.
Improved Customer Experience
Verifying users’ identities can be laborious when using the traditional verification method. But automated identity verification makes the whole documentation and validation process fast.
Regulatory Compliance
Businesses must ensure their users’ data and privacy, which aligns with KYC and AML rules and regulations. In this light, automated identity verification ensures businesses’ compliance to keep user data efficient and up-to-date.
Types Of Automated Identity Verification Tools
Biometric Verification
Biometric verification is developed to be foolproof. This involves a fingerprint scan or face ID check. But, it should be noted that biometrics is more effective for authentication than identification. This can be used to sign up or sign into a platform, which is quick and easy.
However, businesses may need to convince customers to use this feature because some people may find it stressful to use a camera to capture their face or fingerprint scanners.
ID Selfie Video Verification
The automated software scans your ID and takes a photo or video of you. It compares the data to those in official government databases and delivers positive or negative findings.
This is no simple task. This type of automated verification software must scan across a global network of document verification providers, which might take some time.
But there is a drawback to this approach. The customer must first locate the appropriate documents and wait for the verification procedure to be finished, not to mention any potential technological issues. There can also be the case of stolen ID documents and tech-savvy criminals.
Behaviour Analysis
You won’t likely be able to identify someone by observing how they use your service or by precisely analyzing how they behave on your website. However, behavioral analysis is becoming more and more helpful in removing fraudulent users, particularly bots and other automated software.
You can determine if a person appears real or not by looking at how they interact with your online website or app. For instance, it can be suspicious if someone completes a 3-minute onboarding procedure in just 5 seconds.
Most behavior analysis in fraud prevention is carried out through velocity checks, which examine user behaviors over a predetermined period.
How Peppa Helps With Automated Identity Verification
As a full-stack digital solution, Peppa offers KYC services to:
- Authenticate users log in
- Score customers ss low, medium, or high-risk
- Analyze user behavior to flag suspicious activities
- Perform pre-KYC checks to save costs and resources
Conclusion
Automated identity verification is important to every online business as it helps them to track, analyze, and develop best practices for the activities of their customers. From biometrics to behavioral analysis, this identification system ensures absolute compliance with KYC/AML requirements.
