How does identity verification work?
Keesing has immersed itself in identity and banknote verification for more than a century. We have an immense knowledge of identity verification practices, and we continuously use this information to help you protect your business. Within this blog post, we are going to discuss what identity verification is, why it is important and how to verify someone’s identity. Ready? Let’s dive right in.
What is identity verification?
In short, identity verification is establishing someone’s true identity. When a person shows their identification, by revealing their ID or passport for example, we want to establish the authenticity of this document. This verification tells us whether the presented identity document matches with the proclaimed identity of the person. This enables organizations to trace back the person in question in case of fraudulent activities. To verify the authenticity of an ID or a passport, documents are scanned and assessed based on their unique characteristics. A single identification document can contain hundreds of reference points that can all be checked.
Why do we need identity verification?
Establishing someone’s identity is needed for streamlined customer due diligence (CDD) and know your customer (KYC) processes. CDD is of great importance for financial institutions and organisations that handle a large number of daily transactions. Fraudsters can use fake identification documents to intercept transactions. That is why hard measures regarding identity verification, customer risk assessment and customer monitoring are more important now than ever before.
Governments around the world set up various laws and regulations in order to regulate the grants of credit or the possibility to open an account by banks or financial institutions. Anti money laundering (AML) refers to these rules. It therefore is advised to use an identity verification service that allows institutions to securely and reliably verify the authenticity of an individual’s ID document.
How do we verify someone’s identity?
Establishing someone’s identity can be done in several ways. The most common is when an individual presents his or her identification in a store, government agency or at work. In these occasions, an employee examines if the photo and ID information corresponds with the person he/she sees in front of them. Overall, these situations involve a low degree of risk. Click here to learn more about face-to-face identity verification.
In high customer risk situations, on-the-spot or digital identity verification is mandatory. KYC software is being used in order to determine the identity of the individual in question. This ID verification service allows the company or institution to scan someone’s identification and use an ID reference database to conclude whether the document is authentic.
A more digital approach is used quite often in the tech, financial or gaming industries. A digital copy of an ID or passport is made by the user and sent over for verification. This digital copy is then checked by an ID reference database. To verify that the digital copy indeed belongs to the person who sent it over in the first place, a liveliness detection is conducted as well. This liveliness detection, also known as face ID security, asks the person to make a recording of his or her face. The facial reference points will then be matched with the verified identification document. Learn more about remote identity verification.
What identity verification solutions are there?
In order to determine the best identity verification solution, we first need to look at the problem at hand.
Quite often, identity verification is needed as an AML solution. Financial institutions or banks need to meet the compliance mandates and laws set by governments to prevent the laundering of illegally obtained money. Looking for a solution which meets all AML mandates and creates a compliance report for each ID check? Then click here to learn more about AuthentiScan.
KYC and CDD
KYC, often referred to as CDD, is of high importance when organisations are obligated to investigate potential customers before doing business. This KYC process is mostly applicable within the financial sector and goes hand in hand with AML mandates. A potential customers’ identification is needed to establish his or her identity. Based on the level of risk, your organisation can determine whether the person in question will be accepted as a client. Read all about Keesing’s KYC solution here.
Besides digital solutions, it is of course always possible to train your staff to verify ID documents and prevent fraud themselves. Benefits of staff training is that ID documents can immediately be verified and immediate action can be taken in case of fraudulent attempts. Take a look at what on-the-spot ID training modules can do for your staff and organization.