Digital identity verification and document verification for enhanced KYC checks

Signing up new financial service customers online or via mobile requires a multi-layered approach that integrates best-in-class identity verification and authentication solutions. Protect your business and customers from fraud, identity theft and fines for non-compliance of Anti-Money Laundering (AML) and Know Your Customer (KYC) rules by ensuring the highest security and compliance processes are in place.

Consumers want to sign up for your service on their mobile devices whenever and wherever they are. But what if they have to prove their identity by visiting a physical location to present identity documents in person? You can assume a significant portion of consumers will abandon the process, resulting in another “soft decline.”

According to Jim DeBelloa, CEO of Mitek, he estimates such soft declines account for about 20% of failed enrollments. That is a significant hit on customer acquisition. On the other hand, compliance failure or online fraud is costly and proper business safeguards mean you must have steps in place to protect your business.

So, what are you going to do? How can you embed multiple layers of security when verifying a customer without creating friction? The answer is right in the palm of your hands. Mobile devices can help businesses overcome the limitations of signing up for a service online if the backend technology is seamless and invisible to customers.

We are talking about an identity verification stack that leverages digital identity verification and document verification service to verify a customer’s identity in real-time, cost-effectively, and efficiently.

Electronic identity verification

Electronic identity verification is a technology that enables the verification of a person’s identity remotely through digital means. Traditional methods of ID verification require the presence and checks of physical ids, such as driver’s license, passport, utility bills or other tangible identity documents. This process requires extensive paperwork and labor and is thus time-consuming, cumbersome, slow and costly to both the service provider and the customer.

Digital identity verification bypasses the physical document and relies on the consumer’s data such as name, date of birth, address, and many other potential data points. This data is checked against various databases of consumer data (credit bureaus, government agencies, utilities and other data sources) to determine if rules for identification are met.

There are benefits of digital identity verification for both the consumer and service provider. The consumer can apply online or on a mobile device; it’s quick and easy. For service providers, they satisfy the regulatory compliance and fraud prevention measures that are necessary for financial services and payment companies. The bottom-line also benefits due to lower costs achieved by better processes and higher profits by quicker, smoother onboarding.

Document verification

A document verification service enables you to quickly determine that an ID document is authentic from anywhere in the world.

The service recognizes different identity documents and performs comprehensive algorithmic-based checks on thousands of global document types. The system also checks for unique enhanced security features available in some ID formats (such as U.S. driver’s licenses) and analyzes and decodes these advanced security functions. When you get a positive match on the ID, you then have the confidence to determine the document is genuine and not a forgery.

A real document, however, doesn’t automatically imply identity verification. Someone could have a forged document with false identity information.

The document verification service collects the information in the document by performing Optical Character Recognition (OCR) of the images, which deciphers the text. The identity data is sent to an API at Trulioo to perform instant verification. That’s where the power of GlobalGateway from Trulioo comes into play with the ability to check multiple identity attributes against various data sources.

GlobalGateway also provides Risk Intelligence, which helps you determine your user’s location when performing ID document verification, providing more assurance and reducing the risk of fraud. It gives you risk-based flags on the email ID entered during onboarding. It helps you confirm if customers are located where they say they are, without adding any unnecessary friction in their verification journey

Combining GlobalGateway Identity Verification with Document Verification services enables a multi-layered approach to strengthen identity verification systems, increasing levels of confidence in your KYC checks to reduce fraud and mitigate risks.

Digital identity verification helps build trust for safe onboarding and user authentication. Adding document verification technology offers an additional layer of security. Increase the effectiveness of your onboarding program and meet your KYC and AML requirements more effectively with digital identity and document verification.

This post was originally published on March 14, 2017. It has been updated to reflect the latest industry developments and best practices.