Digital ID verification – why it’s important for businesses
Anyone who runs an online shop, provides financial services online or generally operates a platform on the internet where trading with money takes place, must in many cases verify the identity of their customers so that a service can be provided. In this article you will learn why digital verification is so important and how it helps companies to speed up verification processes and thus contributes to a greater customer conversion rate.
Image: Online verification is becoming increasingly important in the digital age. Image source: PublicDomainPictures viapixabay.com
Why digital identification?
In the past, if you wanted to open a bank account, you went to the bank, presented an identification document so the clerk could match the person’s ID.
Nowadays, things are different: bank accounts and other accounts are opened online. That’s why digital ID verification for financial services (digital identity verification for financial services)is so important. This is to ensure that even without the personal appearance of the person to be verified, the verification is legally compliant and ID misuse is excluded.
How does digital ID verification work?
There are different methods to digitally verify a person’s ID. Artificial intelligence plays a major role in this. AI algorithms are used, for example, to examine whether the photographed image of a passport or other ID document is genuine or forged.
The algorithm checks the document for watermarks, holograms and other distinctive features, as well as the biometric features on the passport photo. The camera then compares the face of the person to be verified with the one on the ID document and creates an authenticity score. If this is sufficiently high, the document is classified as genuine and the person is verified.
Another method is video identification. Here, the person to be verified is checked via smartphone or PC camera in a short conversation with a specially trained verification specialist. An ID document must also be presented. The verification is carried out either by an employee in the company or – even easier – by an expert at the ID verification service selected by the company (if video ID is offered by the service).
Advantages of digital ID verification for companies
Digital ID verification has several advantages for companies. The biggest is that geographical borders no longer play a role. A financial service provider can thus offer its service in many countries of the world and is not limited to one territory. In concrete terms, this means more potential customers.
Another advantage is that the verification process is quick and uncomplicated for the potential client – as long as a suitable tool is used for it. This means that there is no frustration on the customer side, either because verification takes a very long time or because there are high technical hurdles. The simpler the verification process, the higher the chances that the customer will go along with it.
If your company used to verify your customers yourself with your own process, you can save time and resources in the future by outsourcing this work with a special ID verification service. After all, service providers who specialise in ID verification have modern tools and experts at their disposal that not only speed up the verification process, but also make it more secure.
By using certified ID verification tools and services, companies have a very high level of security. The risk of a customer misusing ID and registering in someone else’s name is low. In addition, ID verification can also be used as an effective means of age verification.
What should you look for when choosing an ID verification service?
When choosing a suitable service provider for ID verification, it is important that their services are regulated and certified. Legislators in many countries prescribe very strict rules for ID verification. In order to be legally protected, it is therefore important to only use services and tools that meet the security requirements.
Make sure that the providers comply with AML (anti money laundering) regulations and explicitly offer an AML/KYC (know your customer) service. AML goes beyond KYC and is particularly important for companies that offer financial services, gambling or other services that can be misused for money laundering purposes.
Providers that explicitly show that they are compliant with legislation from different countries or regions (e.g. EU or USA) should be used if you have your registered office in one of these countries or many customers from these countries. This way, you do not run the risk of the verification process not being legally compliant.
If you decide to use a video ID service, it is advisable to leave the verification to the service provider. They have specially trained employees who verify dozens of users every day and thus have a lot of experience. This way, you know your customers very well, create a high level of trust and are legally on the safe side.