For decades, ID verification has played a key role in authenticating a person’s claim to a particular identity. Online ID verification systems are easy and swift to verify a person’s ID without requiring them to submit the required documents in person.

ID verification is a crucial requirement in myriads of procedures and processes. It can be used to open bank accounts, electronically complete tax processes, etc. The wide application of ID verification makes them a critical component of anti-money laundering (AML) and Know your Customer (KYC) for financial institutions to assess customer risk.

In this article, you’ll learn about online verification, how it works, what kind of sites would use it, and how reliable the technology is.

Identity Verification – What Does it Mean?

ID verification is an authentication process that requires scanned documents, government-issued IDs, or photo identification cards to verify a person’s identity and ensure they’re the person they claim to be. Several documents can be used to verify the identity of an online user – driver’s license, social security card, birth certificate, etc.

However, IDs can be forged or stolen. Therefore, governments, companies, and financial institutions like banks undertake extra measures to confirm whether an actual person matches who they claim to be. These institutions often employ sophisticated online ID verification steps to comply with regulatory requirements.

Online ID Verification – How it Works

As businesses strive to improve their online presence and make virtual transactions, it’s becoming increasingly important to verify the legitimacy of your online users.

ID verification combines publicly and personally available data to determine a user’s identity. Computerized systems can compare these data and establish whether there’s a full match, no match, or a partial match.

Although managing online IDs is quite important, it can be daunting. For years, decentralized technologies have operated under pseudo-anonymity. The lack of person-to-person encounters in transactions makes verifying online IDs challenging.

Identity solutions combine several approaches to ensure successful ID verification, such as:

Use of biometrics

Biometrics such as facial recognition, fingerprints, and iris scans can authenticate users and verify their presence. When biometrics are integrated with liveness testing, they enhance levels of accuracy to ensure the right user is present at the access points.

Liveness testing tools

As its name suggests, liveness testing is used to determine whether the submitted picture is “live”. It establishes whether a user’s selfie is authentic by detecting any spoofing attacks such as pictures of pictures or the use of face masks.

Counterchecking against the database

Most verification tools allow users to scan or present official documentation and countercheck it against their database. These systems use sophisticated tools such as photo recognition to make these platforms more precise like a human verification agent.

Proof of identity

To onboard customers, banks and other financial institutions may require users to provide more than one form of identity – such as photographic identification, official documents, etc. These forms of identity are then used for identity proofing.

One-time passwords (OTPs)

This type of ID verification sends a single-use password sent to the user through an email or SMS. One-time passwords typically verify a user’s presence by assuming that only they have access to the email account or mobile device.

How Online ID Verification Can Help Your Business

ID verification is an effective way to protect companies, governments, and various financial institutions against bad actors. It identifies nefarious users and prevents them from concealing the nature of their transactions and using the organization in money laundering activities.

Furthermore, online ID verification helps your business to remain compliant with established government regulations and uphold public trust. Companies, governments, and financial institutions can face immense consequences for being used for illicit transactions, even if they weren’t aware – hence ID verification is an issue of great impact.

Which is the Best ID Verification Tool for My Business?

Essentially, ID verification acts as the gatekeeper to ensure only genuine users can use the financial institution. There is no one-size-fits-all tool when it comes to the best online ID verification solutions. The best verification tool for yout business will vary depending on the industry and its applicable regulations.