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Digital Identity Verification Facts That You Should Know About Digital Identity Verification Facts That You Should Know About
News    03/24/2021

Digital Identity Verification Facts That You Should Know About

To accurately verify customers remotely and in real-time during the onboarding process, businesses need to invest in digital identity verification solutions.

The coronavirus pandemic has brought about a substantial change in the way we live our day-to-day lives. One shift that is apparent is our association with technology and the way we virtually access financial services. As we look forward to restarting our lives in the post-corona world, we are increasingly dependent on digital channels and technologies to bridge the gap between what we were used to doing ‘in-person’ before and what we will be able to do in the future, either remotely or from a distance. This is evident in the financial sector in particular, where customers and businesses alike must adapt to opening accounts, send applications for loans and make transactions through digital and mobile banking channels.

Remote banking requires a high degree of trust between the customer and the bank. In order to enable digital identity verification, banks need to authenticate that their customers are actually who they claim to be. They need to implement proper Know Your Customer (KYC) processes according to global and national regulations and also need to ensure the customer is not a bot or a fraudster. The ability to authenticate an individual’s identity remotely and in real-time through digital identity verification is therefore vital.

In this blog, we will be exploring the significance of identity verification and learn about the advantages of digital identity verification solutions.

Why Digital Identity Verification is Necessary

Regardless of what sector it is, businesses are increasingly moving towards digital platforms. From traveling and banking to shopping and healthcare, companies are leveraging digital infrastructures to connect individuals with what they need right now.

However, several businesses are still using manual methods for performing identity checks. For instance, face-to-face verification is often required for opening bank accounts even today, or for applying for a loan. On the other hand, conventional methods of customer identity verification will no longer be sufficient in a post-corona world.

Also Read: Why Your Enterprise Needs Protection from Phishing

Digital identity verification not only expedites the process of customer onboarding, but also eliminates barriers such as geographical boundaries which limit access. Although this form of verification offers numerous advantages, it does not come without its own set of challenges. For example, even if bank accounts can be opened remotely, how do businesses ascertain the identities of their customers when mass-scale financial frauds are being reported on a regular basis? As businesses move online, a wealth of data becomes easily accessible for fraudsters which they can use for carrying out fraudulent activities, such as filing for false insurance claims and tax refund fraud.

This brings us to the big question - How can businesses make their identity verification systems more secure without compromising regulatory obligations and customer convenience? 

Identity Verification Solutions

Digital payment industry is growing annually by approximately 16%, and further forecasts report that digital payment transactions could potentially reach an amount of USD 10,520,219 million by 2025. Growth in this sector makes it more essential than ever for financial institutions to accurately identify their customer base to weed out fraudsters. Digital identity verification solutions provide businesses the opportunity to enhance the efficiency, security and authenticity of their customer identification process at the time of onboarding. Additionally, such solutions enable CDD (Customer Due Diligence) measures such as transaction monitoring and background checks.

Benefits

Before the pandemic hit, numerous financial institutions had partially digitized their processes. For example, an individual might go online to begin their loan application, and then finalize the loan by physically visiting a branch to provide their ID documents as evidence. However, financial service institutions that aim to sustain their customers have realized the importance of onboarding customers online. The more they invest in digital identity verification solutions, the faster they will be able to adjust in the post-covid world.

With that being said, reliable digital identity verification solutions offer compelling advantages, some of which are listed below:

  1. Minimize the risk of human error
  2. Improve customer experience
  3. Cost efficiency
  4. Financial inclusion
  5. Detection of suspicious transactions and individuals
  6. KYC (Know Your Customer) and Anti-Money Laundering compliance
  7. Rapid customer authentication

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