e-IDV: Automating Identity Verification for Financial Institutes

Identity Verification
Fingerprint, digital environment, cybersecurity concerns

The digital world is evolving promptly, but modern business differs from traditional. Various types of scams happen daily in the financial world. After digitisation, not any business is secure from online scammers. Financial institutes are the primary targets of these cybercriminals. However, technology helps economic organisations to safeguard against these financial criminals. Electronic Identification through e-IDV is one of the leverages technology provides financial institutes. It assists them in verifying the identity of the business and customer before onboarding so they can prevent their company from money laundering.  

What is Identity Verification? 

The company uses identity verification to disclose the customer’s identity before onboarding. For that, financial institutes attest various user documents, such as government identity, passport, driver’s licence, or any other records that can verify their identity. This will inform the companies about the user authenticity and ensure they are not involved in illicit activities like money laundering, terrorism financing, fraud, etc. Companies collect the user’s real name, address, and contact from the collected ID and verify them. 

Difference between IDV and E-IDV 

Before the latest technological innovations, financial institutes relied on traditional Identity Verification (IDV). Typically, in the standard identity verification process, companies check the customer’s government alot IDs to verify them. For traditional verification, the customer must visit the financial organisation with proof of their identity, and the registration agent attests all the records manually and confirms the customer’s legitimacy. 

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The e-IDV also verifies the customer’s identity from the IDs but faster and remotely through robust technology. The main difference between these is that electronic identity verification can recognise, verify, and screen the customer’s data from various databases faster than the standard document-based solution. 

How e-IDV Operates in Financial Institutes? 

e-IDV works to verify the customer’s identity electronically, whether through the computer or cellphone. Financial institutes only have to register their customer identity on the e-IDV services provider platforms after that, online identity verification platforms check the user identity through rigid checks. Mainly, electronic ID verification measures depend on the state or jurisdiction, but some standard steps are given below:

Collect ID 

It requires the customers to send or take pictures and upload them on the website through their phone. The user only has to register on the e-IDV platform, and after that, they can submit the required documents. These papers can be a driver’s licence, government ID, state ID, or any other government-issued ID. 

Attest ID  

After the user uploads the ID, the e-IDV platform system extracts the document and attests these through a series of heuristic checks. These security measures of automated identity verification ensure the ID is legal or not any part of the papers is counterfeit. For that computerised ID verification, check the visible security features such as name, signatures, borders, etc.  

Gather Documents

Financial institutes have to comply with various regulations, including anti-money laundering (AML), counter-terrorist financing (CFT), and other anti-fraud measures. To comply with these, they must attest multiple documents according to the financials company and state regulatory authority requirements. These can be birth certificates, salary slips, tax returns, bank statements, medical cards, or other common documents. 

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Validate Documents 

Once the documents are uploaded to the platforms, the system scans all these papers and verifies that the documents are not forged or duplicated. Same as IDs, all government original papers have security features; e-idv verifies these with the help of those security features. 

Databases Screening 

The most complicated part of identity verification is data validation. Because of digital technology, it is simple to convert one person’s information to another person’s. The e-IDV mostly uses Optical Character Recognition  (OCR) technology to convert written paper data into computer-readable text. After that, screen the data from various watchdog databases, including AML, CFT, Politically Exposed Persons (PEPS), or more third-party sanctions lists. 

Facial Verification 

The technology also makes it easy for the financial institution to verify the customer from one video call or a selfie. For the verification, customers must submit their selfies for facial verification. During the selfie verification time, a user uploads a pick on the watching camera as well as selfies looking left and right. Now, after the deepfake technology, for adequate e-IDV, most online identity verification offers video verification. 

The Bottom Line 

Overall, electronic identity verification is evolving the financial institutions. With the help of E-IDV, they can onboard customers remotely from anywhere and anytime, comply with strict regulations, adequately verify customer identity, and prevent money laundering and other financial crimes. Automated ID verification also enhances customers’ trust in the company and positively impacts them.