Credit card fraud is one of the most common types of fraud. In order to comply with ID verification, KYC and AML laws have been developed. However, ID verification requires an extensive amount of paperwork. During the pandemic's peak, around 31% of people globally were affected by scams. Due to this, more industries are starting to use ID verification. Most recently, this has been enforced in the cryptocurrency exchange. ID verification is a straightforward digital solution that should be implemented into all industries’ workflow to ensure security. Here we’ll discuss how ID verification works and why it should be used.
How ID Verification Works
ID verification can be performed in many different ways. The most common one is via a driver’s license. Traditionally, online ID checks are risky and time-consuming, due to the increase of online fraud. Some companies may require you to download an app or even update the phone’s software, in order to comply with the companies laws. However, background checks related to the ID could be overlooked when using online resources that are not compliant.
Consequently, the pandemic has lead to an increase in businesses investing in online security, to ensure checks are compliant. The next-generation ID verification is mobile optimized, the user is checked via facial recognition technology. The development of technology has enabled ID verification to be available to consumers from any geographical location. Real-timeverification allows consumers to shop, transfer money, and verify any business transaction from any location, simplifying the workflow.
ID verification ensures a faster turnaround time for organizations, who need to collect users’ information. Instant ID verification is efficient and easy. First, the customer will receive a text message, transferring them to a real-time session. Using this link enables the customer to snapshot a photo of their ID and a selfie, using the phone’s camera. Then it will automatically compare the images, and if both images match up, it will allow the customer to continue. To ensure security, applications such as one-time passwords and knowledge-based authentication (KBA) can also be implemented to authorize the ID verification process. This technology has allowed e-commerce to grow in organizations leading to the development of Apple Pay and Google Pay. Consumers can now shop efficiently from their phones via facial recognition technology.
Why ID Verification is Used
ID verification is an effective way to enable security in your business, which can effortlessly integrate into existing workflows. Although it is primarily used in banking, it is becoming more apparent in other industries. For example, in healthcare, when samples are being dropped off at a lab, this would be distributed by a courier. As healthcare samples are essential, the courier would need to be ID checked for them to be securely delivered.
KYC regulations require banks to make customers who are wanting to open an account, go through various ID verification checks. Primarily, this would require a lot of paperwork and many visits to the bank. Though when enabling digital solutions, this is time and cost-effective. As the technology for ID verification is compatible with smartphone technology, also enabling institutions to expand their customer base.
Generation Z, who have entered/ entering the workforce and are more familiar with digital technology in everyday life. This generation does not want the inconvenient service of going to a bank to set up an account: 73% have said they dislike the paperwork, and 75% have said they dislike visiting the branch. If competitors are offering a fully mobile service, they are more likely to sign with them. When put in practice, Citi Bank told the customer to visit the branch; this process is time-consuming. Focusing on the customer experience (CX) by making ID verification fully compliant makes onboarding customers easier. Also, adopting the use of technology means that tools such as chatbots can be used on the platform, making the experience enjoyable for them, as queries can be answered in real-time.
The passing act of California’s Privacy Rights and Enforcement Act of 2020 presents the importance and urgency of protecting consumers’ data. Also, the National Institute of Standards and technology is working to create new standards for government agencies’ digital identity verification. As digital ID verification is proven to be straightforward and secure, this will tackle fraud. This is important to governments due to the amount of fraud there was in the 2020 presidential elections in the U.S, with people voting both postal and at the polling station, resulting in more votes than registered voters. In addition, governments, starting to introduce a more secure form of ID verification, this will give consumers confidence when using the product in other industries.
ID verification can be easily integrated into existing workflows via APIs. With 95% of the population using their smartphones daily, it is easy for consumers to use this product. ID verification is secure and compliant with most laws and regulations. Digital solutions enable that the ID will be stored in a CRM that is tamperproof. Consequently, governments are now starting to incorporate this into the workflow. For example, with fraud detected in the last presidential elections, ID verification will make the election process secure and fair. With these acts enforced in California, other states will likely follow to improve digital identity to protect individuals’ privacy. The process is straightforward for the consumer to complete, as only 3 simple steps are mentioned above. Moreover, regarding generation z, it is important that companies start catering for them as these are/ will be the future customers. Hence, to ensure customer loyalty, making these alterations is vital for the business to grow.
KYC and AML laws ensure that the ID is compliant. With the number of online scams increasing during the pandemic, organizations had no choice but to invest in cybersecurity tools like ID verification. ID verification is born for mobile completion, making it a straightforward process for all stakeholders. To learn more about Lightico's eSignature, eForms, document collection, visit lightico.com.
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