ID Verification – A Detailed Insight for Businesses in 2020
We are experiencing the fourth industrial revolution and the need for adopting new technologies is inevitable. Businesses are always the first ones to be affected by such changes and it leads to changes in their operations. In case the businesses ignore these changes, it affects their customer experience which leads to the reduced value of the company.
So it is necessary to pay attention to every customer touchpoint and to revamp it in accordance with the technological changes. Customer security is the primary part of the customer experience, and it needs to handled with care. Customers these days are aware of the pros and cons of the technological Shift so they demand higher security at online platforms. In order to fulfill the extended needs of the customers, businesses are investing in Digital ID verification solutions.
Digital ID verification solutions are the substitute for in-person or manual identity verification of the customers. The identity verification industry delivers these services in the form of SaaS. These solutions use Artificial Intelligence (AI) to detect and verify identity documents. Some companies also provide biometric authentication to add to the efficiency of KYC practices. A simple ID verification API needs to be integrated with the existing system (website, web portal or app). These solutions are remarkable in delivering high accuracy results swiftly and enhance the customer experience.
Significance of ID verification
ID verification is crucial for a business, either it is performed manually or with a Saas product.
It’s a regulatory obligation
It is the regulatory obligation of businesses to verify their customers. Gone are the days when it was the obligation of only financial institutions. With the increase in fraud and financial crime, it is mandatory for almost every business, wither it is an e-commerce platform, a fintech company, a real-estate firm, or even a non-profit organization. The KYC and AML laws are applied to all of these.
KYC is the set of due diligence rules implemented on banks, businesses and even non-profit organizations. These laws are almost the same around the globe with a few differences in every country. Common features of KYC are:
- Identity verification of customers before onboarding them
- Performing enhanced due diligence on high-risk customers,
- Collecting and storing customer data
- Reporting any suspicious transactions of customers to reporting entities
- Reporting transactions above the maximum transaction threshold ($10,000 in most of the cases)
- Maintaining a compliance department
- Registering with the regulatory authorities
The above-mentioned features of KYC laws show that ID verification is the first and foremost part of compliance.
Most of the risks of fraud come from customers. As research stated that more than 14 million identities were stolen in the U.S during 2018, and 3 million identities were used to commit some sort of fraud. Not to mention the major fraud victims were businesses, and banks while and the most common type of fraud was credit card fraud.
Verification of the ID card of the customer is necessary to mitigate fraud risk and to onboard only reliable customers.
Customers demand a seamless secure online experience, which can be achieved with rigid security measures performed with efficiency. Manual verification increases the risk of false positives and leaves a negative impact on customer experience. It takes more time and effort to perform manual verification, while the customers demand a fast and enhanced experience.
Online ID screening enhances customer experience with its swiftness and friendly user interface. It also improves security measures practiced in business operations and reduce false positives.
To wrap up, businesses are thriving in a digital era, and investing in next-generation solutions to automate operations will guarantee growth in the future.