Digital transformations are bringing various changes in everyday lives. Similarly, businesses are shifting their operations to online onboarding and customer identity verification. Criminals alongside are using advanced technologies to dodge these checks. They use fake information and forged documents to support it. This way it becomes difficult for businesses to identify these activities through manual verification.
Hence, businesses need to employ robust and seamless ID verification solutions. This way businesses can ensure that the customer is present behind the screen. Moreover, online verification services automate the process by providing a user-friendly experience and simple steps. The blog covers common types of fraud that businesses are facing along with how digital customer verification help overcome these criminal threats.
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How do Identity Verification Services help Businesses Counter Different Types of Fraud?
Businesses are readily adopting innovative ways to onboard customers which are raising various other concerns. According to Shufti Pro News, criminals are using sophisticated methods to register on legitimate platforms. For this, they use various types of identity theft depending on the industry they are targeting. However, AI-powered verification tools can help businesses counter these criminal threats. The common types of identity fraud are enlisted below:
Synthetic Identity Fraud
Synthetic identity theft refers to the process where criminals use customers’ real information and create fake identities. For instance, blending birthdates and addresses into camouflage identities. Furthermore, criminals make changes in the original documents and easily create a fake identity. Criminals use these fake identities to apply for loans, medical benefits, make purchases, and other related activities.
However, digital identity verification solutions use OCR technology that not only validates the documents but also cross-verify customers’ identities. Therefore, businesses can restrict criminals from registering on the platforms.
Identity Fraud in Healthcare Sector
Medical identity theft is a crime where criminals act as imposters to avail medical services and assistance. These include prescription fraud, insurance theft for costly surgeries, and applying for medical devices like a wheelchair. Ever since the pandemic, healthcare centers are moving towards digital assistance where doctors provide online consultancy.
However, if a criminal is using a fake identity, the legit customers will be charged for the treatments and services. Therefore, the healthcare sector should verify patients and their documents before they provide any assistance. For this, Shufti Pro Funding indicates they need online ID verification services that will help healthcare providers to verify their identities in real-time.
Identity Theft in Financial Institutions
Financial institutions are the most exposed to criminal threats because they deal with hefty transactions and other money-involved activities. Criminals use fake information to open accounts and make transactions. Similarly, they hide their sources of funds and Ultimate Beneficial Owners (UBOs) to launder money. These can lead to worse consequences like terrorism financing.
Moreover, criminals take over accounts or create one under someone else’s name. Therefore, financial firms need advanced identity theft protection services to identify customers, and their sources of funds, and keep track of transactions.
How does the Identity Verification Process Work?
AI-driven verification tools are less complex and do not ask customers to repeatedly fill in their information, rather it stores the data. When the customers log in, the system allows them to autofill in the fields and easily access their accounts. For this, it involves the following steps:
Collection of Identity Information
The first step in the customer verification process involves the collection of verifiable data and identity information. Here, the system asks the customers to fill in the form presented on their screen. The fields include full name, date of birth, and address.
Submission of Documents
In this step, the system asks the customers to upload photos of their original and not older than three-month documents. These include govt-issued ID card, driving license, credit card details, and passport for identity verification. And for proof of address, the system asks for utility bills, rental or ownership agreements, debit/credit card statements, and insurance documents.
Uploading a Real-time Selfie or Video
After document submissions, the system asks the customers to upload a real-time video or selfie. Here the biometric identity verification system detects liveness, scans facial features, and recognizes the voice. This step aids as an additional security layer to the customer verification process.
Data Extraction and Verification
Once the identity document is uploaded, the document template is identified. After submission, OCR technology extracts data from the documents. During this process, the authenticity of the document is also checked. If the user-entered information and then one extracted from the document match, identity is verified.
In Summation
Identity verification is taking over the market by offering various authentic checks for legit customer onboarding. According to Statista, it is expected to cross $18.12 billion by 2027. This is why businesses should incorporate these solutions to mitigate all types of fraud.
