In a world where online transactions are becoming the norm, the risk of fraud and identity theft is skyrocketing. According to the 2022 Identity Fraud Study by Javelin Strategy & Research, in the US alone, the total identity fraud impact resulted in $52 billion of loss affecting 42 million consumer victims. And with the pandemic-induced shift towards digital transactions, cybercriminals are discovering new and innovative ways to exploit system vulnerabilities and access confidential information.
So, how can businesses fight back? By implementing ID verification. It is the process of confirming the identity of an individual using a government-issued ID or other documents. And it’s not just important for businesses in the finance, healthcare, or e-commerce sectors – it’s critical for any company that wants to protect itself and its customers. By verifying a person’s identity, ID verification helps to prevent fraud and identity theft by ensuring that the person claiming to be the account holder is, in fact, the legitimate owner of the account.
There are two different methods of ID verification: manual and digital. Manual approaches involve filling out a form and waiting for someone to cross-check all the details, which can be slow and cumbersome. On the other hand, digital ID verification uses advanced technologies such as optical character recognition (OCR), document authenticity checks, and biometric technologies to confirm an individual’s identity. These methods are faster, more accurate, and more efficient than manual verification processes, and can be integrated into a fully-automated, end-to-end process where humans only intervene to handle exceptions.
One of the key advantages of digital ID verification is that it is more acceptable to consumers. With the rise of online transactions, consumers are increasingly aware of the risks associated with identity theft and fraud. By using biometric technologies such as facial recognition, businesses can ensure that the ID being submitted belongs to the person claiming to be the account holder.
Another advantage of digital ID verification is that it can help protect minors from accessing potentially harmful material online. By using biometric technologies such as AI age estimators and facial recognition, businesses can accurately determine the age of the individual and prevent minors from accessing inappropriate content.
Implementing ID verification processes is easier than ever before, with various software options that can be embedded quickly and easily using APIs. The best providers of that software also offer integrated, automated workflows, making it easier for businesses to onboard thousands or even hundreds of thousands of users quickly.
Business leaders should prepare for regulatory changes that may require them to implement ID verification processes. By getting familiar with the available technology options and developing plans to implement ID verification processes, businesses can protect themselves and their customers from fraud and identity theft.
In conclusion, implementing digital ID verification processes using biometric technologies can safeguard themselves and their customers while also ensuring compliance with regulatory requirements. By staying ahead of the curve and implementing these processes, businesses can mitigate risks and protect their organizations.
Liudas Kanapienis, Co-founder and Chief Executive Officer of Ondato
Liudas Kanapienis is an active fintech entrepreneur and business leader. After working as a CEO in several industries, Liudas led multiple financial organizations, including one of Lithuania’s first major fintech startups. After witnessing the challenges of regulatory compliance and identity verification firsthand, Liudas identified an opportunity to transform compliance from a hassle into a business benefit and partnered with Andrej Vištorskij to start Ondato and provide a more robust and efficient solution.