A drivers license is a document providing its owner with the right to drive vehicles on public roads. Driving licenses are often used for identification purposes. However, these documents are valid for local purposes and do not meet international standards (with the exception of European driver’s licenses, which can be used through the EU).
Today, more and more transactions are performed online. Digitization of ID verification processes can improve efficiency and provide a better user experience. Additionally, online drivers license verification can reduce or eliminate the chance of human error typically associated with manual processes like face-to-face verification.
Online drivers license verification can help provide a consistent and seamless experience for both customers and employees. For example, it can help quickly onboard employees, whether they are working at a physical facility or remotely, and facilitate compliance with regulatory requirements such as Anti-Money Laundering (AML) and Know Your Customer (KYC), required when providing financial services, legal services, or selling age restricted products.
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As sensitive transactions move online, remote identification becomes increasingly important. Identifying signers can help protect against fraud and ensure compliance. In some industries, digital agreements cannot be legally enforced without the use of a strong identification process. In many regions, the only widely available ID document is a drivers license.
The need for identification is more common in regulated industries such as banking. This is because it complies with regulations such as KYC. There are many reasons to verify IDs — commonly drivers licenses. For example, companies may be required to collect, verify, and store the personal identities of new customers and employees. In addition, companies who own vehicle fleets are required by law to verify the drivers licenses of their drivers.
KYC can help assess customer risk, and is also required to achieve compliance with AML. When trying to comply with these regulations, the use of manual identity verification is problematic and puts your organization at risk. In Europe, financial institutions have been fined £1.32 billion for compliance violations, most of them issued by the Financial Services Authority of the UK.
A manual drivers license verification process involves several steps, including physical identification, performing a credit check, and reviewing government listings. Additionally, a manual process may create a negative experience for customers, who find it inconvenient to bring their drivers license to an office and wait days or more for processing.
Important procedures, such as opening a new bank account or establishing a new insurance policy, may be delayed by manual drivers license verification processes. For many organizations, the ability to perform timely and accurate online identity verification is essential for normal operations, ensuring contractual agreements can be signed, compliance with regulations is met, and customers are well served.
The use of biometrics for drivers license verification requires the use of unique biological characteristics belonging to each user. Modern verification technology can ensure live presence (for example, to avoid fraudsters from presenting a photo of another person) using face, fingerprint, iris, voice or other behavioral indicators.
Increasingly, identity solutions are deployed as mobile applications. For example, users take a selfie and show a drivers license card to the camera, and the application verifies their identity. A cross-device authentication service allows customers to verify their presence by using a portable device to take a video or selfie. The verification process can be documented using timestamps, videos, IP locations, and device information.
Online identity verification solutions let customers present identification documents in front of a webcam, and use a verification API to extract and filter key customer credentials. Optical character recognition (OCR) can be used to verify drivers license documents in multiple languages.
Document verification includes several checks, including the full name of the end user, drivers license expiration date and format type, and address format. The process can also check if the document was tampered with or underwent image processing using tools like Photoshop.
Drivers licenses contain an address, and this is another way to verify the identity of individuals in real time, by matching addresses with official databases. Users can be required to upload a photo, and a secondary official document containing their address, along with the drivers license. The solution analyzes and correlates the data, and verifies identity.
In the Ecommerce and retail segments, organizations can use address verification to better manage chargeback fraud and improve their reputation. Address verification can also help reduce shipping overhead associated with returns and reduce delivery times by maintaining high-quality address data. Combined with identification using drivers licenses or other official IDs, this can also help improve customer risk profiling.
The identity verification process requires tracing an individual’s identity, which involves matching and cross-checking data points for accuracy. Organizations often need to collect personally identifiable information (PII), but customers are not always comfortable with this, given the risks associated with giving out sensitive data such as credentials and personal credit history.
Assess your data collection methods and make sure data is properly secured, in line with standards accepted in your industry and relevant standards and regulations. Provide users with control over the data collection methods, and explain how their PII is used for online validation.
Regulatory requirements for online identity verification are becoming more stringent. The methods for collecting, storing and screening data are constantly being questioned, and it can be difficult to keep up with changing regulations.
For example, the GDPR, enacted in 2018, guides companies and stipulates providing users with more control over their data. Another framework, AMLD6, tackles money laundering and terrorist financing by toughening penalties and liabilities. Sites containing age-restricted content (gaming, gambling, dating, etc,) are highly regulated and are required to digitally screen users to prevent identity theft and protect minors.
Ensure your security standards are compliant and reflect data sensitivity. Ensure that identity verification solutions comply with the relevant standards.
BlueCheck’s industry leading identity verification infrastructure enables merchants to grow their business faster. Serving a wide variety of industries, our solutions are custom tailored to the unique needs of our customers, including PACT Act and eCommerce compliant offerings.