ID Verification Services: What, Why and How
What Is an Identity Verification Service?
As more businesses undergo digital transformation, more transactions occur online. The main advantage is that there is no need for customers to be physically present to conduct transactions. On the other hand, online transactions come with unique challenges.
In the digital sphere, it is not possible to physically verify the identity of individuals. However, companies still need to ensure they conduct business with legitimate individuals. Identity verification (ID verification) services can help solve this problem, ensuring that customers are verified when they are not physically present within the organization’s facilities.
ID verification services can integrate into a wide range of processes, verifying the identity of individuals as they open new bank accounts, move into new houses, sign up to online gaming sites, and more. To verify identities, ID verification systems cross-reference all the information provided by the individual against legitimate data sources. This check results in a confidence score, which the organization can use to assess whether to pass or fail the onboarding of a certain individual.
In this article:
- Technology Stack
- Real-Time Processing
- Compatibility and Interoperability
- Dynamic Development and Support Systems
- How to Select an Identity Verification Provider
The Need for Identity Verification Solutions
Identity verification solutions can help protect online transactions and ensure that digital services are provided to legitimate individuals. Here are several notable examples:
ID verification solutions can help financial institutions, including banks, validate the identity of prospective customers. Financial institutions are usually required to meet strict know your customer (KYC) standards.
For example, ID verification can collect information from customers and verify that the information is accurate. This helps prevent threat actors from falsifying information to launder money, finance terrorism, create fake accounts, and conduct a range of fraudulent transactions.
Commerce and eCommerce
The majority of businesses and merchants use the Internet to sell and distribute their services and products. To process transactions online, businesses must comply with regulations and standards, which may include the implementation of a customer verification process.
Merchants that sell age-restricted products, such as tobacco, alcohol, and marijuana, or services like gambling or adult content, are required to verify the age and identity of customers. This check must be done before allowing customers access to products or services.
In certain cases, like age-restricted products and content or online monetary transactions, non-compliance may result in high fines and reputational damage.
Key Features of Identity Verification Software
When deciding which identity verification solution to adopt, you need to research the market to assess the available solutions. When shopping for a solution, consider the following features.
Identity verification software providers offer solutions in various forms, adjusted to the specific needs of different companies. You can integrate ID verification into your chosen platform with a software development kit (SDK) that packages the entire verification process. Look for an SDK in the form of a plug-and-play solution or as a web service that verifies user identity through API requests.
Third-party, identity-as-a-service (IDaaS) solutions are cloud-based services that offer authorization and identity and access management (IAM) capabilities. to their users. These services don’t have to be integrated in-house, with the provider handling all the underlying technology and security.
Related content: Read our guide to ID check online
This is an essential feature for enhancing the user experience and making the verification process more efficient. Organizations can assess risk within seconds of a request, leveraging multiple identity attributes such as IP address, device specification, and location.
Compatibility and Interoperability
ID verification providers each have their definitions for the verification process, but all must be able to unify various data sources. Regulations require some industries to maintain higher levels of compliance when handling sensitive, personally-identifiable information. Organizations need to ensure the validity of ID-related information by cross-checking it with multiple data sources such as government databases and international watchlists.
Dynamic Development and Support Systems
Identity verification technology is fast-developing, but so are the fraudsters. You should make sure your provider continuously improves their technology to keep up with regulations and enhance user experience. Scalability is important for ensuring you can maintain a high level of security when your company expands. Collaboration between the company and the vendor should be transparent and frequent and will help keep the identity verification process up to date. Take the time to investigate the levels of support provided by your prospective vendor.
Implementing an Identity Verification Service
Follow these three steps to implement an identity verification service in your organization.
1. Evaluate your Needs
Each business requires a different level of security and user authentication. Some businesses, for example, might need a simple verification tool that validates the identity of all people entering the office. In this case, the business can use an attendance system using simple fingerprint verification.
Organizations handling critical data, such as financial institutions and cryptocurrency firms, require comprehensive security and identity verification solutions. These organizations must meet strict standards, as defined by KYC and anti-money laundering (AML) regulations. This often involves cross-referencing multiple data sources and running AML screening.
2. Analyze the Process Flow
To understand what kind of ID verification solution your business needs, you need to analyze the process flow in your organization. Understand what information you need to verify customer identity and what steps are involved in the verification process. Once you map the process flow, you can find the solution that best suits your needs.
For example, if your company only requires identity documents (IDs) to verify user identity, you may not need to add a facial recognition check to the process. Face verification is usually implemented by liquor stores, gaming websites, and websites that sell age-restricted content and products.
3. Balancing Security and User Experience
Security is a critical aspect, but so is user experience. Ideally, businesses should balance both aspects. Before choosing an ID verification solution, organizations should analyze its value against the user flow to check whether their customers will be able to adapt to the new process.
For example, users trying to access their bank accounts are more likely to expect and follow comprehensive security and ID checks, but they will not follow the same process when logging into their social media accounts.
Additionally, the solution must establish a certain threshold. For example, any match above a predefined threshold should be accounted as a match when implementing facial recognition for ID verification purposes. The defined threshold should not be too low (because that can increase the risk of false positives) or too high (because that might reject a good match). The threshold should be within a reasonable range to ensure a positive user experience.
ID Verification Service with BlueCheck
BlueCheck’s industry-leading ID verification service 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.