In the tech advanced era where counterfeiting or stealing identities is highly common, selecting appropriate identity verification method is of utmost importance. It is to check if a person behind the screen is legitimate.
6 Fraud Prevention Methods
Identity verification process is carried out by several methods following distinct approaches.
- Knowledge based authentication
- Two-factor authentication
- Biometric verification
- Online identity verification
- Identity database
- Credit bureau based solutions
- Knowledge based authentication
Have you ever entered your nickname or the name of your favorite dish as a security answer to prove your identity while accessing an online account? Such an identity verification solution is known as knowledge-based authentication. KBA verifies an individual’s identity by asking them to answer previously set security questions. You could also be required to enter answer within a defined time limit, say 1 minute.
The major drawback of using KBA as an identity verification method is its easiness. Anyone close to you, either your friend or relative can make a guess to your security question. Answers could also be discovered through the social networking sites and social engineering. Further, this ID verification solution doesn’t require any government-issued ID documents and lacks authority, reliability.
- Two-factor authentication
While making online payments or logging in the digital accounts, website prompting you to enter OTP is a usual affair. It is for putting an extra layer of security to your account to prevent a fraudster from logging in.
Two factor authentication requires a customer to enter a code sent to their registered phone number or email address. It is the simplest ID verification method that doesn’t require any specific tech tools or knowledge.
Multi-factor authentication requires customers to provide a username, password and sort of personal identification or token while they’re accessing the account. Token could be anything such as an OTP or code received from the authentication company.
- Biometric verification
With traditional identity verification methods such as KBA and SMS-based authentication on their way out, online identity verification services hold an immense importance. Biometric verification is the process of uniquely identifying person by matching his/her biometric traits. Customer onboarding is the most common use case for this identity verification method.
Online ID verification services backed with AI-integrated biometric technology facilitate with satisfactory user experience, assured answers and quick identity verification. It includes facial recognition, voice recognition, iris/retina scanning and fingerprints.
For instance, while conducting onboarding process, a customer is required to pass through facial verification. He is asked to upload the photo of government-issued ID document followed by a selfie. While taking a selfie, identity verification providers also enable liveness checks to know the person behind the screen is live. The system then analyze the biometric characteristics against the ID document submitted.
- Online identity verification
Online identity verification method includes verifying user’s identity by matching their image with identity documents. It checks whether a government-issued ID of a customer really belongs to the user. Online ID verification employs advanced technologies such as Artificial Intelligence, machine learning, and human review to comply with KYC and AML obligations. This is to ensure the person is who they say they are.
This identity verification method require users to upload a picture of themselves holding their ID document. It is highly secure and facilitates with quick onboarding by extracting data using OCR technology.
- Identity database
Database identity verification methods include verifying identity of a customer against the user-provided data. This method analyzes personal identity details such as name, address, date of birth to verify a user’s identity.
The data collected from customers is matched to the trusted data sources. Once the data is verified, identity verification software will revert back with accurate results.
- Credit bureau based solutions
Online identity verification services mainly approaches Experian, Equifax and TransUnion as their credit bureaus. These bureaus consist of a vast database of credit data such as name, address, social security number across different countries. Their repositories of consumer credit data is then utilized for performing identity match of customers.
Final Thoughts
Identity verification services are vital to curb illicit activities for all industries including banks & financial institutions, healthcare, gaming, cryptocurrency and more. Prior integrated ID verification solution APIs, companies must look for the verification method that best match their needs. For instance, industries requiring higher security should opt for biometric verification.
