About Digital ID Verification Service

As more and more online activities are growing, keeping our online identity, private data, and ID verification has grown vital. Unfortunately, not all banks and financial institutions know everything there is to know about Digital identity verification.

Digital ID verification is crucial in all kinds of online business operations. Knowing who your customer is before the onboarding process can minimize the risks of financial crime. There are a lot of things that are to be known about Digital ID verification that most people don’t.

What Is Digital Identity Verification?

The digital era has given birth to online identities and electronic documents. Same as physical documents, these online identities require online identity verification methods. An online document can be almost anything, a government-issued ID, online driver’s license, student records, bank account holder information, or more. The use of technology to make sure these electronic documents are authentic is known as online user identity verification. 

There are countless identity verification solutions out there but the best online identity verification methods verify electronic documents to verify identity.

Things to Know About Digital ID Verification Service

1. Implement Facial Recognition Wherever Possible

Technology is an ever-evolving factor, it’s growing at an incredible speed and the smartphone in our pocket is a technology that can offer multiple benefits. It provides a facial recognition technology that wouldn’t have been even possible a few years ago.

Facial recognition technology is already being applied to catch criminals, log in to campus and so much more. Governments and other organizations are making use of facial recognition software. The technology uses a lot of sophisticated algorithms which scan your face and identify your facial biometrics.

While there is a long debate on the regulation of the technology, the simplification, and usefulness of facial recognition technology state that you’ll be seeing more of the technology in the future.

The first thing that you need to know about digital ID verification is that modern digital identity verification is not as secure as you would want it to be. If banks and financial institutions could apply special-grade facial recognition in their KYC compliance process, the risk of financial fraud would drop by a lot. The use of facial recognition can make identity verification solutions more effective and less capital-consuming.

2. Digital ID Verification is Crucial to Mitigate Identity Theft

In this digital world, identities are one of the most common targets for criminals. If you want to reduce fraud fight identity fraud and combat identity theft, websites and companies are using real-time ID verification to make sure that customers are who they really are. Simply put, identity verification is growing at an alarming pace as identity theft is the favorite crime for cyber attackers.

The good news is that digital identity verification solutions that are available online can allow banks, financial institutions, governments, and other organizations to fight identity theft. One of the ways to fight ID theft is by verifying documents and DIRO document verification service can help you verify original documents whenever you want. 

The second thing that you should know about digital Identity verification is that verifying a physical person in the verification process is the ideal way to fight identity theft. 

3. Acquiring a Bank Account Will be Easier With Document Verification Technology

Opening a personal and business account is a tough thing to do, KYC compliance can be a painful process for customers. KYC compliance requirements take an average of 24 days to complete. That whole process is frustrating enough, and to make matters worse, some banks don’t even share your KYC information between internal departments, which results in repeated requests for the same documents over and over again.

Although, things seem to be changing for the customers as smart KYC systems are slowly growing. DIRO document verification technology helps improve the overall KYC and AML compliance process by verifying original documents in under 60 seconds. 

The third thing you need to know about digital identity verification is that it is more than just convenience. Document verification solutions like DIRO could save organizations a lot of money. 

4. Digital ID Verification Reduces the Risk of Human Error

Long before technological advancements made things smoother, document verification and identity verification were done manually. Making mistakes is human nature and it is the very thing that makes us human. Even the smallest mistake can become the reason for a data breach that can cost organizations hundreds of millions of dollars. It doesn’t matter if the data breach is malicious or accidental, data breaches have exposed over 4 billion personal records in the last year itself. 

Technology can provide you with an ideal solution to document and identity verification services. Technology can help FinTechs reduce costs for manual KYC work, and it also keeps digital IDs safe from data breaches. If you secure your data then you should employ every digital identification protection process that you possibly can.

The fourth thing that you should know about digital ID verification is that a lot of services include “ID verification experts” which is a term referred to as low-paid off-shore employees. These experts have the responsibility of viewing and verifying your identity documents. While these people, in general, are trustworthy, there can be a bad apple every once in a while. So the manual process of sharing identity documents can lead to a huge data breach. DIRO document verification technology can help organizations by making sure they verify original documents.

5. The Government Is Pushing For Secure Digital Identities

The launch of the European General Data Protection Regulation (GDPR) took the world by storm. What you should know is that GDPR is the gold standard when it comes to digital data and identity protection. Companies that don’t comply with the GDPR regulations can have to pay fines that can run a company aground. A social media giant like Facebook is currently paying a fine of $2.23 billion. 

This is a great regulation for all the organizations that are concerned about getting their identity stolen due to malpractice by organizations. The last thing that you should know about digital ID verification is that regulations like GDPR make sure that organizations stay in line.

Digital Identity Verification Best Practices for Financial Institutions and FinTechs

Online account opening, transactions, and similar activities have increased tremendously in the last decade. Not just convenience, online banking also provides a platform that fraudsters can manipulate. Verifying digital identities is a crucial step in preventing fraud in online banking. 

Digital identity verification has to be part of the entire customer journey, from onboarding new customers to returning customers and approving high-risk transactions. 

KYC and identity fraud prevention solutions in the customer onboarding process aren’t as great as for customers with a limited digital footprint and with thin files.

To ensure fraud is controlled, there are some digital identity verification best practices financial institutions and FinTechs need to use.

Avoid Friction Filled ID Verification Methods

To verify “grey applicants,” some organizations apply additional verification measures such as knowledge-based authentication (KBA). A lot of other organizations push the application for a manual review. These processes are full of friction, expensive, and time-consuming.

KBA almost always offers a poor customer experience and is easily manipulated. KBA is no longer considered a secure customer verification method, as attackers can quickly find answers to the questions.

Many FinTechs have found that a 100% KBA score is the primary indicator of fraud.

If the application is pushed to manual review, applicants wait for hours, days, or weeks. If it takes this long for a customer to be approved, they will likely abandon the process. 

A great approach to solving these challenges is to build seamless workflows that offer enhanced ID verification software with accuracy and a great customer experience. 

Solutions like DIRO’s document verification solution provide financial institutions a way to verify banking information, address documents, and other KYB information more quickly and securely.

A combination of DIRO and human effort provides a cost-effective and scalable solution for onboarding customers and businesses. It cuts down on onboarding times dramatically while enhancing security.

Not all document verification solutions can meet the demands of financial institutions. Legacy document verification solutions only focus on ensuring the authenticity of the physical ID of document templates.

This can be an excellent first step. But, fraudulent documents and stolen IDs must be verified to ensure they haven’t been tampered with. DIRO verifies document data directly from the issuing source, preventing the use of fake and stolen documents during onboarding.

Best Practices for Digital Identity Verification

Establishing digital identity verification best practices is vital to optimizing your company’s verification process. Here are the best practices we recommend businesses to follow:

  1. Multiple Verification Methods

A single solution like KYC and KBA isn’t enough to keep fraudsters at bay. Two-step verification is the basic standard across all industries. To increase security and reliability, using multiple digital ID verification methods enhances verification accuracy. 

  1. Stay Up-To-Date With Regulations

Staying updated with regulations is the best way to keep up with digital identity verification. These include KYC and AML requirements. Stay up to current laws and ensure the organization complies to avoid loss and legal penalties. 

Third-party verification solutions such as DIRO document verification help enhance the digital ID verification process and comply with regulations.

  1. Verify Users

Customer verification needs to be part of every step of the customer journey. Not just onboarding but continuous monitoring and transaction monitoring should be implemented.

Fraudsters build perfect synthetic identities to trick the onboarding processes. This is why financial institutions and FinTechs must implement continuous onboarding to monitor customers.

Factors to Consider While Choosing Digital ID Verification Providers

Before finalizing any third-party digital document verification solution providers, there are some factors businesses need to keep in mind. Such as:

  1. Security

Choose a provider with robust security to protect personal information while preventing fraudulent activities. 

  1. Reliability

Legit customers being mistakenly flagged as fraudulent can be incredibly harmful to businesses. Choose a provider that ensures you can verify documents with 100% accuracy and reliability. 

  1. Compliance

Improper compliance and misidentifying regulations are dangerous for businesses. Whatever third-party provider you choose, ensure they comply with all the latest laws, such as KYC, AML, and local regulations, to prevent fraud. 

  1. User Experience

While your primary goal is to avoid fraud and detect fraudsters, providing them with a great user experience is essential. Customers abandon the onboarding process when the process is clunky and cumbersome. 

Choose a provider that can offer a user-friendly solution.

  1. Integration

Find a document verification solution provider that can integrate seamlessly into your current process. Choosing a provider with an easy integration system will reduce the cost of implementation and also improve efficiency.

  1. Scalability

You need a solution that can grow alongside your business. Choose a provider that offers scalability. Make sure that your provider can meet current and future business needs. 

  1. Reputation

Choosing a third-party solution with an excellent reputation and a proven track record can do wonders for your business. Having a solution that offers accuracy and reliability during verification by your side is crucial. 

How DIRO’s Award-Winning Tech Can Improve Digital Document Verification?

Banks, FinTechs, and governments need to adopt newer technology. The award-winning digital document verification technology can help organizations cut costs, smoothen the onboarding process, and improve the overall KYC process. Using the technology, you can make sure to improve customer experience all the while making sure that financial crime is reduced by a lot.

Understanding what is digital identity verification is the first step in making sure banks and all other financial entities keep up with their KYC compliance. DIRO’s innovative technology captures the documents from their original web source to verify whether a document is fabricated or not.

General Verification

How DIRO is Changing the Online Document Verification Landscape?

The rise of digital banking services, ACH payment, and third-party payment providers has changed the face of banking. The needs of customers are an ever-changing concept and to facilitate those needs, the financial industry is trying to offer faster and more secure transactions. To enjoy the benefits that come along with digital banking transactions, banks need to provide better security.

Customers from all over the globe can sign up for digital banking services with strong customer Identity verification solutions. Online documents can help banks and other financial institutions verify customer identities seamlessly and offer security to digital banking procedures. The use of documents to verify customer identities before opening a new account is a very old process. Now that banking has shifted online, so has the document verification process. Verification of online documents is really important for secure digital banking operations. By verifying driver’s licenses, proof of address, utility bills, and proof of income, financial institutions can verify customer identities and reduce red flags.

The FinTech Industry is full of solutions that can offer online document verification. AI-driven document verification solutions aren’t 100% reliable. To bridge the gap between security and transparency, DIRO’s online document verification solution helps organizations achieve that. 

DIRO is an award-winning online document verification technology that captures information directly from the original web source to verify documents. The document it verifies holds a stronger proof of authenticity as opposed to sharing and verifying original copies in person or uploading copies online. Using DIRO’s technology can help you access all banks, utility companies, and government databases with automated user consent and a strong Multi-factor authentication impersonation check.

Some of the major features of DIRO’s online document solution are:

  • Can verify online documents globally.
  • 24/7 live coverage for online document verification.
  • Instant document verification at any time. 
  • 5000+ document types to verify from. 
  • Verified documents can be tamper-proof as documents are provided a Digital fingerprint and uploaded on the blockchain. 

Different Types of Document Verification Methods

The concept of verifying documents for opening a new bank account or signing up for new services is relatively new. There are two types of methods for verifying documents. In the past, banks used to rely on human resources for verifying documents which were slow, tedious, and error-prone.

Here’s a breakdown of types of document verification methods.

1. Manual Document Verification

Verifying customer documents like government-issued identity documents, address proof, income statements, insurance documents, etc. for account opening and signing up for other banking services. Manual document verification relies on human resources to check for details in the documents. Humans can be easily tricked with fake documents created using image doctoring software. 

A business can be easily tricked and harmed by fraudsters using sophisticated technological methods. For humans, there is no way to distinguish between original documents and doctored documents. Manual document verification methods are slow, insecure, and inefficient. 

  • Manual document verification methods are easy to trick.
  • Take up a lot of time and resources for limited results.
  • A slow process that leads to slow customer onboarding.
  • Hard to fulfill KYB & KYC compliance with manual methods.

2. Automatic Document Verification

To bridge all the gaps in manual document verification, automatic or online document verification solutions came into existence. With the right kind of technology banks, financial institutions, and FinTechs can easily verify documents for new account opening and signing up for new services. 

DIRO’s online document verification technology makes it easy for you to verify online documents like driver’s licenses, proof of address, utility bills, student documents, etc. It provides secure, reliable, instant document verification with 100% proof of authentication. The proof of authentication is a court-admissible document with forensic data.

  • Instant document verification for improved customer experience and customer onboarding.
  • Unlike manual verification, you can verify any type of online document globally.
  • 100% proof of authentication. 
  • Captures information directly from the original web source to distinguish between original and fake documents.
  • Provides a digital fingerprint for authentic documents and uploads documents on the blockchain.

What Makes DIRO Different From Competitors?

There are a variety of document verification solutions available in the market, but most of them rely on machine learning and artificial intelligence (AI). Online document verification solutions that are driven by AI aren’t as reliable as claimed. AI-driven document verification solutions can be tricked by fraudsters with a constant feed of false data. AI-based online document verification solutions verify documents by verifying document data. Fraudsters can feed an array of false data that can help to trick solutions into thinking that it’s the real document.

DIRO technology, on the other hand, verifies documents by capturing information directly from the web source. Here’s a comparison of DIRO’s online document verification solution and other verification solutions.

DIROBrand ABrand BBrand C
Instant document verification30-50 seconds for document verificationUp to 1 minute for document verificationUp to 1 minute for document verification 
5000+ types of documents for verification3000+ types of documents for verification3000+ types of documents for verification4500 types of documents for verification
100% proof of authentication No proof of authenticationNo proof of authenticationNo proof of authentication
Verified court-admissible documentsNo court admissible documentsNo court admissible documentsNo court admissible documents
Doesn’t require photos or screenshots for verifying documents. Requires images for document verification.Requires images for document verification.Requires images for document verification.

Conclusion: How DIRO’s Solution is Unique from Others?

Banks, financial institutions, and governments can’t trust photos or screenshots of customer documents as they can be easily doctored using technology. This is the reason why organizations need online document verification solutions that can verify documents instantly, improve the customer onboarding process, and reduce fraud.

DIRO allows customers to provide an original document from any online source like banks, government databases, or private databases for ID verification. DIRO’s innovative solution can be used across banking and other industries.

Blockchain Identity

Identity Verification In Crypto

Cryptocurrency exchanges serve as both magnets for fraudsters and subjects of regulatory scrutiny. To navigate this landscape effectively, it’s crucial to enhance crypto KYC (Know Your Customer) and identity verification tools, striking a balance between fraud prevention and regulatory compliance.

What Exactly is Crypto KYC?

Crypto KYC, or Know Your Customer, represents a legal obligation for centralized exchanges to authenticate user identities. The primary aim is to prevent illicit activities such as money laundering, tax evasion, and illegal funding through cryptocurrencies.

Given the involvement of monetary transactions and pseudonymous digital assets, crypto exchanges are prime targets for fraud and criminal activities. As a result, governments have enforced increasingly stringent KYC and identity verification rules.

However, these requirements are often met with reluctance by both exchanges and crypto enthusiasts. According to a 2019 Coinfirm report, 69% of crypto businesses lacked comprehensive and transparent KYC processes.

Crypto KYC Process in Action

The procedure for crypto KYC is analogous to that in traditional financial institutions, guided by regulations set by government authorities in alignment with the exchange’s geographical location.

Key elements of the cryptocurrency KYC process include:

While these checks can be carried out manually, automation through specialized KYC software is more common. Such software provides a risk-based approach and incorporates identity verification tools. 

In light of anti-money laundering (AML) requirements, combining KYC with AML checks, encompassing politically exposed person (PEP) screenings, sanction checks, and adverse media scans, further strengthens compliance efforts.

The Advantages of Employing Crypto 

KYC Integrating some form of KYC during user onboarding offers significant benefits to crypto exchanges and platforms. These advantages include:

  • Enhanced Compliance

Many jurisdictions mandate crypto KYC as a legal prerequisite within the FinTech sector. Neglecting proper KYC procedures can lead to fines or regulatory issues related to anti-money laundering and countering the financing of terrorism (AML/CFT) laws. 

  • Reduced Fraud

Robust KYC protocols act as a deterrent against various forms of fraud. Gaining comprehensive insights into customers enables monitoring and potential restriction of high-risk individuals. 

  • Fostered Trust

Implementing robust KYC measures instills confidence in customers, demonstrating the exchange’s commitment to adhering to legal standards and safeguarding their interests. 

  • Ecosystem Protection

Crypto KYC plays a pivotal role in safeguarding the financial ecosystem against money laundering, terrorist financing, and other fraudulent activities. 

  • Preserved Reputation

By showcasing diligent steps taken to secure customer assets and accounts, the exchange’s reputation is fortified and protected. 

  • Advancing The Crypto Vision

A robust KYC process can alleviate reservations that potential investors may have about engaging in cryptocurrency, thereby promoting broader participation and mutual benefits. 

Challenges Encountered in Crypto KYC Despite well-intentioned efforts, crypto exchanges face significant challenges in implementing effective KYC procedures.

Here are four key obstacles:

  1. Variety of Fake Id Types

Fraudsters exploit diverse tactics, including synthetic IDs and deepfake technology, to bypass KYC procedures and gain access to crypto exchanges. 

  1. Balancing Friction And Security

Users seek swift access to volatile markets, necessitating a delicate balance between seamless onboarding and stringent security measures to avoid customer churn. 

  1. Clash With Crypto Ideals

While crypto enthusiasts envision the technology as innovative and exempt from conventional financial regulations, regulatory bodies impose distinct standards. Exchanges may need to incentivize users to complete KYC by offering special deals. 

  1. Risk of Compliance Fines

Inadequate KYC checks expose exchanges to substantial fines. Failure to meet requirements can have serious financial implications. Regulatory scrutiny extends beyond crypto exchanges to encompass various crypto-related entities. 

In a notable example, a crypto tumbler faced a $60M fine in 2020 for non-compliance with AML standards.

Effective Tools and Features for Crypto KYC

Automated processes are standard in crypto exchanges’ KYC checks, necessitating the incorporation of the following tools and features within their KYC software:

1. ID Selfie and Video Verification

Modern identity verification vendors offer seamless integration of document verification into crypto KYC procedures. However, it’s important to note that these tools introduce a degree of friction to the user experience.

Additionally, concerns about falsification arise, as fraudsters can manipulate IDs or use stolen credentials. These checks also carry a significant cost, with automated document verification estimated at an average expense of $2 per check.

2. Digital Footprint Analysis 

Digital footprint analysis serves as a preliminary KYC check or an extra layer of security for crypto KYC. It involves uncovering hidden digital and social signals to gain deeper insights into users. Data points include email addresses, IP addresses, phone numbers, browser types, and device specifications. Notable aspects of this analysis include:

3. IP Lookup

Identifies high-risk IPs, potentially associated with harmful activity, suspicious data centers, or VPNs. 

4. Email and Phone Lookup

Flags free email providers and virtual SIM cards, aiding in risk assessment.

5. BIN Lookup

Helps establish card-issuing banks or detect invalid details, contributing to user profiling. By integrating this information and subjecting it to risk assessment rules, a clearer understanding of user risk is achieved during the crypto KYC process.

6. Device Fingerprinting

Device fingerprinting capitalizes on the unique amalgamation of hardware and software attributes within users’ devices. This distinct fingerprint can serve as a key identifier, aiding in identifying connections between accounts. 

The technology also helps identify and exclude bad actors relying on emulators and virtual machines, which are considered high-risk.

7. Blockchain ID Validation

Blockchain technology presents a novel approach to ID verification, offering potential advantages in terms of anonymity, affordability, and efficiency.

For example, HSBC’s successful experiment with blockchain-based KYC in the UAE demonstrates its potential. However, challenges remain, including limited adoption of blockchain KYC and the need for explicit regulatory approval.

8. Leveraging Digital Footprint

Analysis in Crypto KYC SEON’s track record with crypto exchanges highlights the effectiveness of digital footprint analysis in facilitating KYC checks and reducing chargebacks resulting from fraudulent credit card transactions.

Key advantages include:

  • Seamless experience: Real-time data collection via API minimizes friction for users.
  • Cost savings: Digital footprint analysis acts as a pre-filter, blocking low-quality users before engaging in more resource-intensive KYC checks.
  • Enhanced intelligence: The analysis complements manual reviews, allowing for a more comprehensive risk assessment. Users with incomplete digital footprints or obscured online presence can be subject to closer monitoring.

You can explore this approach by entering an email address or phone number below, discovering the depth of insight a digital footprint can provide about a potential legitimate customer.


Understanding Fraud Analytics – New Way to Combat Fraud

Fraud analytics relies on the use of big data analysis to detect and prevent online financial fraud. It can help financial organizations learn about ongoing fraud trends and build safeguards to protect themselves.

More and more people rely on online banking for the convenience it offers. The 2020 lockdown acted as a catalyst for online banking. With the ever-increasing number of users, online financial fraud numbers have also gone up. Out of all types of financial fraud, Account takeover fraud is the most prominent.

With fraud analytics, financial institutions can gain deeper insights into financial fraud, fraudulent behaviors, and how to protect against fraud.

Financial institutions today have to apply robust fraud management measures to ensure their and their customer’s security.

Challenge of Financial Fraud

Financial institutions are obligated to protect their customer’s sensitive information from fraudsters. Over time, keeping information secure has become more complex as customers can access their accounts from multiple channels. Customers can use mobile banking apps, online banking, or call the bank’s customer service to perform financial activities.

This opens up the bank to several risk points. A fraudster could log in using the mobile app with stolen credentials and the bank would have no way to distinguish between a legit user and a fraudster.

It is also becoming increasingly easy for fraudsters to steal credentials. To give you an idea, the dark web has over 15 billion credentials that you can buy for next to nothing.

The average price for banking credentials is as low as $15.43 for a single consumer. If a fraudster wants to buy credentials for an organization’s key system, the average price is $3,139.

Types of Online Financial Crime

  • Account Takeover Fraud

ATO is one of the most prominent types of financial fraud. A fraudster uses stolen credentials to take over an existing online account. The fraudster then uses the account to commit financial fraud.

  • Sim Swap

Sim Swapping is another type of account takeover fraud. In this type of fraud, the fraudster uses a victim’s personal information, to try and convince the mobile company to port the victim’s phone to another number.

When the mobile company ports the number, the fraudster conducts financial fraud and the victim is unaware until it’s too late.

  • Phishing Attacks

Phishing attacks are aimed to target less technically proficient users. This type of fraud happens when a fraudster impersonates a legitimate company/service provider. Then the fraudster sends a text/email to the user asking them for their personal information.

Once a less suspecting victim shares their personal information, the fraud begins.

  • Malware

Fraudsters use several methods to gain a victim’s personal information. This includes trying to trick a victim into installing malicious programs on their device. This malware is designed to log keystrokes, corrupt data, or make the device unusable until the victim pays a ransom.

  • Card Not Present

CNP is becoming more prevalent because of a growing trend of eCommerce shopping. Fraudsters use stolen credit card accounts to make online transactions.

How do Fraud Analytics Help in Financial Fraud Management?

Online fraud is ever evolving and financial institutions need to keep finding new ways to combat fraud. Traditional methods of fighting fraud are not up to the standards. Fortunately, there is a huge pile of data that financial institutions can use to predict and detect fraud. 

Just having a username and password isn’t enough to protect customers and institutions against fraud. When someone accesses, or attempts to access a victim’s information, there is behavioral data that banks can use to verify if this is a legitimate transaction or not. 

Vital data that financial institutions can use to detect fraud include:

  • What device a user is using?
  • If the device has been previously registered with the bank.
  • Can the user verify their identity with a fingerprint?
  • Does the transaction data fit the previous patterns?

These types of data can be broken down into four categories:

  • Knowledge: Something that a user knows, such as passwords, identity information, username, etc.
  • Possession: This type of data signifies something that a user has, such as a mobile phone.
  • Inherence: This is something that a user is, such as a fingerprint, retinal data, palm print, etc.
  • Behavioral: Something that a user does. Any activities that form a pattern, such as their requested transaction, or a series of transactions.

By analyzing these data and combining them with big data, fraud analysts can discover hidden patterns. 

Banks, since forever have been operating on a fixed set of rules that examine requests and provide a yes/no decision. These rules are based on increasing fraud techniques which expands the rules sets and these rules end up becoming too complex. 

Even the most complex traditional rules don’t adapt to hidden or unknown threats. Having systems that haven’t adapted to the latest developments leads to a huge number of false positives.

Machine learning solutions can collect massive amounts of data. These solutions can also analyze heaps of data and assign a real-time risk score for a customer. 

This is how fraud analytics help in detecting and preventing online financial fraud.

ML Models for Fraud Detection and Prevention

Fraud analytics is applying machine learning techniques to financial data. Fraud analysts use machine learning to examine all the valuable data to determine whether the transaction is high-risk or low-risk.

Based on the outcome, machine learning solutions offer recommendations to either allow or block the transaction. There are also cases where multi-factor authentication is needed before approving a transaction.

There are two different types of machine learning solutions. Unsupervised, or supervised. Unsupervised machine learning models analyze unstable data sets to find anomalies in the data. The model can also detect otherwise hidden relationships in the data to suggest a function or instruction set to describe the underlying dimensions of the data. 

Supervised machine learning models on the other hand are trained using labelled data. These models predict the likelihood of fraud. The way to train supervised models is by presenting them with legitimate and fraudulent data and commanding them to analyze the data to develop an instruction set or an algorithm. 

This algorithm is then used on other examples to verify the capabilities of the model. A perfectly trained supervised machine learning model can identify known and unknown patterns. These models are most likely to provide an accurate risk score for a requested transaction.

Data Analytics Techniques to Fight Financial Fraud

Data science is also a part of the solution to fight fraud. Financial institutions collect behavioral, device, and transactional data of every customer. Analyzing this data through a fraud detection system can help in the detection and prevention of financial fraud. 

But the analysis can only be as great as the data available in the data set. If a financial institution has great data available, there are several data analysis techniques that a machine learning-based fraud system can use to fight fraud. 

Predictive analysis is looking at available data and making predictions about the future. Using past events to figure out a pattern and then showcase the potential prosperity for fraud.

Pattern recognition is another data analytics technique that businesses can use to combat fraud. Machine learning models analyze data sets to detect anomalies and identify patterns that are different.

Machine learning algorithms can learn from the data and make predictions for future events.

Forensic analytics is examining the causes and consequences of a financial fraud event. By analyzing the data and relationships between the cause and the consequences, it is possible to identify potentially fraudulent behavior and expose cooperation between fraudsters.


Why Do Digital Business Operations Need Strong Identity Verification Solutions?

The impact of the Covid-19 pandemic has forced businesses all over the globe to reinvent their business operations. With more and more customer interactions happening online, the risk of digital financial fraud and identity theft is rising as well. For businesses to keep up with the digitization of basic work operations, and enhanced risk of fraud, digital identity verification solutions are necessary. Digital identity verification services rely on online document verification technologies and DIRO’s online document verification service can help businesses from online fraud.

KYC Identity Proofing

To fight fraud and accomplish reliable and efficient identity verification, you need the help of the best identity & online document verification solutions. Although incorporating digitization into business operations can make sure that your business can support online customer onboarding and improve other online working methods.

Digitization can also increase your business’s exposure to fraud and financial crime online. Comprehensive digital identity and document verification solutions are vital to make sure that companies can provide customers with a secure digital experience and survive in online fraud markets.

Among the largest banks in the United States, digital banking onboarding has grown from 60% to 72%. With increasing numbers of consumers moving towards digital banking platforms, businesses need to keep up with the increased number of documents they need to verify. Online business verification solutions such as DIRO can verify customer documents instantly with 100% proof of authentication. Utilizing this technology, banks, and financial institutions can improve KYC compliance while reducing friction.

Paving the Way Towards a Smart Economy

As the shift towards digital businesses continues, it is also moving us closer to having a smart economy. Being a part of a smart economy can help organizations to scale their operations globally and improve overall productivity. 

This expected growth relies on the implementation of Digital technologies such as AI, Blockchain, and data analytics. By using digital identity verification solutions, these digital technologies will be even more reliable, efficient, and secure.

Businesses need to provide frictionless transactions to keep customers happy. Online identity verification and online document verification solutions can help financial institutions to provide a fully digital experience for new and existing customers. 

Digital technologies have allowed financial information providers to verify customer identities and verify documents online with a click of a button. By combining these technologies with government and private databases and digital payment aggregators, small and big organizations can create a complete digital experience for customers. While the impact of the pandemic was sudden, the switch to digital ID verification can be done efficiently using these technologies.

Reinventing the Digital ID Verification Process

Ever since the pandemic hit the world, some businesses grew at an exponential pace, while other businesses have failed to cope with the pressure. Instead of trying to get your business back to what it was before the pandemic can be tougher than adopting new digital methods. By choosing a new digital document and identity verification method, businesses can improve their speed, agility, and security. By doing all this, your business will be better prepared for online customer onboarding and following KYC/AML compliance.

Secure and internet-friendly solutions tend to appeal to a wide range of audiences. With the rise of the digital age, more and more customers are facing the risk of financial fraud and identity theft, by employing the right digital identity and online document verification solutions organizations can build brand value. Businesses that embrace online and remote customer onboarding solutions using digital identity verification technologies can close the gaps in their fraud prevention strategy.

Strengthen Your Digital Identity Verification With DIRO

Secure digital identity verification solutions can keep your customers invested in your product and services. Digital identity verification and online document verification solutions can help you scale your business operation.

DIRO’s online document verification technology can help you verify original documents online in real time. This can help banks, financial institutions, and businesses to verify documents instantly and improve the customer onboarding process. The technology can also help you verify identities using online documents such as driver’s licenses, proof of address, insurance information, student records and so much more.

Using the technology, organizations can verify documents and provide proof of authenticity which can be used as original documents as well. DIRO places original verified information on the blockchain and makes the documents immutable.


Marketplace Fraud Trends

Marketplace fraud is as the name suggests. A buyer or seller makes false claims through a company. The fraud could be as simple as making false claims about the quality of products and services, or selling different items as advertised.

An online marketplace provides a platform that buyers and sellers to find one another. eBay is the father of online marketplaces. Launched in 1995, it opened the floodgates for other online marketplaces.

Since then, online marketplaces have grown to offer so much more. Any service or product you could think of, you’d be able to find a marketplace for it.

Marketplace Fraud Trends

At its core, the fraud marketplace can be broken into two categories. Buyer scams and seller scams. You’ll be able to find scammers on both sides of the transaction. 

Here’s a breakdown of the common buyer and seller marketplace fraud trends:

Types of Buyer Fraud

Scams that target buyers are more than common on online marketplaces. Here are the most common types of fraud that scammers use to trick buyers.

1. Counterfeit Goods

Millions want the luxury of expensive goods but don’t have the money to experience the luxury. To match this demand, fake luxury goods are produced in countries like China, Turkey, and others. Online marketplaces face a lot of issues with counterfeit goods.

Customers who can’t differentiate between original goods and counterfeit tend to fall for these scams.

Sellers are extremely good at tricking people into believing that they’re selling a legit item. Customers often fall prey to paying absurd amounts of money for a fake item.

The best way to prevent this fraud is to research about possible counterfeits. There are online forums such as Reddit that have communities that can help you decide whether a good is legit or fake.

2. Non-Delivery Scams

This is another common marketplace fraud trend. The best way to scam a buyer is by selling an item that the scammer never intends to deliver.

There are situations where the seller makes up a fake advertisement and doesn’t have anything to sell. You can probably find photos that look suspicious and the seller may not be able to answer specific questions. 

The best way to tackle this fraud is to always ask for secondary images and images from different angles. You can ask the seller to also send a photo of the product and a piece of paper with your name written on it. 

This is in no way a complete solution as a lot of scammers do have the item in their possession. By making fake listings, sellers can sell a single item multiple times to multiple victims without delivering anything. 

Some ways to spot this type of fraud include:

  • Check reviews and comments. Especially look if anyone has mentioned being scammed by this seller. 
  • Ask whether you can pick up the item in person and pay via cash. If the sellers tell you they can only send it via post, it’s probably a scam.
  • Always be wary of people who want you to pay using cryptocurrencies or use any non-secure payment methods. Apart from cryptocurrencies, look out for international fund transfers, money orders, and pre-loaded gift cards.
  • If the seller pushes you to make the money transfer as soon as possible. And if they try to give some enticing offer to sell you the product as soon as possible, they’re trying to manipulate you into buying.
  • If the seller requests that you communicate or pay outside of the Facebook marketplace, then it is most likely a scammer.

3. Phishing Scams

Phishing scams are one of the most common types of scams you’ll find online. These types of scams can be just as common on online marketplaces as they are elsewhere. 

A phishing scam is designed to steal your personal information to defraud you. To make this type of fraud happen, fraudsters make up a fake listing. These listings can contain links to malicious websites that are designed to steal your data.

The best way to identify phishing scams is when the scammer asks for your personal information. Sensitive information that makes no sense to ask for while purchasing something.

Any sensitive information you provide to the scammer can be used to engage in fraud.

4. Rental Scams

Rental scams are growing at an alarming pace. Scammers make up fake listings for properties, rooms, boats, sports arenas, etc.

Once someone shows an interest, the scammer asks for an upfront payment or deposit to secure the rental. After the buyer makes the payment, they lose their money as there is no rental place/equipment to use.

To prevent yourself from getting scammed, don’t rent on marketplaces that aren’t built for specifically renting services. Moreover, you can ask to see the place/equipment first and pay money in person.

5. Ticket Scams

If you’re on the hunt for tickets to a sold-out Foo Fighters concert, seeking a Lollapalooza ticket, or coming across unbelievably cheap entry to a famous art gallery on Facebook Marketplace, beware of ticket scams.

Scammers are adept at selling counterfeit tickets that look genuine but will leave you disappointed on the night of the event. To safeguard yourself, exercise extreme caution and only purchase tickets from authorized sellers and resellers.

While legitimate ticket touts do exist, selling tickets at a premium, there are just as many scammers peddling expensive forgeries, with Facebook Marketplace being a preferred platform for their schemes. Stay vigilant and follow these guidelines to avoid falling victim to ticket scams:

Purchase tickets only from authorized sellers and resellers.

  • Be wary of deals that seem too good to be true or significantly cheaper than the regular ticket price.
  • Verify the seller’s legitimacy by checking their reputation, reviews, or feedback from previous buyers.
  • Avoid using insecure or non-refundable payment methods like bank transfers or cryptocurrency.
  • Exercise caution with electronic or print-at-home tickets, as they can be easily forged and sent by scammers via email.
  • Cross-check ticket details, including the date, time, venue, and seating information, against the official event information to spot potential discrepancies in the scammer’s advertisement.
  • Compare the ticket’s appearance with an official one to detect signs of counterfeiting.
  • Be cautious of sellers who rush you into making a payment.
  • If possible, meet the seller in person to verify the authenticity of the tickets before purchasing. Trust your instincts and thoroughly assess the legitimacy of the ticket purchase from the seller.
  • Maintain all communication and documentation related to your ticket purchase as evidence for potential complaints.

6. Pet Scams

The pandemic and the rise of remote work have sparked increased interest in pet ownership. Unfortunately, scammers have exploited this trend by creating fake listings for pedigree puppies, kittens, and other popular pets on Facebook Marketplace.

To avoid being defrauded by pet scams, follow this simple checklist:

  • Visit the seller in person to verify the existence of the pet, its health, and the conditions it is kept in.
  • Do not make upfront payments for vaccines or unnecessary charges.
  • Only provide a deposit if you are certain about the seller’s legitimacy.
  • Use secure payment services for transactions.
  • Preferably, pay for the pet when you pick it up to ensure its authenticity.

Seller Scams

Sellers are not exempt from fraud, and awareness of potential pitfalls is crucial to safeguard themselves. Here are some common seller scams:

  1. Payment and Overpayment Scams

Always verify that you have received a payment from the buyer and that it has completely cleared before offering any refund. Use payment methods that cannot be reversed at the last minute.

  1. Returns Scams

Wait until you have received the returned item and checked its condition before issuing a refund.

  1. Electronic Payment Delay Scams

Never allow a buyer to leave with the item until their payment has fully cleared.

  1. 2FA Scams

Avoid sharing your phone number and 2FA codes with anyone you meet online, as they may exploit them for fraudulent purposes.

  1. Phishing Scams

Be cautious of suspicious inquiries and limit sharing of personal information with potential buyers. Use secure communication channels and verified payment methods.

Always trust your instincts and proceed with caution when dealing with buyers or sellers on online platforms like Facebook Marketplace or others. Following these guidelines can help you avoid falling victim to scams.