Category: Document

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Why Are AI-Based Document Verification Solutions Becoming Weaker?

Artificial intelligence (AI) allows computers to make human-like decisions, making certain processes more efficient. AI technology has improved a lot in recent times and it powers a lot of things such as self-driving cars, and facial recognition. Recently, AI has been applied to online identity verification and online document verification solutions. While the incorporation of AI brings in a lot of benefits, AI solutions are slowly falling prey to sophisticated techniques used by fraudsters. AI-Based solutions are slowly failing in comparison to other online document verification solutions.

The Growth of ID-Based Transactions

Banking, healthcare, government, and other industries use ID verification and authentication to verify accurate information about their customers and prevent ID fraud. Digital banking transactions are growing rapidly in correspondence to customer needs, with the rise of digital banking comes online fraud. As fraudulent transactions continue to rise, it is vital for businesses to choose strong document verification solutions.

Most businesses choose to opt for AI-based online document verification solutions. Artificial Intelligence is a part of machine learning which makes it possible to verify and authenticate identities. Machine learning-based solutions keep learning from the data they have access to. This helps organizations to keep track of their performance.

Fraudsters can easily feed wrong data to a bank’s online ID and online document verification solutions which can make them obsolete over time. To keep the AI-based online document verification solutions efficient in detecting fraud, the developers have to keep making changes according to new fraud trends.

Machine Learning for ID Proofing

Machine learning is definitely an efficient tool for differentiating between real and fraudulent IDs. Computer software is constantly learning and correcting itself and can process tons of transactions at a rate that can’t be achieved by humans.

However, IDs are physical documents often affected by wear and tear and may feature manufacturing discrepancies. If the model for failing IDs is based on a few samples, AI-based solutions won’t be able to recognize different types of IDs. This is one of the main weaknesses of AI-based online document solutions.

A blend of AI and Human Touch for Better Solutions

Trained professionals who use AI-based solutions can step in to prevent the failure of AI solutions because a document is torn or worn out. During instances where solutions fail to identify a fake identity, a document expert can check for the mistakes made by a document verification solution. However, the whole point of using an automated solution is to reduce the time spent on human document verification.

The best way to use AI-based online document verification technology is to blend them with a touch of humans. Businesses want to be able to improve the customer experience during the customer onboarding process. A good ID verification solution will help you achieve that, but a weak algorithm-based online document verification solution will just increase the error rate. Fraudsters can easily take advantage of those weak points which leads to identity theft, money laundering, and stealing.

What Makes DIRO’s Online Document Verification Solutions Different?

DIRO’s proprietary online document verification technology takes the document verification process a bit beyond the normal norms. Banks, financial organizations, and other organizations can use DIRO’s technological solutions to verify all kinds of online documents from all over the globe.

DIRO can verify documents like:

DIRO online document verification technology provides 100% proof of authentication. The technology also places online verified documents on the blockchain to make the information immutable.

DIRO’s Technology vs AI-Based Solutions

DIRO’s Online Document VerificationAI-Based Document Verification
Verifies document data by comparing information right from the original web source.Verifies document data using machine learning.
Can verify any type of online document.Can have problems verifying old documents with wear and tear.
Verifies online documents instantly.Can take a few minutes based on the technologies applied.
Can verify documents from all over the globe.Not all AI-based solutions are built to verify online documents from all over the globe.
Provides 100% proof of authentication.Not all AI-based solutions offer proof of document authentication.
Place documents on the blockchain to secure customer information.Requires huge servers for customer information storage.
Can’t be tempered by feeding the wrong data.AI-based solutions are easy to tamper with by fraudsters with constant access to fake data.

Usually, most online document verification solutions aren’t as efficient as they should be. AI-based online document verification solutions, if not used ideally can cause more loss than profits for businesses. DIRO’s online document verification solutions bypass that barrier by being capable of verifying documents instantly with 100% proof of authentication. This leads to increased user experience and rate of customer onboarding.

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6 Relevant Employment & Income Verification Documents

Employment Verification Documents

Sometimes it is not clear what documents are needed to verify an employee. And, therefore, today we will discuss a list of 6 relevant employment and income verification documents that comply with local law. This will make it easier for the employee and the employer to clarify which documents need to be onboarded and verified.

What are Employment Verification Forms?

Employment Verification is needed when a company hires a new candidate and when a lender wants to evaluate an applicant for a new loan. The employment verification helps to make sure that the employee the company is going to hire has held a position in the previous company. This employment verification also helps to sneak a sneak peek into the employee’s responsibility and experience in the previous company.

What is Form I-9?

This document is eligible for each new employee to work in the U.S. Primarily completed by the employer, and this form is mandatory for all the new employees. Form I-9 collects all the documents that are necessary to know an employee’s identity and work state. In the first part of Form I-9, the employees fill their personal information like social security number, name, and address.

And, this form also includes the employer’s proof of an employee’s work eligibility, which is the most important part of Form I-9. There are three categories of documents that need to be completed in Form I-9:

  1. Proof of employment eligibility and identity: This document includes U.S. Passport or Passport Card. Permanent Resident Card or Alien Registration, Foreign Passport with Endorsement to Work via Form I-94 or I-551, and Employment Authorization Document Card.
  2. Proof of identity only (must be combined with a document from List C): Current U.S. Driver’s License, Federal, State, or Local ID Card, U.S. Military Card or Draft Record, School ID Card with Photograph, U.S. Coast Guard’s Merchant Mariner Document (MMD), Military Dependent’s ID Card, Canadian Driver’s License, Native American Tribal Document, and Voter Registration Card.
  3. Proof of employment eligibility only (must be combined with a document from List B): U.S. Social Security Account Number Card, Certification of Report of Birth by the U.S. Department of State, U.S. Citizen ID Card, Native American Tribal Document, Consular Report of Birth Abroad, and Identification Card for the use of Residents of the U.S.

Let’s understand the Employment Authorization Document issued by the Department of Homeland Security:

The employers must maintain a copy of Form I-9 (completed by employees) three years after the hire date. There are serious penalties and imprisonment for any non-compliance and disclosure.

What is an Employment Verification Letter? 

The Employment verification letter is an Employment Verification documents issued by a new employer that works as proof that the new employee has held a role that they’re claiming to have held. The Employment verification letter is also known as the Proof of Employment.

Employment verification letters can be different in content and format, but this letter mostly helps center the dates of employment, employee responsibility, and employee’s job title. 

Additional information to complete the letter are:

  1. The name and address of the firm requesting the verification letter.
  2. A stand company letterhead or employer business address and name.
  3. The form also includes the job title of the former or current employee.
  4. The joining date of former and current staff members.
  5. Include the salaries and bonuses of former and current employees. 
  6. Lists of the employee’s responsibilities.
  7. Employee’s signature, contact information, and name to make it easier for the recipient to contact the employee.

What is an Unemployment Verification Form? 

Suppose an employee is out of his job or terminated from the firm, with no valid explanation. Then, the employee can apply for the support of the State’s Unemployment Insurance. 

The Unemployment Verification Form may differ in each state, but the employees fill them out. 

And, when you are filling out the Unemployment Verification form, this form includes a section that mentions the employee’s total earnings and reason for termination. 

Therefore, the employers can explain whether the employee’s claims are relevant. 

What are Income Verification Documents? 

If an employee is looking for a new line of credit involved in property-lease negotiations and loan organisation, this demands a verified source of the employee’s total earnings. Therefore, you need income verification documents.

What is a State-specific income verification form? 

Most states have their forms for employment and income verification. In some states, the employer confirms an employee’s earning information with the help of Form H1028. This form is used when an employee cannot provide information related to their earnings. 

What is a Loss of Income Form? 

In Florida, they use Form CS ES 2620. This form helps to document the loss of income. Sometimes, an employee may require verifying proof of income loss related to the current or former job, and in such cases, loss of income forms are useful.

What is Paystub? 

In some cases, Paystub can be used as proof of employee earnings. However, the chances of this document being fake are high, and therefore the employer may demand a more trustable form (State-specific forms) like Form H1028. 

Why is it important to complete an Employment or Income Verification Document?

Both employee and employer must keep all the essential documents. This is an essential part of securing documents related to Income and Employment Verification. 

If there is any false disclosure, then the guilty person needs to face imprisonment and penalties. 

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Health Insurance Verification Process: All You Should Know

insurance verification

Verifying patient insurance data has multiple benefits, even though it is an overwhelming task for most institutions. No medical professional wants to deal with insurance as it’s an enormous hassle. It’s difficult to comply with and verifying insurance means going through a plethora of steps. With the rising amount of insurance fraud since the global pandemic, healthcare institutions need to verify insurance documents. The insurance verification process is not at all simple, there are several things involved. Verifying insurance is crucial for hospitals to ensure they can provide the best possible care with minimum fraud.

What Is the Health Insurance Verification Process?

The entire process of insurance verification revolves around a series of steps that check whether a patient can make a reimbursable claim to the insurance provider. The verification process involves multiple parties, which makes the process more complicated. Different patients have different insurance providers, each insurance provider has its own set of rules.

Steps for Verifying A Patient’s Insurance Information

While different insurance providers have different policies, the foundation of steps remains the same. There are three main steps any healthcare institution has to follow to successfully verify a patient’s insurance data.

1. Collect Patient’s Insurance Data

The foremost thing that you have to do is to collect some basic information from the patient as soon as possible. Insurance verification can be tiresome and time-consuming, so the sooner the verification process starts, the better. Lack of time in the insurance verification process leads to error, and that’s the only thing fraudsters aim for. 

It is ideal to ask for insurance information when the patient calls for the first time to set an appointment. Vital data that you should collect initially are:

  • Patient’s name and date of birth
  • Name of the insurance company
  • Name of the primary insurance holder (and their relationship with the patient, if applicable)
  • Patient’s policy number and group ID number
  • Address and phone number of the insurance company.
  • Confirm whether the patient holds any secondary insurance policies (if they do, you’ll need to ask the same questions for every policy)

2. Reach out to the Insurance Company Before the Patient Visit

This is probably the most time-consuming process out of all the steps. The process can easily take 24-72 hours. The ideal scenario is to reach out to the insurance company 72 hours before the patient visits the hospital. Completion of this step will ensure you have all the information you need before the patient walks through your doors. 

A. Contact By Phone

The most common and straightforward way of reaching an insurance company is to just call them. From the information that you’ve got from the patient, it’s easy to find the number of the insurance carrier. 

Once you get through to them, the first thing to do is to ensure you’re in touch with a representative. A lot of insurance providers have contact numbers for hospital admissions and referrals. Once you confirm that you’re in touch with the entity you want to talk to, the representative on the other side will ask you for some information to confirm whether this is a HIPAA-secure exchange. Once you’re through that, the representative will ask for the patient’s information for cross-checking with their database. 

Most of the time, you’ll be able to get through to a representative pretty easily. If you’re unable to get in touch with them, calling at a different time or on a different day is the only solution. 

B. Search Online

Some healthcare institutions don’t have the resources that can sit around the phone all day trying to reach out to a representative. Fortunately, there’s a way to skip telephonic communication altogether and seek out online eligibility checking resources. There’s no one particular source that can act as a gold standard, you may have to go through a series of resources and directories. If the patient has a huge insurance carrier, then chances are hospitals can submit insurance-related questions on the website and verify the insurance data. The top players in the health insurance industry in the USA are “Humana, United Healthcare, Aetna, and Cigna”.

3. Acquire As Much Information As You Can

Let’s say you got through to a representative, it’s crucial that you gather as much information as you can for insurance verification. There are some common questions that you need to ask. Most healthcare institutions have their own set of questions they need to ask for verification. Some common questions are:

  • Can you confirm the patient’s policy number and group number, the name of the primary insurance holder, and the relation of the primary holder with the patient?
  • What is the claims address?
  • Is this policy currently active, and what’s the end date?
  • How many therapy visits does the patient have left this year?
  • What is the patient’s deductible?
  • Does the insurance company require physician referrals, pre-authorizations, and certification of medical necessity for reimbursement? 
  • Are there any specific coverage limitations or documentation required?

The list of questions above are some of the most common questions, however the list increases and decreases based on the insurance type, hospital, and other factors. That’s all a healthcare institution has to do to verify insurance policy for reducing fraud and confirming eligibility. 

Reverify Insurance Every Month 

To stay on top of things and ensure that you’re aware of any changes in the insurance policy, hospitals must re-verify every month. Patients don’t have enough time to remind hospitals of every slight change. It is just a good practice to verify your patient’s insurance plan on a monthly basis.

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Remote Customer Identification in Banking

customer identification in banking

The banking process has been evolving, and the pandemic has forced the banking industry towards digital transformation. While the integration of technology has made some things easier, some banks and financial institutions take things one step beyond. Instead of using normal yet effective identity verification solutions, banks overcomplicate the process with biometrics and other not-needed technologies.

Banks can easily verify the identity of their clients’ using the banking app which comes with an integrated recognition process. While biometrics verification helps prevent the use of fake and forged identities, it sometimes creates too much friction for customers during the onboarding process. The latest technological improvements are improving the banking process and assisting in detecting and preventing fraud early on, but the same technological advancements are also being used by fraudsters. Let’s dive deeper into how technology can streamline the verification process and enhance remote customer identification in banking.

The Role of Technology in the Banking Sector

In banking, not only a person’s data but the security of financial data is also important. The security depends on the type of technological solution the bank is using for remote customer verification. With the rise of countless technologies, the efficacy and accuracy of such solutions are becoming a growing concern.

When the world suddenly went digital due to the Covid-19 pandemic, biometrics and facial recognition seemed like the perfect solution to remote customer onboarding. However, that’s not the case, while it is a fast method, it isn’t the safest one. Banks need to look out for questionable recognition technologies with low precision. Ineffective solutions can increase the false-positive reports that can lead to an increased rate of fraud.

Biometric verification is ineffective, especially at the time of the pandemic. Before using biometrics as a method of identification, the client has to first provide the banks with their biometrics data samples. While this method is reliable, it increases friction during the onboarding process. Biometric verification is more likely to be used in forensic science and terrorism monitoring. 

In Europe, banks have started to consider other methods for remote customer ID verification other than biometrics verification. Apart from using biometric data like access to financial services, banking operations have to be accompanied by additional security checks to ensure bad actors don’t get access to financial systems. Most banks rely on multi-factor authentication or two-step verification. 

To fully shift banking towards digital methods banks and governments need to invest lots of funds as the infrastructure is expensive and includes the installation of equipment for data collection. This is one of the biggest reasons why the use of biometric data was met with huge support as it doesn’t require huge investments. 

As technologies are evolving, banks are trying their best to remove the intermediary from the client/bank interactions. Human interactions are only used to provide customer service, where clients receive personalized support for any problem the bank has. 

Remote customer identification is a vital step for all customer and bank interactions. Even just before the Covid-19 pandemic, banks had physical copies of customer addresses and identity data, and banks needed to make new copies of these documents each time they make a transaction, withdraw money or conduct any transaction. This protected the banks in case the client raised any claims. With the centralization of technology, all this has changed to electronic document management.

Remote Customer Identification in the Banking Sector

The banking sector is undergoing a complete digital transformation, and banks need to use ideal technologies to enhance the remote onboarding process and eliminate fraud.

1. Online ID Verification Solutions

To reduce fraud, banks need to eliminate the use of fake identity data used by bad actors to cause huge levels of financial loss. With online ID verification technologies, banks can verify customer identities with ease. There is no limit to online ID verification tools, but the banks have to choose efficacious tools that can provide genuine results most of the time. 

2. Blockchain Technology

The blockchain serves multiple purposes, including ID and document verification. Blockchain is a decentralized online ledger and information on the blockchain can’t be changed without access. With blockchain technology, banks can verify and manage the ID data of customers. The whole idea of blockchain is to ensure that the data is secure. Customers can authenticate them at government services, banks, airports, and other services with only one identity using blockchain technology. 

3. Online Document Verification

Online document verification technologies can help banks eliminate the use of fake and forged documents. DIRO’s online document verification software can help banks and financial institutions instantly verify documents like proof of address documents, bank accounts, tax return documents, student records, and so on. DIRO can verify 7000+ types of online documents from countries all over the world. The online document verification tool verifies document data from the original web source, thus eliminating any chances of fake documents to use by bad actors.

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Why AI-Based Online Document Verification is the Best Way to Verify Identity and Mitigate Fraud?

ai-based document verification

Showing any kind of proof of identity is vital to complete any kind of legal formality or verification process. No matter what industry a customer is trying to become a part of, be it banking, insurance, healthcare, technology, travel, education, or any other online service, the customer is asked and obligated to present an Identity proof to verify a customer is who they say they are. Verifying customer identities can reduce the risk of identity theft.

Verifying identities may sound great, but as a business, you’ll have to spend money, time, and HR to put secure document verification solutions in place. Extra tough verification process reduces the overall customer experience. While most customers don’t like the extra tough verification process, not having a verification process reduces the trust in the brand and can cause businesses to lose more customers during the onboarding process. 

To find the balance between these situations, AI-based digital document verification solutions are viable, effective, and hassle-proof. Here’s why digital identity verification solutions are important and how it helps financial institutions prevent risks?

What’s the Need for Verifying Customer Documents?

Before we go deeper into how digital identity verification works, it’s important to understand why businesses need to verify documents at all be it using technology or human methods. Online document verification serves two key purposes, it prevents risks like financial fraud and identity theft, secondly, online document verification helps in industry-wide legal compliance. 

According to studies, the total loss incurred due to identity fraud in 2020 was about $16.9 billion. The damages that result from theft of identities don’t just revolve around money, it also involves sexual, racial, and gender-related comments on social media which can cause a lot of issues. 

The covid-19 global pandemic has increased the overall online transactions and digital banking, it also improves the number of digital fraud and identity theft cases which will eventually cause more damage than benefit. To reduce this type of fraud, banks and financial institutions are spending a lot of money on AI-based identity verification technologies.

Difference Between Modern and Traditional Document Verification

Traditional methods of document verification were hectic, and inefficient and it makes a lot of challenges for customers. Before the digital revolution in the banking sector, customers used to visit the brick and mortar branches to get the documents verified for account opening and loan applications. Traditional document verification used to take weeks at the same time. Plus, the results used to be extremely inefficient. Fraudsters make counterfeit documents that are indistinguishable from real documents.

However, conventional ways of authenticating ID documents fail to deliver results that are 100% efficient. There is always a probability of having mistakes in their results. That is why conventional document verification isn’t the best idea while fighting fraud. 

To combat the problems in the manual document verification process, online document verification needs to be used by banks all over the globe. Online document verification technologies that rely on Machine Learning and Artificial Intelligence algorithms can be helpful in combating document fraud. Online document verification technologies improve the odds of verifying customer documents and minimizing the approval of fake documents. And, online document verification can boost the customer experience. 

Regulations and Compliances Necessary to Fight ID Fraud

Businesses and industries can’t work without document verification because it is required by law to follow all the compliances. Countries all over the globe have to follow legal compliances such as KYC (Know Your Customer) and Anti Money Laundering (AML) guidelines that are required by law to be followed by businesses. According to the rules set up by the Federal Trade Commission (FTC), verification of documents can be useful to potential identity theft. Complying with KYC and AML guidelines is not just a legal requirement, it is also an effective and appropriate measure that will help businesses fight all kinds of identity frauds.

Types of Document Fraud

There are several types of document fraud that banks and financial institutions have to face. To perform document fraud, fraudsters use counterfeit documents and they also steal documents. Customers demand instant verification and with so many types of document fraud, it’s challenging to verify documents. Here are all types of document fraud:

  1. Modified Documents

Modified documents are original documents that have been altered, and these documents often come in two different types:

  • Forged Documents: Fraudsters change vital information on documents to conduct ID fraud. They often end up changing variable information, adding real pages from other documents, removing specific pages, applying fake stamps or watermarks. 
  • Blank Stolen Documents: All documents start out as blank pages, when fraudsters get access to these documents they can use them to trick banks. 
  1. Illegal Documents

Forged documents are original documents once, but illegal documents are fake altogether. Illegal documents are of different types:

  • Counterfeit Documents: As the name suggests, counterfeit documents are reproductions of originals. Usually, a fraudster will get their hand on an official blank document and they use the blank document to add in information.
  • Camouflage Documents: There are some things that you shouldn’t have on a document. A camouflage or fantasy document often contains information that shouldn’t be there. This is the easiest type of fraud to detect.

How Does Digital Certificate Authentication Work?

The online document verification process verifies the documents using tools and software all using Artificial intelligence. Just as a human officer examines an ID card/ Identity document confirms customers by matching their face against the document provided. AI-powered document verification tools also verify the identities using a different set of documents. 

So how does the online document verification software work? The process is quite simple and usually involves several simple steps:

  • The digital document verification software is usually integrated with your business’s website and other automation systems. 
  • When a customer logs onto your website for the first time, he or she will be asked to upload a government-issued identity proof in an image format. Most software often provides a live image capture feature for comparison.
  • Once the customer has uploaded the images, the software scans the documents using optical character recognition.
  • The extracted information from the image is then analyzed and verified against the government and private databases. Simultaneously, the document is also checked for forgery and signs of tampering. Usually, the verification of documents takes a few seconds. 
  • If the documents uploaded by the customer are genuine and not tampered with, then the user can sign up with your business. Documents that aren’t authentic are rejected and the customer can’t use the services. 

All the AI-powered document verification services verify documents issued by the government only. These documents include passports, driving licenses, photo ID cards, voter’s identification documents.

What are the Fraud Detection Techniques Used by Software?

Most of the major document verification solutions use three types of analytics to determine if a document is real or not. These analytics are data integrity, visual authenticity, and facial biometrics data. 

  1. Integrity of Data: As you may already know, documents issued by the government come with a set of features. Features such as integrated algorithms, data fields available in multiple locations. AI-powered document verification tools check all data features to make sure that they match.
  2. Document Authentication: The software also checks for any kind of anomalies or signs of tampering in the document. These signs of forged documents include pixel quality, holograms, and incorrect logos, barcodes, and micro prints. 
  3. Facial Biometrics: It isn’t enough to verify just the data available on the document and checking the authentication of the document, software also needs to make sure that the person who has uploaded the document is the actual owner.

All these technologies make the solutions more efficient and accurate in verifying the documents in comparison to manual verification. 

Benefits of Using an AI-Based Document Verification

During customer onboarding, consumers are asked to submit a series of ID documents such as government-issued ID cards, driving licenses, passports. It’s not easy to verify documents manually. That’s why online document verification allows clients to submit a selfie and upload online documents for verification. 

After submitting documents, online document verification software verifies documents online and verifies if the document is authentic or not. DIRO online document verification software fetches document data from the issuing source to verify if the document is legitimate or not. 

Online document verification offers a wide range of advantages including faster turn-around time. It can manage to verify several documents easily from all over the globe, each document with different fraud detection rules and elements. 

Moreover, when businesses use AI-powered document verifications solutions, errors reduce by a drastic number. AI-based solutions are known for detecting frauds and red-flag patterns that humans usually miss out on.

Final Take: Importance of AI-Based Document Verification Solutions

Digital transformation of businesses has been going on for a long time, the global pandemic has pushed the digital transformation into overdrive. To reduce the threats of identity theft and financial fraud, businesses often comply with regulations that end up with complex processes that often push customers away.

As we’ve mentioned above, verifying documents offline can be tough, ineffective and they aren’t sustainable. Moreover, they’re expensive and take up a lot of time. To solve the issues banks face with offline document verification, banks rely on online document verification software. 

AI algorithms and machine learning solutions can help banks, credit unions, financial institutions to identify suspicious money laundering activities. Thus online document verification can be crucial in mitigating fraud, and using AI-based online document verification it is possible to reduce the flow of fraud. 

It is imperative to verify documents without having to reduce customer satisfaction. To successfully do that, AI-Based digital document verification solutions are the best choice. To protect your business against identity fraud eliminates the need for maintaining huge teams. AI-Based digital document verification solutions are the future.

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Detection and Prevention of Sophisticated Document Fraud in 2021

document fraud

In 2020, the world saw the biggest use of fake and stolen documents for illegal activities. One of the biggest reasons for that is the pandemic that caused millions to face unemployment. We live in a digitally connected world and most of our lives are spent using online services. Digital banking, government tax portals, and digital payments have taken up a huge portion of our lives.

That’s why most fraudsters rely on forged documents and try to avoid document fraud detection. To signify the impact of document fraud, it costs more than $3 trillion annually. It is one of the biggest threats the world can face and it continues to grow. That’s why the best document fraud prevention techniques are required.

Different document fraud types are rising in banks and financial institutions since these organizations have to comply with KYC and onboarding information. Fraudsters use fake documents for various reasons and have a huge impact on the economy. They use the documents to apply for loans, purchase new property, make fake insurance claims, and travel to countries illegally.

All industries support the use of official documents for verification and customer onboarding. That’s why businesses must prevent these cases before fraudsters grandly hurt businesses. Investing in document fraud detection and prevention technologies is the first step toward safety.

Document Fraud Cases for Various Industries

The federal trade commission received over 2.1 million fraud reports in 2020. Imposter scams were the most common type of document fraud and the stealing of online credentials is the second most common type. Businesses lost over $3.3 billion in fraudulent cases by consumers and the FTC received over 4.7 million reports in 2020 about ID theft. 406,365 people reported that their information was misused for numerous illicit activities.

Document fraud types differ from industry to industry. Scammers love going for real estate as there are many types of these frauds. Victims face the consequences of false sale deed filings and fight to prevent getting evicted from their homes. Fraudsters claim ownership of the property using fake documents. They then sue the owners which cost them a huge fee to resolve the issue. Application fraud and identity theft make use of fake documents that are either stolen or purchased off the dark web.

Document Fraud Types

To successfully build document fraud prevention, banks, and financial institutions must be aware of document fraud types. This fraud industry is valued at more than $3 trillion and it’s one of the favorite industries of the fraudsters. The most common document fraud types are:

  1. Forged Documents

As the name suggests, forged documents are files that have tampered information in them. It is up to the fraudsters to change the information completely or partially. Some examples of forgeries in documents include adding timestamps, watermarks, adding or removing pages, and digitally changing signatures. These forged documents are usually used alongside fake identities to commit fraud.

  1. Invoice Fraud

This is a common type of document fraud, this is where an employee impersonates a vendor and makes up a fake invoice. Fraudsters then send these invoices to the company that disburses funds directly to user accounts.

  1. Blank Documents

Blank document is another common type of fraud, it can be used to insert falsified information and these type of documents are leaked from the manufacturing supply chain. In blank documents, blank fields can tamper however they want since they are empty and are needed to be verified.

  1. Camouflage Documents

Camouflage documents are fake identities that fraudsters create to trick banks and other institutions into believing they are someone else. This is a rare type of document fraud but it can be hard to detect if an institution is not directly looking for it.

  1. Counterfeit Documents

Counterfeit documents are something that fraudsters build by copying official documents. Bad actors can use these documents to open new accounts, and gain access to additional credentials. One of the most common uses of a counterfeit document is to use someone’s driver’s license to learn about the social security number.

Document Fraud Detection

Manual verification of documents is the oldest method that banks, financial institutions, and other businesses rely on. But as fraud is evolving, manual document verification can’t keep up. Obvious signs can be detected with document verification, but sophisticated documents can’t be detected with manual methods. 

Technologies like DIRO’s online document verification can help businesses to build document fraud prevention programs and detect forged and stolen documents instantly. DIRO verifies over 7000 document types from all over the globe. DIRO can verify documents instantly by verifying the data from the source. The technology also provides 100% proof of verification backed by verifiable credentials to prevent the use of stolen and fake documents. Businesses need to invest in the right technologies to ensure that the documents aren’t stolen or forged.

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6 Things You Should Follow While Verifying Business Documents

business document verification

A business has to have documents that look official, provide accurate information, and can be scanned for verification. The editing and proofreading part of preparing a document is important. Numerous documents can be deemed labeled business documents and they help you maintain a wide range of communication internally and externally. If you’re trying to do business with a company, then you should have a variety of fraud that can follow. Fraudsters usually try to mimic documents to trick organizations out of their money. Businesses or individuals need to verify business documents and look for red flags. 

How to Verify Business Documents?

A business can follow 2 major methods to verify business documents. With improved technologies, it is easy for fraudsters to forge business documents and verify if a business is not trying to trick people. There two main methods of verifying business documents are manually and automatically. 

  1. Manual Business Document Verification

The manual business document verification process refers to the manual verification of business documents by cross verification of data in the documents. Manual verification is a time-consuming process and a business has to hire a team of document experts. While the manual process leaves a lot of room for error, it is used by thousands of businesses around the globe. With the right technology, it is easy for fraudsters to doctor documents that look almost perfect to the naked eye. 

  1. Automatic Business Document Verification

As the name suggests, automatic business document verification uses automation for the verification of business documents. Several technologies offer automatic verification of documents, technologies like DIRO offers instant verification of documents to verify if a business is a fraud or not. Different technologies offer different levels of security and seamlessness for business document verification.

Things to Look Out For While Verifying Business Documents

1. Company Style

Let’s say that you’ve done business with a particular entity before, it is easy to verify the style or tone of the document with previously acquired documents. Regardless of the tone, verify if the sentences are short and written in an active voice to target the intended audience. Compare the tone and writing styles of the documents to ensure that the company voice is consistent. 

2. Review the Document Format

Fraudsters don’t usually care about if the information provided on the documents is correct or not. Your team should check to see if the documents use headlines, subheadings, bullet points, or something distinct in their documents. A business usually follows the same tone and format of the document. As a business, you should verify the document format to look for tiny inconsistencies. 

3. Grammar and Spelling Errors

A good business will not make common grammatical & spelling mistakes. This is one case where manually going through the documents is a good idea. Go through the sentences and paragraph carefully to find errors. Commonly misspelled or misused documents can be used to verify if the documents are coming from the real business and not some fraudsters trying to trick you. 

4. Verify the Document Layout

Another method of verifying if the document is real or not is by running an eye over the document and looking for red flags in the document format. Incorrect margins, justification, wrong text placement, and illustrations are all red flags as businesses don’t make these mistakes. 

If the document contains graphs or charts, make sure they don’t overwhelm the text. You should also verify if the illustrations are formatted properly. If the documents include company logos, make sure it keeps up with business standards. 

5. Confirm the Accuracy of Data

Checking document facts and data is an essential part of business document verification. You should ask for references if you need to verify business documents. Accurate information provided in business documents is essential to a business’s integrity. Based on the nature of the document and the type of company, you may want a business document and the accuracy of the data.

6. Final Proof

Once you’ve gone through every part of the document, all you have to do is to verify the document all over again. Look closely for red flags and any visible mistakes. Your team should verify documents over and over again for finding out any leftover errors. Even the smallest mistake can prove that it is fraudsters who are trying to trick the business instead of business entities. 

DIRO for Business Document Verification

DIRO’s online document verification software verifies documents instantly and provides 100% proof of authentication. Using DIRO, businesses of all scales can easily verify business documents for eliminating the risk of fraud. The technology can verify over 7000+ documents globally including UBO (Ultimate Beneficial Owner) documents. DIRO provides an online verified document with a digital hash, and the result is a document that is court-admissible.

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Is Online Document Verification for Digital Services More Important Than Ever?

why do need online document verification

The process of digitization is growing widely. Even the global smartphone users have reached up to 2.9 billion, and the number is rapidly growing. More and more customers are demanding faster digital services like online banking.

Nearly 40% of all customers are more likely to obtain a particular digital service from businesses they are associated with. Regardless of the industry type, most businesses are trying to provide digital solutions for a better customer experience. The new customer needs and digital services demand businesses to have strong KYC solutions in place to reduce fraud. This is more than just a demand for companies operating in the financial industry. One way to achieve it is by leveraging technologies like online document verification, AI, machine learning, or RPA.

Document verification is an integral tool in the verification of a customer’s identity. Online document verification is needed whether it is for complying with KYC regulations, or it is for account opening. 

In the old days, documents were verified using manual methods, which involved manual cross-checking of document data with other sources. Digital document verification reduces that hassle by verifying customer documents instantly.

Basics of ID Verification

In order to verify customer ID during account opening, a variety of documents are to be verified. There are a number of steps to be followed involved in ID verification.

Here are all the basics of ID verification that you need to know.

  1. Document Verification Stage 1

In this stage of document verification, the account opener is a regulated entity. These include banks, NBFCs, Insurers, security firms, etc. The user then submits documents to the account opener entity. These credentials are then confirmed to reduce the risk of fraud as much as possible. Once the information is verified, the customer is granted access to a certain service or account.

  1. Document Verification Stage 2

The first step is completed when documents are verified, and customers are granted access to services. The first stage of document verification is simple, but the second stage is tough. Most document verification processes leave their customer data vulnerable to stealing of information. Online document verification is the most common method of conducting identity fraud by fraudsters.

How Big of a Threat is Identity Theft?

Identity fraud happens when a person gains access to crucial identity information about a particular person. That information is then used by fraudsters to verify themselves as someone else and commit several frauds. 

The main goal of fraudsters is to use someone else’s identity as theirs and once the verification processes clear them as the person they claim to be, the fraud begins. By assuming someone else’s identity, they can take loans, apply for a credit card or open new accounts and do so much more. But how do fraudsters and criminals get access to confidential information? This information should only be accessible by one person by logic right? So how do fraudsters gain access to them? The answer is simple, large-scale data breaches.

In previous years, there have been a number of large-scale data breaches. A number of big businesses with huge customer records, like T-Mobile, Pfizer, Warner Music Group, Twitter, Zoom, GoDaddy, and others have experienced data breaches in 2020.

To put these data breaches into context, the volume of records exposed online increased by 141%. With more and more companies taking part in the digitization wave due to the Covid-19 pandemic, more customer information online is available. To make matters worse, digital literacy is low and not a lot of people don’t understand how to secure their information. 

The threat of identity fraud is a major concern for the financial industry. Fraud losses are up by 13% in 2020 over $16 billion has been lost to Identity theft in just the last year. In other parts of the world, online fraud consists mostly of cases of identity theft. 

Financial institutions must take preventive measures to protect every step of the information collection process. To fight ID fraud, organizations need to learn more about it and be prepared for it by leveraging strong online document verification technology.

Types of Fraudulent IDs

The rise of technology has led to different methods of generating fake IDs. Fake IDs come in all types of shapes and sizes. The most common types of fraud ID documents are:

  1. Forged IDs

There are IDs on which some information has been changed illegally, to modify the ID document to match the person who’s holding the ID. This could involve:

  • Changing the variable information
  • Inserting real pages from other IDs
  • Removing pages or information
  • Applying false stamps or watermarks
  • Using technology to alter information on an image of an original ID.
  1. Counterfeit IDs

Counterfeit IDs are total reproductions of an entire ID, in which the fraudsters will use a template of an ID document and add fake information to commit fraud. 

  1. Stolen Bank IDs

These are non-personalized bank IDs that fraudsters steal from the supply chain. Fraudsters then add their information to the ID to commit fraud.

  1. Illegally Obtained Real IDs

These IDs are obtained after supplying authorities with fake information. This information could be photos of someone else, fake personal details, or fake verifying documents.

  1. Compromised or Sample IDs

These are legally valid IDs that are available online either as sample IDs or doctored IDs. These IDs are usually obtained by hackers. The most common types of these compromised IDs have been created using information illegally obtained using data breaches or using sellers on the dark web.

Real-Time Document Verification: How it Works?

Real-time document verification uses a number of techniques to authenticate documents for accuracy and user-friendliness. With online document verification, banks and financial institutions can fix their weak points. Banks need to search for the best technological solutions like DIRO’s online document verification. 

DIRO’s online document verification technology captures document data from the original web source. The verification solution offers instant document verification for less friction and a better customer experience during onboarding.

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Why Reliable Digital Document Verification Services are Vital for Business Operations?

why do business need document verification

Digital transformation is at an all-time high and all the organizations are switching to digital methods instead of physical ones. The process of digitization has sped up due to the global pandemic and businesses being forced to operate using online methods. With more and more customer interactions taking place online, the potential for online fraud and identity theft is at an all-time high. For business operations to keep up with the digital transformation and reduce the risk of fraud, document verification solutions aren’t a choice, they are a must-have thing.

To make sure a business, be it a bank, financial institution, and FinTech reduce their risks of fraud, they need the help of document verification solutions for several things.

What Are Digital Documents?

A digital document or an electronic document is a piece of document that is intended to be used in an electronic form or can be printed for use. The development of computer technology has made it possible to use and distribute electronic documents instead of using physical documents everywhere. 

A digital document can be anything, an online proof of identity, bank statements, driver’s license, utility bills, or anything that declares the identity of a person. Digital documents can be used to open a brand new bank account, make transactions and so much more. There are basically two types of document verification, physical and document verification online. Financial organizations like banks and third-party payments providers need to learn how to do digital document verification because manual methods are prone to errors and are time-consuming.

Why Do Businesses Need Digital Document Verification Solution?

Online identities and online documents are becoming the norm nowadays. To make sure these identities and documents remain safe from online attackers and businesses aren’t tricked by these documents, document verification solutions are needed. One great example of a document verification solution is DIRO’s document verification solution. 

1. KYC Compliance

Utilizing a secure and reliable document verification solution is crucial for digitization. Although shifting to digital methods of working can make sure employees can work from remote locations, digitization can also increase businesses’ exposure to financial crime. 

To make sure the transition to online operations goes smoothly, businesses need to employ secure document verification solutions. Sectors like finance and banking are highly regulated and organizations need to follow regulations like KYC compliance to keep thriving. 

With more and more people moving towards online banking and digital banking features, businesses need to find solutions that can help them verify a variety of online documents. During a pandemic, the use of online banking has grown by 15% among all the 4 major banks in the USA. Solutions like DIRO’s document verification solution will help banks, financial institutions follow up with their KYC Compliance. 

2. Supporting a Smart Economy

As more businesses and customers move towards digital operations, we are also shifting to a smarter economy which is favorable for businesses to increase their productivity. This expected growth of business organizations is reliant on the culmination of different digital technologies such as AI, blockchain, and other solutions that can grow your business. With the use of digital document verification solutions, these online technologies will be even more secure. 

Banks need to provide customers with transaction solutions that go smoothly & digital document verification can provide a helping hand to make sure these transactions become as secure as possible from the onboarding process. Digital innovations have allowed financial services to verify customer documents with simple steps. 

3. Changing the Digital Document Verification Process

Since the pandemic hit the globe, some businesses have grown at an exponential pace, while others have almost perished. Instead of trying the old methods to return to their old glory, businesses need to adopt new methods to resurface. By adopting the latest document verification methods like DIRO’s digital document verification, businesses can improve the adaptability, speed, and security of business operations. 

Customers and businesses that are faced with more risk of online fraud today than ever are turning to secure online solutions. According to reports, residents of America 18 years and older have been targeted the most for digital fraud in the last year. Businesses need to adopt secure document verification technology to make sure they can bridge the gap in their fraud prevention methods.

4. Improve Digital Document Verification Solutions

One of the primary reasons for needing a secure online document verification customer is for building trust between brands and customers. Now there’s no limit to online solutions that businesses can adopt to improve their online document verification solutions. Using them, financial services can easily verify customers’ documents without reducing user experience. 

How do DIRO’s Document Verification Services Help In Improving Digital Security?

DIRO’s unique and innovative document verification technology facilitates the verification of bank statements, bank account holder information, proof of address, utility bills, and more. With the use of technology, banks, financial institutions, and FinTechs can reduce their risk for fraud, and comply with KYC and AML regulations all the while improving the customer onboarding experience.

The documents can be verified against the original web source with automated user consent and impersonation checks. Users can verify original documents by logging into a secure browser and getting strong proof of authenticity in seconds.