Category: Identity

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Identity KYC/KYB

KYC: How Does KYC Complement ID Verification Process?

id verification process

It is crucial for businesses to know their employees and it is even more crucial to know who their customers and clients are. KYC (Know-Your-Customer) is a vital regulation component for any business to reduce fraud. It is a process that helps to identify and verify customers and who they claim to be. 

Especially for organizations that offer their services worldwide and the number of fraud is ever increasing. To mitigate fraud and improve the customer onboarding process, Know Your Customer becomes an important parameter. Out of all online types of fraud, identity fraud is the most common type of fraud. In 2020 itself, FTC received over 150,000 complaints of identity fraud. The number is huge and is on a constant rise, but with the implementation of strict KYC regulations, this can be taken into control. Now that everything is becoming digital, organizations need to rely on online KYC solutions.

KYC Solutions in the Modern Economy

Regardless of the industry type, KYC compliance is essential. The utilization of effective KYC solutions can assist in verifying whether the claims made by customers or clients are legit or not. Verifying the identity of customers is the foundation of all positive and successful business relations. 

KYC compliance helps businesses tackle customer risk, thereby companies can save themselves from potential fraud that can lead to hundreds and thousands of dollars worth of fraud. It also helps in complying with anti-money laundering policies. Moreover, it also helps in maintaining a positive brand image, a better brand image leads to a better user experience. Constant fraud and bad debt records can damage an organization’s reputation. 

KYC compliances are essential for financial institutions, as they can be employed before any kind of lending or online transactions. If we talk about mortgage lending etc, then KYC solutions can help the lenders learn new information about the customer’s job and his/her ability to pay off the loan.

Need for Partnering With Professionals for KYC Solutions

To reduce fraud, financial industries need to tie up with third-party KYC solution providers. It also helps to make sure that companies don’t compromise the safety and security of their business. Third-party KYC solutions providers have ideal solutions that individuals and businesses can employ to comply with the KYC solutions. 

KYC solutions all over the globe utilize national government-issued IDs, advanced technologies, and solutions to scan through and analyze large chunks of data. In the case of B2B services, companies have to ensure that the businesses they are dealing with don’t have a known history of money laundering. Documents provided by customers during the time of onboarding are cross-checked with a variety of databases like government and private databases. 

How does DIRO’s Solution help in Online KYC Compliance?

DIRO’s online document verification API verifies online documents instantly. The technology captures original documents online directly from the source. Verifying online documents using DIRO’s solution is much more secure than sharing and verifying original copies in person and uploading copies of documents online. 

It can help in KYC compliance, reduce onboarding friction, and improve a positive customer experience. The technology can access all banks, utility companies, and government portals with automated user consent and multi-factor impersonation checks.

The utilization of an online document solution from DIRO ensures 100% proof of authentication and the output is a court-admissible document with forensic data. KYC compliance for the financial industry can be completed easily using DIRO’s unique online document verification technology. 

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Identity

5 Trends that Ensure Digital Identity Verification is Crucial in Digital Age

digital identity verification trends

Organizations have been making their switch to digital services for a long time, the pandemic brought a drastic change in the trend. One common change is how we access our financial services online. As most people are looking forward to returning their lives to the pre-pandemic era, digital channels and services are necessary. It is evident that the financial services industry and consumers and businesses alike must now open bank accounts, apply for loans and make payments using online and banking channels.

To make the remote banking processes successful, banks and financial industries need a high level of trust between digital services and consumers. Banks interacting with new and old customers need to verify who the customers are they are in a relationship. Financial industries need to follow through with the KYC (Know-Your-Customer) processes. The compliance has to be met with the local regulations and financial industry’s regulations. KYC verification is the process of verifying an individual’s identity online or in real-time during the customer onboarding process. Here are some of the most common digital identity verification trends that show that digital ID verification is vital in the digital age.

Trend 1: Digital ID Verification Offers Incredible Incentives

Since the rise of technology, Identity verification has always been a key focus for businesses that need to comply with KYC regulations and reduces the risk of application fraud. Typically, ID verification happens when a customer offers a valid ID document during the onboarding process. To complete the remote onboarding process, financial institutions have switched to digital ID verification to enable them to complete the onboarding process securely. It is the first digital identity verification trend that enables online ID verification. 

Since the pandemic hit the world, the investments made in digital account opening have doubled globally. So the desire to digitize has always existed, though strict changes had never been made. 

While the basic needs for digitization remain the same, financial institutions now have a much higher need for digital services. Before the pandemic, a lot of Financial Institutions had partially designed digital ID verification methods.

Trend 2: Enabling Digital Identity Verification Requires Secure and Compliance Regulations

Financial services customers have to be able to open an account or access their banking services, but they also want to feel reassured that they have an ideal level of security to protect customer data. Any service that banks and financial institutions choose will have to ensure the solutions contain security, anti-fraud, data privacy, and compliance requirements. 

When choosing the Digital ID verification solutions, the following requirements have to be met:

  • Cross channel ID verification 
  • Does the solution support document ID in countries, states, and provinces that you want to target.
  • Quality Assurance and Due Diligence.
  • Elimination of paper processes and manual verification.
  • Infrastructure, device, and app security

Not all digital ID verification methods are built equal, and different solutions offer different verification results. Solutions like DIRO’s online document verification verifies online documents instantly for verifying customer data. This reduces friction and improves customer onboarding processes. 

Trend 3: Financial Institutions with Already Enabled Digital ID Offers Better Experience

It is obvious that financial institutions that already have perfect digital ID verification solutions are set up to provide a seamless remote customer onboarding process.

Banks and financial institutions that have a proper digital onboarding channel will definitely onboard more customers as opposed to institutions that don’t have the right digital ID solutions. Banks and other institutions need to pick up the pace to set up ideal solutions in place. Covid-19 has exposed the shortcomings of digital banking services and it has created an urgent need for them to put the right solutions in place. 

Trend 4: Digital Identities Will Become More Common In Various Industries

Not just financial institutions, but other industries also need to verify identities. Governments and healthcare providers are trying hard to set up digital identity solutions to reduce the rate of fraud. In the US, The Coronavirus Aid, Relief, and Economic Security Act allocated $349B in aid to small businesses as a part of the Paycheck protection program. It utilized e-signature technology, which enabled its clients to access relief funds easily and securely while protecting the lenders from fraud. 

In the digital age, there is a constant need for individuals and businesses to access crucial financial relief quickly and without the need for face-to-face interactions. Governments and healthcare institutions are expected to set up solutions that can support the needs of the customers. 

Trend 5: The Pandemic Has Seen a Dramatic Rise in Volume of Online Transactions

Since most people have switched to online services after the pandemic, there has been a huge rise in the overall volume of online and cashless transactions. A variety of fraudsters are taking advantage of the chaos and lack of ideal security solutions for increasing the number of frauds. 

There are reports that in the unsecured lending space, both banks and FinTechs lenders saw a huge surge in lending fraud when Covid-19 was declared a pandemic. Almost all kinds of frauds were done as first-party application fraud, third-party application fraud, and synthetic ID fraud. Financial institutions onboarding remote customers need to be vigilant in their onboarding and online ID verification methods. This is needed to reduce phishing scams and fake websites. This is the last digital identity verification trend that suggests the need for digital ID verification.

Conclusion: Digital Identity Verification Trends

The rules and customer behaviors have changed over time. Companies that can fully digitize their account opening, loan application, and financial product sign-up processes are sure to improve the customer base and a frictionless customer onboarding process. As fraud attacks are ever-increasing, there is a high need of establishing trust between remote consumers and financial institutions becoming more important.

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Identity

International Client Verification: Verifying Customer Identity Online

international customer onboarding

The growth of digital banking platforms and online solutions is the key for businesses to grow by onboarding international customers. Remote international client onboarding costs businesses the most time and causes the most problems. Banks that extend their services outside of their domestic region, tend to lack the resources for verifying customer data. Complicated KYC and due diligence processes with tough technological solutions lead to an increased customer drop-off rate. 

Even if a customer wants to sign up with an international bank, financial institution, or any other industry, a complicated onboarding process is never worth their time. To complete the process, organizations need to employ seamless online ID and document verification solutions. There’s no way to manually verify international customer data, online document verification is the key to online document verification.

Accurate international addresses and document verification help reduce the cost of manual verification of data. Being able to verify international data means lower costs and an improved rate of customer onboarding. Using technological solutions like DIRO, banks, financial institutions, and other industries can verify customer data in an instant while reducing friction.

Why Is International Customer Verification Needed?

A business can quickly expand its business reach by building strong KYC techniques and strategies. Employing efficient online customer verification solutions can improve the international customer onboarding experience.

According to surveys and reports, 1 out of every 10 customers drops out of the onboarding process because of an overly complex process, distrust in the process, or just poor customer experience. Some businesses don’t even try to venture into unidentified markets because of their lack of ideal solutions. 

To broaden the customer base and improve the brand reputation, it is vital for brands to onboard customers internationally. It is not possible to do so without the use of a proper online identity verification solution.

Benefits of Online Document Verification

  1. Lower Friction

DIRO online document verification solution can be integrated with your website, the user can be asked for ID Information right there. It can provide instant results for verified documents. This means, no friction, no hold-up time, and little to no burden for the users. 

  1. Reduce Administrative Overhead

Having your team manually request and process ID documents is a time-consuming process. This manual process can be bypassed if documents can be verified in an instant using the business website. Manual document verification, however, requires too much friction and can lead to errors as some documents may be too sophisticated to distinguish by the human eye. 

  1. Improve Security of Customer Onboarding

Using physical documents or online copies of a document can open your business to the risk of fraud. Most documents that are used for verification are unencrypted and can be seen by others. DIRO’s document verification technology is backed by multi-factor authentication and strong impersonation checks that can reduce fraud.

How Does DIRO Enhance International Customer Onboarding Experience?

Even after the best technological solutions, verifying international customers during onboarding is incredibly tricky. There are a variety of factors that can cause friction during international customer onboarding.

By employing DIRO’s customer onboarding technology, businesses can verify online documents in an instant. DIRO can verify 5000+ types of documents from all over the globe. The technology provides 100% proof of authentication on verified documents. The proof of authentication can be used as a court-admissible document with forensic data.

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Identity

5 Biggest Challenges Faced During Online Identity Verification Process

The whole idea of identity verification has grown past manually verifying each customer one at a time. Just like everything, online technologies have also improved the way the identity verification process works. Verification and management of online customer identities are more flexible than ever. Systems and solutions built especially for online identity verification are crucial to providing authentic proof of identity for accessing and operating in combination with modern banking systems, e-commerce platforms, third-party payment aggregators, and more. Unfortunately, the rise of technology has given birth to the problem with online identity verification.

As AI-based technologies are becoming more streamlined, organizations try to embrace them to reach more people and provide better security. Technology is not only being used by banks, financial institutions, and others, they are also being used by sophisticated criminals. Keeping up with high-security standards and following strict regulations are some of the most common challenges of online identity verification.

Providing smooth onboarding and secure online transactions can be tough. This is one of the most common problems with online identity verification.

Here are 5 Challenges during the ID Verification Process:

Let’s dive into the main and common challenges…

1. Inefficient and Expensive Costly Identity Verification Solutions

As an online solution, online identity verification is still taking its baby steps. Verification of identity comes in multiple variants, and there are multiple methods for how identity is verified. The entire process of verifying identities used to be pretty simple, but as online transactions have grown in both volume and complexity, the process of digital identity verification has expanded into something else altogether.

For unique sources and channels, users are uncomfortable sharing personal information for verification. Basic details like name, address, and government-issued IDs are not good enough to get a complete idea of a person’s identity. To get more personal details about a customer and verify their identity, organizations need to act responsibly and try to bridge the trust gap between technology and trust.

As more and more people enter the identity verification market, and the volatile nature of the industry, the online identity verification process is not stable. This constantly changing market leads to irregularities when it comes to the serviceability and security of identity verification services. 

Businesses that deal in financial transactions are putting in their best efforts to keep up with ever-changing state laws and regulations. These changes in regulations are being done to keep up with the growing data privacy needs. 

To reduce the risks of security breaches and compliance risks, businesses will need to stay ahead of changing industry trends. Organizations also need to understand how to manage confidential data such as customers’ personal information. It is one of the primary problems with online identity verification.

2. Trouble Determining the Accuracy of Identity Verification

Being able to accomplish efficient and frictionless identity verification is the key to building a solid customer base and building trust. To make this happen, it is required to integrate identity verification solutions and engage with large audiences. Fraud prevention using the KYC procedure is extremely important.

To get ahead of this challenge, technology and back-end support have to be updated with time, and using tangible resource investments is crucial to maintaining secure platforms.

3. Data Availability and Management Issues

Cross-referencing even the smallest data point is the most vital part of the identity verification process. This leads to collecting personally identifiable information such as social security numbers. Collecting this array of information is essential for firms, but most customers won’t provide the information as it makes them uneasy. Providing basic information and credit reports can make customers susceptible to risks.

To ensure customers that your organization provides a maximum level of security and risk management. Organizations must provide users with control over data collection methods and how they use personal details for online verification.

To accomplish high security and service standards, companies will need to search for solutions that can provide them with online databases. To do comprehensive identity verification, personal information needs to be cross-checked on these databases.

4. Complying with Data Protection & Privacy Regulations

With the sudden increase in the application of online identity verification, the requirement to comply with regulations is also becoming strict. Organizations will have to keep up with the ever-changing rules and policies. 

While digital technologies are huge enablers of customer-friendly services, this is also leading to concerns about data security. International standards and regulations are catching up with technological advancements and providing a helping hand in protecting data. 

The GDPR came into existence in 2018, since then it has been a guiding system for regulated companies. Similar to GDPR, Anti-Money Laundering Directive 6 has been the central framework for fighting money laundering and terrorist funding. 

These regulations are extremely vital for industries like online gaming, dating, and gambling sites. Usually, these sites contain age-restricted content, and digital identity verification regulations protect minors from financial crimes and identity theft. Not being able to comply with regulations makes it one of the primary challenges of online identity verification.

5. Improving Digital Trust & Customer Experience

Customers can rely on several digital banking services in the current system. High-risk transactions, malicious data collection, and not user-friendly databases are enough to ruin the experience for both new and old customers. Establishing trust in the market and ensuring a high level of trust is crucial to building a long-lasting business operation. Not being able to improve the customer experience is one of the biggest online identity verification problems.

Digital identity management data is based on fighting for the right solution for the users and extending a hand in data management. Online identity verification services need to be built, to make sure that the needs of the customer are being fulfilled. Unless firms learn how to improve customer experience this will remain one of the main online identity verification problems.

How does DIRO’s Document Verification Technology Assist In ID Verification?

The online identity verification landscape is in its first steps, and it is riddled with challenges. For banks, financial institutions, and organizations to verify identities online, it is required to get past those challenges.

DIRO document verification API can verify documents instantly and capture information right from the original web source. Verifying documents is the first step in verifying customer identities. Verified information is placed on the blockchain, which makes the documents immutable and secure.

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Identity

How eID Verification Improves Client Onboarding for Banks and FinTech

It can be very time-consuming for individuals or business owners to take time out of their day to visit banks when they prefer to interact with their Financial institutions online. In this article, we will discuss the benefits of eIDs and streamlining cross-border transactions and how they can improve the client onboarding process. The big challenge for banks and FinTechs is to verify documents to prevent fake and stolen when onboarding new clients. This challenge is common across mortgages, auto lending, or purchases that you may need to start a new business.

Customers who work night shifts can find the limited opening hours of the bank and other financial institutions frustrating. Let’s say you want to sign a document, but you work during the opening hours of the banks. This presents a real challenge and the way to solve it is through more online services.

There are a lot of steps involved in loan approval and the process can easily be delayed while waiting for the customer’s signatures. This waiting period can lead to the bank or financial institution losing the client and makes the entire process inefficient. Instead, if banks can conduct verifications online it could be very beneficial to the customer. This can help especially during cross-border transactions. Online eID verification can reduce the need for customers to travel to distant locations to provide signatures. Whenever document verification can be done online, it can improve the overall level of efficiency.

However, to achieve this, banks and other financial institutions need to put security measures in place. Both the individual and their bank would have to start with an online identification process to ensure that people are who they claim to be. This is where online document verification and European regulation such as eIDAS come into play.

What is eIDV?

eIDV (electronic identity verification) uses publically available data and private databases to verify documents for verifying a person’s claim to whom they say they are. eID verification utilizes personal information like name, DOB, Social Security Number, and address among other types of data. The result of an eID verification could result in the person claiming who they are, a partial match of identity, or a fake or stolen identity.

eID verification is used by banks, brokerage firms, credit card companies, lending, money transfer, and mortgage companies to minimize the risk of financial fraud, and comply with KYC, AML, and CFT regulations. Other sectors that use electronic document verification are:

  • Insurance companies
  • Governments
  • Online gaming 
  • Lawyers
  • Employers
  • Job recruiters 
  • Real estate agents

Use of eIDV in Financial Institutions

Electronic identity verification matches the data that is offered by users to banks and other financial institutions. This information can include name, date of birth, address, and Social Security Number against multiple databases available online.

  • Personal documents can be used as a source of document verification. These documents can be driver’s licenses, passports, birth certificates, and citizenship certificates.
  • Several databases can be used for eID verification such as public and proprietary, credit bureau data, government databases, etc.
  • Data that can be used as a source of verification by financial institutions can include address, postal data, property ownership data, credit bureau data, utility data, government data, etc.

Advantages of eID Verification

There is a certain cost associated with verifying the identity of a person, but it can be much less expensive in the long run to avoid the risk of doing business with individuals who use fake and stolen documents.

eID verification can detect fraud by verifying the passport provided by a customer to verify if a customer is real or not. eIDV can also be used to verify the identities of potential customers and if they are on the international watchlist, politically exposed people list, or on some other lists that can make them a potential risk for banks and other financial institutions.

Electronic identity verification can not only be used to verify documents and customer identities but can also be used to stay up to date with your existing customers. Businesses pay more money for eID verification services that can cross-check databases to authenticate documents and identity.

Why Should Financial Institutions Switch to eIDV?

Electronic identity verification services come with a lot of benefits. Banks, financial institutions, and FinTechs used to spend a lot of time and money verifying identities and documents using manual methods.

With the rise of technology, financial institutions can step away from the collection of POI (Proof of Identity) documents. They can instead conduct this using electronic identity verification by cross-checking information provided by customers during the onboarding process.

eIDV for a Speedy and Secure Customer Onboarding

Using eIDV will improve the customer onboarding process by gathering all the relevant information. The success of electronic identity verification solely relies on cross-checking the data from all available public, private, or government databases.

All the information must match up properly, for example, the name on the customer’s credit card should meet with other documents and the address provided. This improves data security and saves banks and financial institutions from fraudulent applications. To do this ideally, banks and other financial institutions need to have access to billions of data records globally. There are technologies out there that can provide secure eID verification online all while complying with KYC and AML regulations.

How DIRO’s Technology Can Improve the Customer Onboarding Process?

DIRO document verification technology can be used by banks, financial institutions, and FinTechs to verify documents of any kind. DIRO’s technology can capture original documents from the original web source and it can be used to prove whether a document is authentic or not.

Banks, financial institutions, and Fintechs can with user permission access all banks, utility company data, government databases, and private databases and cross-check documents with automated user consent and strong impersonation checks. Using DIRO’s document verification technology, users can access all:

  • Online utility companies for verifying proof of address.
  • Verify personal Online bank data.
  • Online insurance companies to verify coverage.
  • Online government portals for proof of income, tax returns, and more.