Maintaining economic resilience in the financial sector requires effective ID verification services, particularly as the global biometric authentication and identification market is set to reach nearly $100 billion by 2027. This significant growth was driven by a compound annual growth rate of 14.6% from 2019 to 2027. It underscores the critical role that advanced ID verification procedures such as document verification, biometric authentication, and knowledge-based authentication play in safeguarding financial transactions. Implementing these sophisticated verification methods enhances security and bolsters customer trust and regulatory compliance by ensuring the stability and resilience of the financial sector in an increasingly digital world.
The Imperative of Online ID Verification for Financial Sector Stability – Fighting Against Identity Impersonation
In today’s digital world, online financial services are being affected due to increased fraud, identity impersonation, and monetary losses. Criminals are accessing users’ credentials and utilizing them to deceive financial institutions by doing terror funding and money laundering. Therefore, in this digital realm, the success of financial institutions really depends on ID verification services, as customers can be detected as authentic or fake in real-time according to their profile risk scores. ID verification services can be conducted in two ways: traditionally or digitally. Traditional ID verification services are executed through physical means using labor power and are time-consuming. Meanwhile, digital verification services are executed using advanced software and tools such as machine learning algorithms, virtual scanners, artificial intelligence, etc. Some of the most utilized methods for verify ID online are given below:
- Document Verification
- Biometric Authentication
- Knowledge-Based Authentication (KBA)
- Two-Factor Authentication (2FA)
- Database Checks
- Address Verification
- Phone Verification
- Email Verification
- Social Security Number (SSN) Verification
- Video Verification
- Liveness Detection
- Device Fingerprinting
Use Cases of ID Verification Services for Diverse Objectives
ID verification services play a crucial role throughout the customer onboarding process as they assist enterprises in controlling financial threats, identity impersonation, and compliance risk at the initial stages. Integrating the KYC procedures and other related identity verification online protocols brings positive value to financial organizations in handling vast relationship stages. Some of the highlighted ID verification procedures are given below:
Account Opening
Financial account opening is the first step in banking departments to check the user’s legitimacy as a part of the onboarding process. The system verifies the user’s credentials against official documents issued by the state government, which should match the name and face identification and authenticate the document’s validity. It majorly decreases the happenings around stolen or synthetic identities and also fosters confidence in the new customer’s intentions.
Accessing Finance
To access financial gains, businesses should check user identities in real time by authenticating credentials before releasing funds. In some extreme cases, a financial institution might be interacting with a customer for the first time, like when someone is applying for a mortgage from a lender they don’t usually bank with. Other times, the customer might be familiar with the lender, but the request for money could still be fraudulent if the account has been taken over by someone else. Whether it’s verifying a new customer’s identity when they open an account or re-checking existing ones, identity proofing at this stage can significantly reduce the chances of funds being stolen.
Electronic Funds Transfer
During electronic funds transfer, users conduct large transactions that lead to monetary scams such as terror funding and money laundering. Therefore, integrating the factors of multi-factor verification and re-verifying users before and after the fund’s transfer can mitigate the potential imposters in real-time and report them to authorized officials for taking strict legal actions against them.
Service and Support
ID verification services help customers and provide support assistance to make sure that they provide assistance to authentic users. A lot of disruptions happen during transaction conduction; for that purpose, users call for help from service providers for things such as password resets, customer support operations, account termination, and other related conflicts. Verified identity can access these services on time without any disruption. Meanwhile, the service provider also gets the authority that they are dealing with legitimate ones.
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Championing Customer Welfare
The broad group of activities, such as opening saving accounts and managing and updating wealth and investment plans, are all included in keeping the customer’s well-being up-to-date. During executing these tasks, ID verification services are proven as genuine because they assure that this assistance is only given to legitimate ones, which protects the relationship between the customer and the financial institutions.
Final Verdict
ID verification services propose its application across diverse sectors due to utilizing technological advancement software. The advanced employment of methods and processes for identifying fraudsters in real time has streamlined the operations of enterprises and assisted in maintaining the system’s integrity. In this digital era, the integration of verification solutions in the system helps maintain reliability and deter fraudulent activities in real time.
