Verification of Identity Documents – An Efficient Way to Eliminate ID Fraud

KYC, tech

When companies hire new candidates using inadequate document screening, it puts their finances and security at risk. Moreover, the candidates can access the company’s finance and security sections.
A company should not be quick to trust a new candidate as they might damage its reputation and leak confidential data. Therefore, verification of identity documents is necessary to implement the limitations on records related to IDs that firms are applying for in the hiring process.

Understanding Documents Check

Document and identity fraud are among the most significant issues in the world. Most people use fake identities and documents to leave their countries and get their dream jobs. This practice also allows them to hide from law enforcement institutions.

Document frauds include

  • Drug and Human Trafficking
  • Terrorist Funding
  • Bank Fraud

According to a survey, the United States of America had to face a loss of USD 9.62 billion in 2019. Thus, businesses must do proper planning to deal with these problems. Though the implementation of technology helps catch fraud and other suspicious activities, fraudsters are always inventing new ways to circumvent these systems.
As a result, many government and private corporations face billions of dollars in losses, data theft, and bad reputation every year.

Although the introduction of different laws and methods goes a long way in preventing document fraud and theft in multiple countries and organizations, regardless of their size, AI and machine learning implementation further enhance these methods. Hence, online document verification has helped many companies lower fraud chances.

What are Digital Document Checks?

Online ID checks are defined as the digital inspection and verification of documents remotely. Traditional identification methods include physical presence, passports, utility bills, and driver’s licenses. ID is required. These typical procedures are time-consuming, inaccurate, expensive, and slow for customers and service providers. In contrast, the following areas saw better results from document verification checks than from manual document check techniques:

  • Customer Experience
  • Fraud Detection
  • Consistency
  • Accuracy
  • Availability
  • Time
  • Cost
  • Document tamper detection
  • Scalability

Know Your Customer (KYC) Procedures

Knowing your customer refers to the proof of a customer’s identity. Moreover, it is the determination of fraud risks they may face by financial institutions or other organizations. By requiring KYC, businesses can stop financial fraud, smuggling, and other crimes like drug and human trafficking. The following phases are a part of the KYC:

1. Document Validation

An online identity check service involves authenticating the address and identity of the customer using official documents like ID cards, utility bills, or passports. Financial institutions must identify or verify documents as a requirement of global regulators like FATF, reducing the likelihood of fraud.

2. ID card verification

The system stores the consumer’s confidential details during this process. The system will then upload a copy of the ID card for comparison with the data already on file. If the information on the ID card matches what is already on file, the customer is objective; otherwise, they are a fraud.

3. Face verification

The facial recognition system identifies the customers by scanning their faces. It compares the ID card’s image to the user’s face. The system recognizes a face as accurate if its features match those on the ID card; otherwise, it acknowledges it as fraudulent.

ID Verification Process

The document verification process makes it possible to verify authentic documentation with thorough ID checks. Verification based on artificial intelligence helps financial institutions to prevent fraudulent identities and documents. Its accuracy is so high that it can capture the minor try of forgery in any pixel of an ID document. The online KYC document verification method checks the micro prints, holograms, MRZ code, and fonts. Clients can simply verify themselves by uploading ID document images like passports or ID cards from their smartphones or laptops.

Why do Financial Institutions Conduct Document Checks?

The majority of fraudulent activities occur in financial organizations, especially banks. Moreover, banks use online document checks that eliminate fraud risk. Everyone must now present original ID documentation while opening a bank account.  The checking methods of banks or other financial institutions require

  • ID cards
  • Biometrics
  • Utility Bills
  • Passport

In conclusion, Fraud activists always seek to steal someone’s identity to achieve their nefarious goals, hence, Verification of identity documents authenticates that the person is who they claim to be. For this purpose, the system goes through multiple procedures, such as ID verification, facial recognition, and document verification.

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