Identity verification is becoming important for every industry due to the increase in criminal threats. Fraudsters use fake information to act as imposters and reap illegitimate benefits. For instance, medical identity theft in the healthcare sector, fake profiles in financial institutions, and fraudulent purchases in the e-commerce industry. All of these lead to a lack of regulatory compliance and reputational damages.
Therefore, industries require authentic ID verification solutions to restrict criminals’ access and onboard legitimate customers. Where fraudsters are using advanced methods, industries also need to take out the traditional way of verification. AI-powered solutions here are the industries’ go-to reliable options. This blog covers why digital solutions are better than traditional methods and how they help businesses.
Digital VS Traditional Identity Verification Methods – Which is Better?
Technological advancement is bringing various changes in businesses’ operations. Financial institutions are moving toward digital banking and e-commerce is enabling customers to make payments by scanning their faces. However, all of these shifts are also raising criminal threats. They forge documents by using photoshop and bypass the identity verification process. In these scenarios, manual verification can not be trusted. The next section provides differentiation between the traditional and digital verification methods.
The face-to-face verification methods involve the physical presence of customers. The manual verifier schedules a meeting with the end-users and they bring along their documents in paper form. The verifier then records the data and cross-verify it against the electoral registers commonly. This process involves high chances of inaccurate entries and human error in verification.
Online Customer Verification
On the contrary, online identity theft protection solutions speed up the process while eliminating the chances of human error. The customers can simply upload photos of their documents by using their devices. Depending on the business’s preference, the system asks for further information like a real-time selfie. Moving on, the digital synthetic identity fraud prevention tools ask for voice recordings to add further accuracy. This way customers won’t have to visit the offices for manual verification. Shufti Pro Funding indicates that this also eliminates the chances of discrepancies.
Benefits of Online Identity Verification Services
As evident from the previous argument, traditional verification is losing its worth because it is no longer competing with sophisticated criminal methods. This is why digital threats require online combating solutions. The AI and ML-powered identity authentication solutions are capable of detecting criminal efforts. Industries using these services can further avail the following benefits:
Minimize Chances of Non-Compliance Fines
Regulatory authorities are imposing strict regulations on global businesses to verify their customers by accurately validating their information. For instance, the respective business should ask for full name, birth date, and proof of address. It should further cross-check this information within the global databases. Traditional methods here fall ineffective here as it takes a week to access the information available worldwide.
On the contrary, digital solutions allow businesses to access these databases in minimal time. This helps the industries to ensure compliance with Know Your Customer (KYC) regulations and minimize the chances of hefty penalties. As of 2021, the non-compliance fines crossed $937.7 million. Therefore, businesses should employ robust verification solutions to escape these fines.
Reduces Operational Costs
As per Shufti Pro News, another reason why businesses are vesting less trust in traditional methods is due to the cost it involves. Manual verifiers are hard to afford as they charge a hefty amount as their fees and that too with chances of error. Furthermore, manual methods of customer verification take a long time span which creates enough room for criminals to illegitimately onboard platforms.
Therefore, industries prefer digital biometric identity verification systems. This is because it accurately verifies customers by analyzing distinct human features and detecting liveness. This helps businesses save more resources with guaranteed accurate results.
Mitigates Criminal Activities
Industries lacking robust customer onboarding solutions are more likely to face an increase in fraud risks. Criminals use advanced methods and easily trick the verification methods. However, with accurate checks in place, industries can mitigate the chances of fraudulent attempts. It will help industries to retain a trustworthy reputation and acquire a huge user base. This will not only help businesses to enhance customer satisfaction but also provide enough security to retain them.
Since digitization is changing the landscape of businesses’ operations, it is giving rise to various other threats. Criminals take advantage of loopholes that manual verification leaves and reap illegitimate benefits. These risks not only expose industries to reputational damages but also increase the chances of hefty penalties. However, incorporating digital ID verification methods will help industries combat criminal threats in time. It verifies customers accurately in real-time, secures businesses’ operations, and provides a smooth customer onboarding process.
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