Digital identity is the information a human has on online platforms. This information may be stored in personal devices, organizational databases, or cloud storage. A person’s digital identity is the collection of his uniquely identifiable information. In the digital world, a user is identified by his usernames that could vary from one platform to another. A person can have multiple accounts on a single online platform. The use of digital platforms in daily households is becoming a norm these days. Mobile phones are mostly used as a communication medium for online activities. As Statista reports, in 2020 there were 3.5 billion mobile phone users. This cause may be the ease of use and reliability on the internet.
The more is the use of communication gadgets, the more will be digital identities. The data security of online users is a crucial task for online platforms. Identity verification can provide security to digital identities. Identity verification is a rolling barrier to identity fraud. Financial institutions are at potential risk of identity fraud. Fraudsters are more likely to target financial channels, to get financial benefits.
The most significant reason for identity fraud is unrestricted access to user’s data. Criminals seek loopholes in the data security system for committing cybercrimes. This initiates when a criminal joins the online ecosystem pretending to be a legitimate user. Identify verification can solve this problem by giving access only to genuine users. Here is an overview of how identity verification works when a user on boards on an online platform:
The user gives his personal data to the website in this stop. Like filing a bioform that includes his name, dob, country, and address.
The data collection varies by business. For instance, banks require financial information and healthcare providers want the medical history of the user.
The documents supporting the above information are uploaded in the form of an image. Documents supporting the identity of the user are:
- ID Card
- Driving Licence
The information from the documents is extracted by using optical character recognition. It extracts data from all types and scripts of documents.
The authenticity of the id document is checked, whether it is issued by the government authority or not. The derived data is verified with the user-entered data. If the data is confirmed then the user is verified otherwise not.
Below are the areas where online identity verification can help:
Identity theft is a cybercrime where fraudsters steal legitimate users’ credentials. Then they open online accounts over that data. This is done to commit crimes on another person’s identity. They transfer or steal funds from bank accounts through identity theft.
Card not Present Fraud
This fraud happens on credit card transactions that are done through email or phone. Fraudsters take advantage of anonymity and complete their purchase without paying anything. The other type is where scammers use stolen or lost credit or debit cards to use them for payments. This is also known as payment fraud.
Identity verification can block identity theft by allowing authorized and genuine users only. Credit card fraud can be minimized by verifying the address of the user and the address associated with the card. The id verification business is forecasted to reach 18 billion in 2027. Identity verification will help businesses to comply with AML and KYC directives. It will give a better online atmosphere and better user experience as their data is more secure now.