Essential Things You Need to Know About Identity Verification

identity verification

Identify verification is a critical component of businesses involved in financial instruments, monetary services, as well as real estate. Companies that belong in industries such as hospitality services, tourism, and airlines also benefit from this process.

If you happen to be a business owner and have plans in moving your services online but do not have any idea about identity verification, you have come to the right place. Below are the essential things you need to know about this process.

What is Identity Verification?

Identify verification is also known as “identity proofing,” according to an article by Idology. The process is used to confirm an individual’s identity remotely through digital means. Identity verification is beneficial for business owners that serve their customers over the internet as it gives them the ability to validate personal information, automatically.

Documentary Verification

Documentary verification is one of the significant stages in the process of identity verification. A customer provides a particular document such as a passport, driver’s licence, or other government documents, which are then checked electronically regarding its authenticity.

Documentary verification is a significant stage because it establishes the validity of the details from the submitted documents. Some of these details may include full names, home or work addresses, and birth dates.

Non-documentary Verification

Some institutions, such as banks or loan agencies, require that customers or clients have good standings in society before doing any transactions with them. This is why it is essential to know particular details about a specific client or customer to avoid risks.

Non-documentary verification is another significant stage in identity proofing. In this stage, customer data is checked through other databases such as credit institutions, government agencies, and media sources.

Media sources for non-documentary verification may include traditional news media, databases of international organisations, blogs, and even social media websites. This stage can be done in minutes, through the electronic verification process.

What is the Significance of Identity Verification?

There are a couple of reasons why identity verification is considered significant, which include the following:

Know Your Customer (KYC)
Through identify proofing, you can verify your customers in a couple of minutes; this means you will be avoiding the risk of fraud because the process ensures the validation of the authenticity of submitted documents.

Anti-Money Laundering (AML)
Money laundering is a crime, and doing transactions with money launderers can lead to fines, punishments, as well as unwanted consequences. Your reputation as a business could be negatively affected if you have transacted with money launderers even if the process was involuntary.

You and your business can get penalised by the government because of inadequate compliance regarding identity verifications.

Counter-Terrorism (CT)
Identity verification processes are platforms designed for reporting certain entities. This means through electronically verifying particular individuals; you will be able to help the authorities in the search for malicious terrorists.

Transaction Restrictions
If your e-commerce business involves the distribution of age-restricted goods such as tobacco and alcohol or has services catered to adults, then identity proofing is a must.

Identity verification helps in verifying that your customers are of the legal age to purchase your goods or services; this drastically reduces the date of birth fraud and helps you avoid consequences for not following regulations.

Regulations concerning data breaches, money laundering, and counter-terrorism, to name a few, should not be taken lightly. This is because when these regulations are not followed, it can lead to costly fines and grave business concerns. Identity verification provides a solution for businesses to implement a critical process that adheres to legal guidelines.