The Importance of ID Verification in the Business Sector

As the trend for digital transactions is increasing with time, ID verification is of significant importance to curb the cases of identity theft in the business sector. As per FTC, around 1.4 million cases of identity theft were reported only in the year 2021, which is expected to increase over the years. Therefore, it’s crucial for all businesses and financial institutions to take preventive measures to prevent fraudulent activities. However, companies can make it possible by implementing strong customer ID verification strategies.

What is ID Verification?

ID verification refers to the procedure that businesses opt for the identification and verification of users’ information and identity. During customer identity verification, businesses ensure regulatory compliance for the validation of identity. Identity verification services help companies analyze the risks associated with potential clients. Critical businesses, for example, healthcare companies, banks, financial companies, and other legal bodies, use identity verification systems to ensure customer authentication.

Online ID Verification Methodologies 

Most businesses use the following methods for the validation of identity:

Multi-Factor or Two-Factor Authentication

Multi-Factor Authentication, MFA, is a verification system that requires its customers to give two or more factors for verification before gaining access to the system. For instance, instead of giving instant access with a password to the company's system, this ID verification system additionally gives a unique OTP (One Time Password) for every login session. This multi-layer security system allows businesses to safeguard themselves from cyberattacks and other reputational or financial losses.

Biometric Analysis of Customers

Biometric systems are of significant importance in the authentication of IDs. It’s a customer authentication process according to biological characteristics, i.e., fingerprints or facial features. Analysis of customers’ fingerprints or facial features allows businesses to perform a digital ID check. Moreover, this ID verification system ensures high security as it’s not easy to steal biometric data.

Online Global ID Verification

This ID verification system utilizes the technology to determine if a national ID issued by the government belongs to the same user. Various AI-based techniques, including biometric analysis, human review, or computer verification, are used during online global ID verification. 

Knowledge-Based Verification

This ID verification system authenticates the customer’s knowledge regarding the data they are providing. Businesses or companies that utilize this method require the clients to answer a precise list of security questions. Users have to answer certain questions, for example, “What is your favorite fruit?” as these kinds of questions are virtually impossible to steal.

What are the Benefits of ID Verification?

Following are the benefits that businesses enjoy because of ID verification:

Prevention from Fraud

The primary benefit of an identity verification service is to prevent businesses from fraud. An effective ID check significantly allows financial companies to safeguard themselves from financial crimes, including corruption and money laundering.

Effective User Experience

With the recent advancements in the IT sector, companies are shifting from manual paper verification to digital verification systems globally. Since digital identity verification ensures a swift customer onboarding process, it provides an improved experience to its users. Businesses can improve their client retention and customer experiences through a smooth application process.

Prominent Market Reputation

Every business wants to enjoy a good market reputation. Therefore, it’s significant for all businesses including financial organizations and the e-commerce sector, to build a friendly and trustworthy relationship with customers. However, businesses can conveniently work to maintain a healthy relationship with their customers by securing the data and information they provide. For instance, an organization’s strong identity verification system indicates its credibility and indicates how careful any business is regarding the well-being of its customers.

Transaction Monitoring

The benefits of Identity verification are not merely confined to enhanced security. Instead, it also helps businesses and financial institutions identify and report suspicious transaction activities. Moreover, businesses can also identify and capture other details of customers, including geolocation and IP addresses. It helps organizations identify the individual behavior of customers and determine the validity of transactions.

The Bottom Line

ID verification plays a vital role in the business sector, particularly in the digital age where online transactions are prevalent. By implementing strong customer ID verification strategies, businesses can effectively curb cases of identity theft and fraudulent activities. Moreover, the use of advanced verification methods helps ensure the authenticity of customer identities. By prioritizing digital ID checks, businesses can maintain the security and integrity of their operations.