What Is Identity Proofing & How To Streamline It Through Smart Solutions

Last updated on June 23rd, 2022 at 04:24 am

Every day, we interact with numerous online applications for various reasons, and each one of them wants to know about and some more. This way, they can serve us better by keeping tabs on our behavior while using those applications. Id verification is used to ensure that we are who we say “we are”. Some applications and online services carry out identity proofing before letting us use the system.

Conventionally, online identities revolved around knowing usernames, email addresses, passwords, etc. Now, it is more complex than ever, and all the more complex is to ensure that there is actually a fraud on the other side of the worldwide web interacting with a system.

What Is Identity Proofing?

In a nutshell, identity proofing is a process in which one concerned party verifies the identity of another, to ensure that the entity is what it claims to be. This is not a one-time, static process because it continues in many shapes and forms as long as two parties are in contact via the internet. 

Initially, it includes producing valid documents and other support material to create an immutable link between claimed and actual identity. Later, it can only be limited to using online usernames and passwords to let users into the system to perform any transaction.

The ultimate rationale of erecting such security roadblocks is to ensure there is no illegal use of the platform. It is mandatory for KYC verification to meet the regulatory guidelines by establishments, such as banks, credit unions, etc.

Identity Proofing Vs User Experience

Only those who have been stuck in the long immigration lines can understand the true cost of traveling to exotic places and interacting with new cultures. Before boarding the plane, a passenger has to go through several checks and examination posts. All this hassle is to ensure that the person who was issued the visa is actually getting on the plane. That’s why frequent travelers often feel burned out and consider all this identity proofing a fuss.

Companies always strive to improve user experience through tweaking services according to the individual preference of a user. Long queues and processing time frames affect the user experience resulting in customer dropouts, poor investment returns.

How To Make It Efficient

Firms are not happy about the friction between onboarding clients while observing regulatory guidelines to prevent monetary fines and reputational losses. There is a dire need for streamlining identity proofing. Since manual monitoring is slow and costly for verification of compliance, Artificial Intelligence has stepped in these shoes and proved to be a great successor to human intelligence in KYC compliance operations.

Here are some ways AI can help in onboarding incoming clients without ruining the user experience.

Remote Biometric Recognition

Remote facial biometric recognition has been widely adopted across a wide range of KYC- and AML-complied industries. It allows users to go through identity proofing without physically visiting the concerned facility. They use their smartphones or other camera devices to complete KYC verification.

Modern biometric scanners employ AI algorithms to scan subtle features that are exclusive to an individual, such as face geometry and irises. What makes it secure and desirable is that it does not rely on static, two-dimensional photographs, but verifies a live subject in front of the camera. This seamless and hassle-free onboarding ensures compliance while retaining the user experience.

Document Verification Through OCR Technology

OCR (Optical Character Recognition) technology allows the conversion of paper-based documents, either handwritten, typed or scanned, into a machine-readable format. It is a handy tool for organizations to verify documentary proof of a client’s name, address, social security number/ ID number, etc.

In addition to picking up vital information from a document, the latest OCR scanners can also verify the authenticity of the concerned document in real-time, using AI-based tools. This cuts short the verification time from hours or even days to merely a couple of seconds.

KYC Video Verification

Organizations often have to obtain explicit consent from an individual to align their practices with regulatory guidelines. KYC video verification is a system where an individual records a live video clip in the system while displaying express consent for a specific purpose, such as opening a bank account remotely. Swift KYC video verification relies heavily upon smart screening tools with 3-d depth perception and liveness detection.

The Way Forward For Smart Solutions

Identity theft and fraud are still one of the top concerns for organizations and their clientele. The increasing frequency and intensity of cyberattacks along with the adoption of innovative tools by hackers make it necessary to fortify the systems and practices concerned with identity proofing. The industries across the board have shown immense interest in the development and usage of smart solutions based on Artificial Intelligence and Machine Learning to ensure processes and operations get securer and smarter with each passing day.