Identity Verification (IDV)

 

As trade and financial transactions become more seamless across the world, businesses and financial institutions expose themselves to the high risks of fraud and financial crime. Increased regulations also place the responsibility upon business to verify the identity of the customers and entities dealt with. However, the process can be cumbersome and costly – a bottleneck in an era of instant onboarding and real-time transactions.

An Identity Verification service, however, executes the same work of validating identities at a fraction of the time and cost.

What is identity verification?

Identity Verification is a simple and secure service provided by a vendor, to verify the identity of an individual in a few easy steps.  It verifies the identity documents of a customer for authenticity, and validates that they are indeed who they claim to be.

It is an instant, always available service, that processes information in real-time. The software’s API checks identity details against trustworthy data sources of identity information. Any images uploaded are not stored, and all information is encrypted; thus providing a highly secure platform. Such Identity Verification Services also meet the key compliance directives, including KYC, AML/CTF, GDPR, and PSD2 directives.

Both, the costs of manual verification, and security risks using intermediaries, are eliminated.  False positive and negatives are minimal, thus ensuring business is not lost. As multiple touchpoints are averted, time and money are also saved.

How does it work

STEP I. The software captures the front and back faces of the identity documents.

STEP II. Data is extracted from the documents and then verified in real-time using cutting-edge technologies.

STEP III. The validation process:

a) Makes sure that the ID documents are genuine (not fake, or forged), and valid (with respect to dates).

b) Verifies that the person holding or submitting the ID proof and documents is the same person as shown in the ID.

c) Conforms with the compliance regulations as applicable in the country and industry.

How Identity Verification is core to the KYC process

The KYC process is a necessary part of customer onboarding. Regulated businesses (like money remittance services, financial institutions, insurance companies, gaming, bullion dealers, real estate, and luxury car dealers), have to verify customers at the time of onboarding. KYC documentation not only authenticates the credentials of the customer, but also helps maintain a verified customer database. Any true positives during the KYC validation, helps the business or institution to avert potential fraud, scam and loan default. Any possible scenario of being used to launder money for illicit activities is also averted.

The world over, banks are facing billions of dollars in losses every year because of inefficient or incomplete KYC process. The result is financial crime and non-performing assets (NPAs). All of this can be avoided by using an automated Identity Verification Service that takes care of the document and ID verification in real-time.

The importance of Identity Verification in AML/CTF

As every regulated business is aware, a standalone KYC is not sufficient to mitigate the risks of financial crime. This is specifically true for businesses handling high-volume and cross-border transactions; or dealing with clients in high-risk regulated industries. A regulated business or institution is mandated to continue with an ongoing customer due diligence process, to ensure the customer does not use the business as a channel for crime or fraud. Identity verification of entities involved is, however a simple and seamless process, that helps to maintain the necessary regulatory compliance and prevent financial crimes.

Use cases

– KYC onboarding
– AML/CTF compliance
– Cardholder not present check
– User authentication
– Fraud detection
– High-risk or high-value transactions
– Instant insurance policies
– Quick loan disbursements

MemberCheck provides a comprehensive one-stop solution in Identity Verification services in real-time, across Australia, New Zealand, and China.