Impact of Identity Verification for Digital Onboarding

Identity verification for digital onboarding has never been more vital. The number of online enrollments and transactions that underpin modern business processes continue rising at record paces—but the frequency, complexity, and variety of fraudulent activity have only grown likewise. 

In 2022 alone, malicious fraud attempts skyrocketed by 122% across numerous categories, from account takeovers to synthetically crafted identities that are notoriously difficult to catch.

Secure digital onboarding provides the essential first-line defense, pivotal in combating malicious identity fraud. In this post, we’ll examine why implementing enhanced identity authentication in remote onboarding processes is fundamental and how it can be accomplished without forcing users through cumbersome steps that sour them before relationships even start.

The role identity verification plays in digital onboarding

Digital onboarding mirrors traditional onboarding in requiring a customer to fill out forms and provide official identification, such as their driver’s license or passport, to open a new account or start a new service. 

The difference? It’s performed remotely from a laptop, desktop, tablet, or smartphone.

Without physical interactions, robust ID verification has become a linchpin of security, trust, and compliance. Indeed, research indicates that 80% of global consumers favor businesses that employ identification measures, whether a financial institution, social media platform, or healthcare organization. 

Preferences aside, businesses need to be certain customers are who they claim to be. This is imperative not only during customer onboarding but throughout the relationship. Further, by legitimizing customers swiftly, securely, and accurately, the digital economy can continue to grow and flourish.

Benefits of effective identity verification

You may still be asking, what is digital identity verification? Put simply, it refers to a series of processes and technologies that validate a user’s authenticity in the digital space.

The advantages of a strong approach are legion. Incorporating powerful, data-driven identity verification methods may diminish fraud, as strong ID verification is fundamental to fighting financial crimes. 

Bad actors who have gained access to an individual’s Personal Identifiable Information (PII) may use it during digital onboarding (and after) to:

  • Open false accounts
  • Conduct account takeovers
  • commit other forms of fraud

Failing to accurately certify a user’s identity can also lead to synthetic identity theft and the devastating financial losses and reputational harm that often arrive with it. Advanced identification verification works toward mitigating this while further facilitating risk management. 

  • Improve regulatory compliance: Financial institutions and other regulated industries are legally mandated to perform in-depth ID verification under anti-money laundering (AML) and know your customer (KYC) regulations. Adopting the most cutting-edge KYC ID verification strategies can help shield your organization from often catastrophic penalties and boost your reputation.
  • Enhance customer satisfaction: Fast and frictionless digital onboarding is one of the most critical phases in the customer journey. In fact, as many as 68% of consumers have stepped away from onboarding because of frustration. Yet, consumers also want to ensure their sensitive information is safe from data breaches and fraudsters. Leveraging best-in-class identification verification solutions helps resolve this; importantly, it cultivates trust and confidence in consumers and elevates their entire experience.

Technological advances in identity verification

Traditional methods of identity verification typically centered around heaps of paperwork and manual checks—tasks that are now widely deemed time-consuming, cumbersome, and susceptible to human error. In the digital realm, the process evolved to include equally exasperating undertakings, such as knowledge-based authentication (KBA) and passwords (which are mere speedbumps for fraudsters). 

Fortunately, technology has radically strengthened and transformed digital verification. Automated identification authentication accelerates digital onboarding and enriches operational efficiencies, and it may also help maintain data integrity

A few of the chief identity verification trends include: 

  • Biometric authentication, which confirms a customer’s identity through unique traits like fingerprint scanning and facial recognition 
  • Document-based identity verification, which scans government-issued forms of identification against immense databases to verify identity (and, in the banking sector, a customer’s risk potential) 
  • Blockchain technology which eliminates the need to rely on third parties for identification verifications and bolsters security 
  • Artificial intelligence (AI) and machine learning (ML) utilize algorithms to detect even the slightest alterations to proofs of identification and flag signs of forgery

Best practices for implementing identity verification

A secure, sound, and successful online identity verification process requires:

  • A multi-layered approach that calls upon the latest technology to guarantee a user’s identity
  • A balance between security and the user experience (UX) can be accomplished with an easy-to-navigate interface and clearly communicated instructions
  • Ongoing monitoring of your identity verification processes to ensure their efficacy and maintain compliance

Microblink’s contribution to secure digital onboarding

With more than 3 billion IDs scanned per year Microblink represents the leading edge of advanced document verification. We offer AI-powered solutions to revitalize your identification verification in digital onboarding strategy, including:

  • Real-time on-device processing that can be performed without Wi-Fi
  • Barcode scanning and extraction
  • Auto-capture
  • Screen and photocopy detection
  • Face tampering technology

Provide your customers with a seamless onboarding experience with Microblink’s BlinkID Verify and safeguard your business’s assets, regulatory standing, and reputation while you’re at it. How? By booking a demo today to get started.

May 30, 2024

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