ID and Document Verification

Top 6 Identity Verification Methods

February 21, 2024
Top 6 Identity Verification Methods

In the digital world, establishing trust hinges on the ability to verify identities, ensuring that people are who they claim to be online. As cybercriminals become more sophisticated, secure identity verification methods become increasingly vital. 

Social media and other platforms are now grappling with the need to verify user identities to curb misinformation and protect minors. Innovative solutions like video selfie verifications are also being adopted to prevent financial scams. As digital interactions evolve, we need to leverage AI-driven solutions to maintain the integrity and security of our online identities.

What is identity verification?

Identity verification is a critical process that confirms an individual’s identity to a high degree of certainty. This process is essential, especially when interacting with financial institutions, accessing secure services, or complying with identity verification regulations.

In essence, digital identity verification is a technique that validates personal information against authoritative sources to ensure that a digital identity matches a user’s real-world identity.

The identity verification process involves several steps: collecting identity information, checking that information against trusted databases or physical documents, and often requiring a real-time action or biometric check to confirm that the person providing the information is the legitimate owner of that identity. This digital identity verification method has become foundational in the fight against fraud, ensuring that only authorized individuals gain access to sensitive data or services.

Identity verification processes are underpinned by stringent regulations, particularly in sectors like banking, healthcare, and government services. These regulations require that institutions have robust systems in place to prevent identity theft and other types of fraud. As such, identity verification techniques have become more advanced, incorporating AI-powered tools to provide accurate and efficient verification.

What is identity verification used for?

Identity verification is utilized across a multitude of sectors for various critical functions. In the financial sector, it’s used to onboard new customers, perform credit checks, and prevent financial crimes like money laundering and terrorist financing.

For online platforms, identity verification data is used to ensure users are of appropriate age, as seen with Instagram’s AI, to verify minors’ ages, and to build trust among users by confirming that people are who they say they are.

Beyond compliance with identity verification regulations, businesses employ identity verification to safeguard their operations from fraudulent activities. 

Verifying identities is crucial for businesses to prevent losses from unauthorized transactions. A frightening statistic backs this up, revealed in a recent study, that data breaches continue to take a heavy toll on many businesses, whose losses due to online payment fraud totaled more than 40 billion US dollars in 2022.

But it isn’t just about protecting your interests—the customer experience is also important. Identity verification methods play a significant role in the customer onboarding experience, allowing your users to quickly and securely access services, enhancing customer satisfaction and loyalty.

Identity verification extends to sectors like telecommunications, where it’s critical for activating SIM cards, and healthcare, for securely accessing personal medical records. In essence, identity verification processes are the foundation upon which secure, trustworthy, and regulated transactions are built in our increasingly digital world.

1. Document-based verification

Document-based verification is the basis of customer identity verification, particularly in banking sectors where stringent KYC procedures are in place. 

This method typically involves using ID scanning software to capture, extract, and verify information from physical identity documents, such as passports and driver’s licenses. These documents serve as a reliable data source, as governmental authorities issue them, and contain a wealth of information that can be cross-referenced for authenticity.

Passports, for instance, are universally recognized identity documents extensively used in international travel and financial dealings. They contain security features such as watermarks, holograms, and machine-readable zones, which can be authenticated using digital identity verification systems. Bank-grade ID scanning software is particularly adept at parsing these complex documents; it can capture and check the document against global databases to confirm its legitimacy.

Driver’s licenses are another common form of identification, especially within specific country borders. These documents not only certify one’s ability to drive but also serve as primary identity proof. 

Verification systems can read the barcodes and magnetic stripes that many driver’s licenses include, extracting data for verification purposes. This is critical for customer identity verification in banking, where confirming a customer’s identity accurately is paramount.

Verifying identity documents doesn’t stop at passports and licenses; it extends to a diverse array of national IDs, each with unique features based on the issuing country.

Id scanning software is engineered to handle a wide range of identity documents, recognizing and validating them regardless of where they are from, thus providing a global solution. This is particularly crucial in today’s interconnected world, where customers can engage with financial services from around the globe.

AI-powered digital identity verification systems are a leap forward in this field. They not only capture and extract data but also perform checks in real-time to verify the authenticity of the documents. 

2. Knowledge-based authentication

Knowledge-based authentication (KBA) is critical in safeguarding digital identities and is often part of a comprehensive identity verification strategy. This method assumes that certain information is known only to the verified individual.

Security questions are a traditional form of KBA where users are required to answer personal questions that, in theory, only they would know the answers to. Common examples include queries about one’s first pet, the street they grew up on, or their favorite teacher. 

The effectiveness of security questions hinges on the assumption that the answers are not easily discoverable or guessable by others. While this method can provide an additional layer of security, it’s also susceptible to being undermined by social engineering or through information that may be publicly accessible on social media platforms.

Personal information checks involve verifying the identity of a user by cross-referencing the personal information they provide against authoritative databases or records. This can include date of birth, social security number, or the details on an identity document. 

While a recent statistic reveals that KBA is extremely popular—a whopping 52 percent of businesses stated they use security questions as their main security factor—it has its drawbacks. Social engineering and phishing attacks can be used to discover a user’s answers to security questions, breaking any security they might have provided.

Companies that prioritize digital identity products focus instead on scanning and verifying identity documents themselves to confirm the authenticity of personal information. This approach not only enhances the user verification process but also assists in mitigating payment fraud.

3. Two-factor authentication

Two-factor authentication (2FA) is an indispensable security measure that significantly bolsters defense against identity fraud. By requiring two distinct forms of identification before granting access, 2FA ensures that even if one factor is compromised, unauthorized users are less likely to gain entry to a user’s account or sensitive data. Essentially, 2FA acts as a critical barrier, deterring identity theft and safeguarding online identities.

At its core, 2FA is about adding an extra layer of security that goes beyond the traditional username and password. It’s important because data breaches can crack or expose even the strongest passwords. 2FA mitigates the risks associated with compromised passwords by ensuring a second, separate form of verification is in place, making unauthorized access significantly more difficult for cybercriminals.

One of the most common 2FA methods is the SMS verification code. Upon attempting to log in, a user receives a text message with a unique code that must be entered in addition to their password. While convenient, SMS-based 2FA is not impervious to phishing attacks or SIM swap fraud, so it’s essential to consider more secure alternatives.

Authenticator apps generate time-sensitive codes that users must input during the login process. These apps, such as Google Authenticator or Microsoft Authenticator, provide a more secure alternative to SMS codes because they’re tied to the user’s device rather than their phone number, reducing the risk of interception or phone-based attacks.

Biometric 2FA is the most advanced form of two-factor authentication, leveraging unique biological traits such as fingerprints, facial recognition, or iris scans to verify identity. It’s inherently personal and nearly impossible to replicate, offering a high level of security against identity fraud. With the rise of AI-powered solutions, biometric 2FA is becoming more prevalent and accessible, as seen in the increasing integration of such technology into smartphones and laptops.

4. Credit bureau-based authentication

Credit bureau-based authentication methods are critical tools financial institutions and other businesses use to ensure individuals opening a bank account or engaging in transactions are indeed who they claim to be. 

These methods cross-reference the personal information a user provides with the data held by credit bureaus, which comprises credit histories, loans, credit card information, and other financial details. While not a foolproof method, confirming the accuracy of details like a person’s name, address, and social security number against a credit bureau’s vast database can help companies substantially reduce the risk of fraud and identity theft.

The authentication process often includes additional checks, such as knowledge-based authentication, where users are required to answer personal questions that presumably only they would know the answers to based on the information in their credit profiles. 

For example, when attempting to access or open a bank account online, a user may be asked to answer questions about their previous addresses or loan amounts pulled from their credit file. 

This method not only secures the process but also creates a seamless user experience by allowing legitimate customers to quickly pass through authentication checks while flagging or blocking fraudulent attempts.

5. Database methods

Database methods for digital identity verification rely on accessing and analyzing information from various databases to confirm an individual’s identity. 

Digital identity verification methods encompass a range of database checks, including public records, proprietary databases, and online information. These methods are often used with document-centric approaches to verifying identity, where documents like passports or driver’s licenses are scanned and analyzed for authenticity.

One of the key aspects of database methods is the capacity to quickly and efficiently sift through vast amounts of data to validate personal details against known and trusted sources. 

For instance, an individual’s name and photo might be cross-referenced against a government database to ensure the person attempting a transaction is the rightful owner of a digital identity. These methods are crucial when verifying the authenticity of provided information is paramount, such as when enrolling in new financial services or setting up online accounts.

6. Biometric verification

Biometric verification leverages unique biological patterns to identify and authenticate individuals. It’s a security paradigm often AI-powered, ensuring that identity verification processes are accurate and efficient. Typically, this process works by analyzing biometric data so that systems can provide a level of personal authentication that is difficult to forge or hack.

Fingerprint recognition

Fingerprint recognition involves scanning and mapping the distinctive ridges and valleys on an individual’s fingertip. This biometric data is then converted into a digital format, which a software application can compare against stored fingerprint records to verify an individual’s identity. 

The advantages of fingerprint recognition are its relative ease of use, widespread acceptance, and the uniqueness of fingerprints, which makes them a reliable identifier. However, limitations include potential issues with dirty or worn fingerprints, as well as concerns with privacy and the security of stored fingerprint data.

Facial recognition

Facial recognition technology captures a person’s facial features, such as the distance between the eyes, nose width, jawline shape, and other distinctive traits. These measurements are converted into a mathematical formula, and AI-driven algorithms compare this data to a database of known faces to find a match. 

Facial recognition has various applications, from unlocking smartphones to identifying individuals in crowded public spaces. However, concerns regarding facial recognition include privacy issues, the potential for misuse, and algorithm biases that can lead to inaccuracies, especially across different demographics.

Iris scanning

Iris scanning technology uses unique patterns in the colored ring of the eye surrounding the pupil—known as the iris—to identify individuals. High-resolution cameras capture an image of the iris, and specialized software analyzes over 200 points of the iris pattern for verification. 

This method is renowned for its high level of security due to the complexity and uniqueness of iris patterns. Security considerations with iris scanning involve ensuring the data storage is secure and the scanning equipment is protected against tampering or misuse.

Ensure reliable identity verification

The top identity verification methods—document-based, knowledge-based, two-factor authentication, credit bureau authentication, database methods, and biometrics—are pivotal in the ever-evolving landscape of identity verification. 

Many of these methods leverage AI-driven technology to ensure the secure and efficient handling of identity documents. As cyber threats and fraudulent activities adapt and become more sophisticated, the importance of staying updated on the latest trends and technologies in identity verification grows alongside it.

Identity verification solutions must be robust and user-friendly to support seamless customer experiences. Companies must integrate identity verification services that combat fraud and foster trust and convenience for users. With the digital space expanding, a cutting-edge identity verification solution is imperative for businesses to protect their operations and customers’ data.

Microblink steps into this dynamic environment with a suite of identity verification solutions, BlinkID and BlinkID Verify, that are AI-powered and designed to fit seamlessly into nearly all identity verification processes.

Our identity verification solutions are built to save companies time and money, streamline the customer onboarding process, and drive customer engagement, all while scaling alongside the evolving needs of businesses. With a focus on digital identity products, we are committed to providing the best experiences for our customers and their end-users. Our technology is crafted to detect and deter identity fraud effectively, ensuring a 50% reduction through our document-centric verification approach.

At Microblink, we believe in harnessing the power of AI to enhance everyday experiences—whether that’s opening a new account or verifying an identity document for service activation. We are dedicated to working with companies as passionate about delivering exceptional customer experiences as we are. 

Built by people and used by humans, Microblink is your partner in navigating the future of identity verification with confidence and innovation.

Integrate ID document scanning into your existing application today

Continue reading

Find more thoughts on the industry insights, use cases, product features, trends in AI, and development processes.

What is identity documentation verification and how does it work in finance?
ID and Document Verification

What is identity documentation verification and how does it work in finance?

August 31, 2023

Identity document verification ensures the authenticity of presented documents, which helps to mitigate the risk of fraudulen…

Upgrade your UX with ID document scanning for web browsers
Technology

Upgrade your UX with ID document scanning for web browsers

February 23, 2023

How easy is it for your customer to start utilizing your product or service? In an age with no abundance of time, no shortage…

Microblink’s top 5 blogs of 2022

Microblink’s top 5 blogs of 2022

December 28, 2022

What a year it has been.  For both our Identity and Commerce business units, 2022 was highlighted by growth, innovation…

Identity Document Scanning product updates – November 2022
Product Updates

Identity Document Scanning product updates – November 2022

November 22, 2022

Find out what’s new in the v6 release of Identity Document Scanning, and how the updates empower your solution and delight yo…

Blue in the face: Twitter’s vexing verification raises identity issue on social media
Social Media

Blue in the face: Twitter’s vexing verification raises identity issue on social media

November 17, 2022

In the Twittersphere, the term “verified” has progressively taken on a meaning of its own. It was back in 2009 when the socia…

Document Verification product updates – August 2022
Product Updates

Document Verification product updates – August 2022

August 10, 2022

Here’s a quick overview of all new features and supported documents in the latest version of Document Verification. Our…

Identity Document Scanning product updates – July 2022
Product Updates

Identity Document Scanning product updates – July 2022

July 31, 2022

We’re super excited to announce a new-better-than-ever version of Identity Document Scanning with 50 new identity docum…

Security by Design Meetup Recap
Technology

Security by Design Meetup Recap

May 21, 2024

Discover insights from the panel session on security by design and best practices. This blog post is a recap of our highly su…

How to Enhance Your Fraud Detection in Banking Transactions
Fraud

How to Enhance Your Fraud Detection in Banking Transactions

May 13, 2024

Digital banking has completely revolutionized how we manage our transactions and accounts. However, with the ease and conveni…

Understanding Today’s US Online Gambling Laws
Online gambling

Understanding Today’s US Online Gambling Laws

April 26, 2024

Online gambling has been a popular pastime since its inception, but it soared to substantial new heights during the pandemic…