Data compromises nearly doubled between 2020 and 2022, sending shockwaves through the financial sector. That escalation isn’t just a statistic—it represents countless individuals who had their sensitive information exposed, shaking their trust in digital platforms.
In 2022 alone, the United States recorded 1,802 data compromises, affecting over 422 million people. Behind these numbers are businesses grappling with the financial and reputational fallout of these incidents, and at the heart of it all often lies a poorly implemented identity verification solution.
Now, more than ever, businesses need identity verification solutions to fend off fraudsters. Make the wrong choice, and you could face security issues and hefty regulatory fines.
In this article, we’ll walk you through the nuances of digital identity verification, discussing why it’s crucial, what benefits it brings to the table, and how to overcome challenges in its implementation
What is an identity verification solution (IDV software)?
Identity verification is validating an individual’s identity to ensure they are who they claim to be. In its digital form, identity verification becomes crucial to any secure online ecosystem.
An identity verification solution (or identity verification software) is a tool that automates this validation process, leveraging advanced technologies to authenticate a range of identifiers, such as government-issued ID cards, biometrics, or even social media accounts.
Why use identity verification software? What are the benefits?
The benefits of using an identity verification solution go beyond simply confirming someone’s identity. Here’s a rundown of the top benefits you’ll notice by integrating this software into your organization:
- Enhanced security: It goes without saying that better identity verification solutions fortify your organization against cyber threats. In short, they protect you and your customers.
- Customer trust: Secure verification builds customer trust and loyalty and assures data safety. In an age when customers are increasingly uncertain about the security of their personal information online, a solid IDV process will put their minds at ease.
- Operational efficiency: Automation speeds up verification and cuts costs. This might be old news. But there is no denying that more efficient IDV solutions free up resources for other tasks.
- Regulatory compliance: Identity verification software helps you meet industry regulations. In a world of tight regulations, IDV software makes everything to do with compliance easier.
- Competitive advantage: Quick, secure verification sets you apart from competitors using slower or riskier methods. A data breach can be a deadly blow to an organization’s reputation. Let it happen to your competitors, not you.
Challenges in implementing identity verification solutions
Implementing an identity verification solution is a delicate balance that requires thoughtful planning. One common misstep businesses make is overlooking the user experience in favor of stringent security measures. While securing user data is crucial, an overly complicated process can deter your customers and cause a dip in engagement.
Businesses often err by choosing solutions that aren’t scalable or adaptable. As your business grows, your identity verification software should be able to keep up, allowing you to avoid the hassle and costs of frequent system overhauls.
Types of identity verification solutions
Navigating the maze of identity verification solutions can be overwhelming. To cut through the noise, you’ve got to focus on the core types: knowledge-based, biometric, and document-based. Each comes with its advantages and drawbacks, and the right fit depends on your specific needs.
Document-based identity verification
When you think about security and reliability, ID document verification often takes the cake. It involves scanning official documents like passports, driver’s licenses, or utility bills to confirm identity.
This method is generally considered reliable because it’s tied to government-issued or official documents. Moreover, it plays nice with global laws like KYC and AML, easing the burden of compliance.
However, document-based verification is not without its challenges. They have to go through scanning and uploading, which could be time-consuming, but solutions like BlinkID offer real-time guided feedback to help ease this painpoint
Biometric-based identity verification
Enter the world of futuristic security with biometric-based verification. Whether it’s facial recognition or fingerprint scanning, this method is as personal as it gets. It’s hard to forge a face or fingerprint, making biometric verification a stronghold for security.
Yet, it’s not a bed of roses. Privacy concerns can loom large, especially if data isn’t stored or processed securely. There’s also the matter of initial setup, which can be complex and resource-intensive.
Database-based identity verification
Database-based identity verification pulls information from various databases to authenticate an identity. It’s often speedy and can be done in real time. Plus, you’re not asking users to go out of their way to provide extra information.
But beware, databases can be compromised or have outdated information. If you rely solely on database-based verification, you’re putting a lot of faith in external systems you don’t control.
Online-based identity verification
This emerging category uses a person’s online footprint for verification. These digital traces can be quite telling, from social media activity to eCommerce behavior. It’s user-friendly and streamlined but raises eyebrows regarding data privacy and the potential for identity theft.
Top use cases for identity verification
Identity verification is not just a tech buzzword—it’s an operational cornerstone for businesses across sectors. The surge in digital interactions has made identity verification tools essential for ensuring security and compliance. From banking and healthcare to eCommerce and beyond, let’s dive into some compelling case studies highlighting identity verification’s vital role.
Know your customer (KYC and AML)
In the banking and financial sector, identity verification is not a ‘nice-to-have’; it’s mandated. Regulations like KYC and AML require stringent checks. A recent case study highlights how one bank streamlined its KYC and AML processes while significantly enhancing its user experience.
By integrating BlinkID into their mobile applications, First Abu Dhabi Bank met regulatory standards and made account setup faster and more efficient, effectively solving the manual data entry headache. Now, customers simply scan their identity documents, and the software handles the rest, delivering a win-win for regulatory compliance and customer satisfaction.
Digital credit scoring
The world of fintech has shaken up how we look at financial transactions. Digital credit scoring, for instance, can’t function without robust identity verification software.
Banco Azteca, Mexico’s largest digital bank, revamped its onboarding and credit scoring process with Microblink’s technology. Before, manual entry of identification data left room for errors and took precious time. With the right digital identity verification tech, they got the accuracy and efficiency they needed, all while being GDPR compliant.
Online transactions
eCommerce platforms deal with millions of transactions daily. The key to customer trust is securing each transaction with reliable identity verification to prevent fraud.
A recent case study shows retail giant Jurat Inc. implemented BlinkID to capture, extract, and verify customer IDs for online transactions. The verification process was 5x faster and boasted a data accuracy rate north of 95%, giving the company a major leg up in reducing fraud and enhancing customer satisfaction.
Age verification
Age verification is essential in industries where compliance with age restrictions is not just good practice but a legal necessity. Effective ID verification software ensures users meet the required age criteria quickly and securely.
For example, a prominent case study highlights how Launch Mobility, a mobility-as-a-service provider, uses BlinkID for speedy and reliable driver’s license verification. This process confirms that users hold a valid license and verifies their age, all in a matter of moments. With the help of BlinkID, Launch Mobility has expedited its onboarding while maintaining a high level of trust and security.
Top identity verification software features
When it comes to identity verification, you want software that’s not just effective but also user-friendly, secure, and versatile. Let’s break down some key features to look for.
Guided feedback
Guided feedback during the scanning process can make a world of difference. Imagine your customer is trying to scan their ID, but the lighting is off, or the angle is wrong. Guided feedback helps by providing real-time tips, like “move closer” or “adjust lighting,” ensuring the process is smooth and error-free.
Secure processing
Data security is non-negotiable. Secure processing ensures sensitive data, like Social Security numbers and passport details, are encrypted at the point of capture and during transmission. This protects against unauthorized access and ensures compliance with data protection laws like GDPR or CCPA.
Global document support
We’re living in a global village. Your software should be capable of verifying a wide range of global documents—passports, driver’s licenses, ID cards, and more—regardless of the country of origin. This is crucial for businesses operating in multiple markets or looking to scale internationally. Microblink provides support for a wide range of documents across different countries.
Digital footprint analysis
These days, your online behavior can say a lot about you. Digital footprint analysis scrutinizes publicly available data to ensure a user’s online behavior matches the identity they claim. This feature adds an extra layer of verification and is particularly useful for mitigating risks associated with online financial transactions.
ID selfie video verification
Document verification alone might not cut it, especially when higher levels of assurance are needed. ID selfie video verification requires the user to take a short video of themselves, which is then analyzed and compared to the photo on their ID. This adds a dynamic layer of security and is increasingly becoming the gold standard for remote identity verification.
Biometric identification
Biometric methods like facial recognition and fingerprint scanning offer high accuracy. While incredibly efficient, these methods do raise some privacy concerns. Always ensure biometric data is stored and processed in a manner that complies with privacy laws and is secure from potential breaches.
Factors to consider when selecting an identity verification solution
Selecting the right identity verification solution is crucial for fraud prevention and operational efficiency. Here’s what you should keep an eye on.
Security and fraud prevention
The core objective of any identity verification solution is to secure online transactions and prevent fraud. Look for features like multi-factor authentication, encrypted data transmission, and digital footprint analysis. These measures not only verify identities but also detect fraud effectively. For example, real-time data enrichment can flag inconsistencies between the ID and the user’s behavior, providing an additional layer of security.
Compliance and regulations
Ignoring regulatory compliance is risky business. Non-compliance with laws like GDPR, CCPA, or AML can result in severe penalties.
Your chosen solution should help you meet these requirements, automating processes like data retention policies and offering built-in compliance checks. The ultimate goal is to save time, minimize risk, and ensure your business verification processes are up to standard so you avoid getting into a sticky legal situation.
Technology stack consideration
Compatibility with your existing technology stack is essential for seamless integration and long-term success. Look for solutions that offer APIs or SDKs that fit well with your current systems. Keeping the tech stack in mind will save you from a lot of headaches when it comes time to scale as your business grows.
Real-time processing
Nobody wants to wait around for verification. Your customers don’t have unlimited patience—and you can’t blame them.
Speed is of the essence. Real-time processing means online transactions are verified instantaneously, which is crucial for enhancing user experience and minimizing drop-off rates.
Compatibility and interoperability
Your identity verification solution should play well with others. Look for systems that integrate smoothly with different parts of your existing tech stack—CRM, data analytics tools, or payment gateways. You want to be able to verify users across multiple platforms and transaction types.
Dynamic development and a good support system
Technology evolves, and your needs will change. A good solution not only meets your current requirements but also offers room for dynamic development.
Good customer support and regular updates are key for this. And don’t underestimate the impact of a seamless user experience on customer satisfaction and retention. Accessibility for all users should be a priority.
Cost and ROI
Last but not least, let’s talk about money. While it’s tempting to go for the cheapest option, consider the total cost of ownership—not just the upfront costs but also ongoing maintenance, updates, and the cost of potential security breaches. Assess the ROI by examining how the solution improves operational efficiency, reduces fraud, and aids in regulatory compliance.
Another important factor is the overall cost of maintaining the software in-house. This includes the cost of engineering hours, improving functionality, external changes (such as OS updates), and vulnerabilities that need to be addressed.
What are the top identity verification software solutions?
A reliable identity verification software is indispensable when it comes to safeguarding online transactions, combating fraud, and complying with regulatory standards. But, you still need to consider factors like real-world production data capabilities, financial institution expertise, intelligence tools, and API integration capabilities.
Here are some of the best identity verification software solutions, each bringing a unique set of capabilities to the table.
Microblink
Microblink stands out for its real-world production data capabilities, particularly in financial institutions. With simple and extensive API integration, it’s designed to fit right into your existing systems.
Solutions like BlinkID aim to help you save time and money while enhancing user experience and security. Unlike some solutions, Microblink is designed for quick and simple setup, providing an overall smooth experience from integration to daily operation.
Jumio
Jumio is another comprehensive platform offering identity verification and fraud prevention. The platform scales well across different types of businesses.
However, integration may require development assistance, and their biometric checks have been reportedly buggy at times. Security is top-notch, compliant with various international standards, and 24-hour support is available. Their clientele also includes big names like WeWork and Monzo.
SEON
SEON offers comprehensive anti-fraud and identity verification solutions with monthly plans. Although the setup process can be long and complex, it offers decent fraud detection once integrated. SEON complies with data protection standards and provides 24-hour support during and post-integration.
Onfido
Onfido uses AI to facilitate smooth customer authentication globally. Offering a free trial, the platform is scalable and usually easy to integrate. However, some users have reported occasional bugs. Like others, Onfido complies with data protection standards and offers solid customer support, although some reviews have noted long wait times.
The importance of staying updated on identity verification solutions
In an era defined by digital transformation, a robust and secure identity verification solution isn’t just a ‘nice-to-have’—it’s a must-have. We’ve covered how such a solution ensures security and customer engagement, with real organizations seeing real results.
The variables—ranging from the type of technology used to regulatory compliance—play an influential role in determining the effectiveness of your identity verification process.
Besides just ticking a compliance box, staying updated with your company’s identity verification practices fortifies your brand’s reputation and ensures a smoother experience for your customers.
How Microblink can help
Deciding on an identity verification solution can seem daunting, but it doesn’t have to be. With the right information and experts, you can make an informed decision that best suits your company’s specific needs. That’s where Microblink steps in.
Our solutions offer a clean user experience with maximum security—capturing, extracting, and verifying digital identities in a snap. We cover all the bases, from saving time and reducing costs to enhancing customer engagement. And we’re not just a provider—we’re a partner that understands your challenges and helps you solve them.
So, if you’re at a crossroads, don’t hesitate to seek expert advice. After all, the right decision today can set the stage for long-term success, enhanced customer loyalty, and superior security.
At Microblink, we’re built by people and used by humans, and we’re here to help you navigate the complexities of identity verification in the digital age. Contact us today to get started.
